U.N. KRISHNAMURTHY (SINCE DECEASED) THR. LRS. VERSUS A. M. KRISHNAMURTHY

U.N. KRISHNAMURTHY (SINCE DECEASED) THR. LRS. VERSUS A. M. KRISHNAMURTHY


Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले


1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4703 OF 2022
[ARISING OUT OF SLP (C) NO. 19463 OF 2018]
U.N. KRISHNAMURTHY (SINCE DECEASED) THR. LRS. …...Appellant (s)
VERSUS
A. M. KRISHNAMURTHY ...…Respondent (s)
J U D G M E N T
Indira Banerjee, J.
Leave granted.
2. Heard Mr. Krishnan Venugopal learned Senior Advocate appearing
with Mr. Mahesh Thakur, AOR on behalf of Appellants and Mr. N.D.B
Raju, learned Advocate appearing with Mr. M.A. Chinnasamy, AOR on
behalf of Respondent.
3. This Appeal is against a final judgment and decree dated 30th
October 2017 passed by the High Court of Judicature at Madras,
dismissing the Appeal Suit No. 262 of 2011 filed by the Appellants and
confirming a judgment and order and decree dated 30th November
2
2010 passed by the Principal District Judge, Krishnagiri, hereinafter
referred to as “the Trial Court” in Original Suit No. 30 of 2005 filed by
the Respondent Plaintiff, for specific performance of an agreement for
sale of the suit property.
4. In the plaint, it is pleaded that the original Defendant U.N.
Krishnamurthy’s father, U.R. Narasaiah had executed a will on or about
9
th May 1984, bequeathing the suit property to the original Defendant,
U.N. Krishnamurthy (since deceased). After the death of his father,
U.R. Narasaiah, on 25th April 1987, the original Defendant U. N.
Krishnamurthy became the absolute owner of the suit property.
5. It is the case of the Appellants that on 11th November 2002, while
the original Defendant was getting the suit property whitewashed, a
real estate agent Mr. N. Anjappa approached the original Defendant
with an offer to arrange the sale of the suit property at a good price.
6. As per the pleadings in the plaint, the original Defendant agreed
to sell the suit property to the Respondent Plaintiff, in the presence of
Mr. N. Anjappa, Mr. S.A. Muralidharan and Mr. M. Murali Reddy. The
terms and conditions of the agreement for sale of the suit property
were recorded by the original Defendant U.N. Krishnamurthy in his own
handwriting in a letter dated 11th November 2002 given by the original
Defendant to the Respondent Plaintiff.
7. It is the case of the Respondent Plaintiff that the original
3
Defendant agreed to sell the suit property to the Respondent Plaintiff
for a consideration of Rs.15,10,000/-, out of which sum of Rs.10,001/-
was paid by the Respondent Plaintiff to the original Defendant in
advance. It was further agreed between the parties, that the
Respondent Plaintiff would get the sale deed registered on or before
15th March 2003, upon payment of the full sale consideration. The
agreement was allegedly witnessed by the real estate agent, Mr. N.
Anjappa.
8. According to the Respondent Plaintiff, the Respondent Plaintiff
approached the original Defendant with the balance consideration
several times and requested the original Defendant to execute the sale
deed in his favour, but the original Defendant kept postponing
execution of the sale deed on one pretext or the other.
9. On or about 13th February 2003, the Respondent Plaintiff issued a
legal notice to the original Defendant through his lawyer stating that
the Respondent Plaintiff is ever ready and willing to perform his part of
the contract and called upon the original Defendant to execute the sale
deed in favour of Respondent Plaintiff after receiving the balance
consideration. By a letter dated 10th March 2003 sent in response to
the aforesaid legal notice, the original Defendant denied having
entered into any oral sale agreement for sale of the suit property.
10. On 8th October 2005, the Respondent Plaintiff allegedly
approached the original Defendant with a request to receive the
4
balance consideration and to execute the sale deed in favour of the
Respondent Plaintiff. It is alleged that the original Defendant went
back upon his promise and refused to accede to the request made by
the Respondent Plaintiff.
11. In the circumstances, on or about 17th October 2005, the
Respondent Plaintiff filed the suit. The original Defendant filed a written
statement denying the allegations in the plaint. In the written
statement, the original Defendant denied the execution of any
agreement for sale of the suit property for consideration of
Rs.15,10,000/- as alleged.
12. The original Defendant has categorically stated that he did not
agree to sell the suit property to the Respondent Plaintiff as alleged
and that he did not receive any advance on 11th November 2002 as
alleged or on any other date. It is the case of the Appellants that there
was no concluded contract to sell the suit property. In the written
statement it is also pleaded that in any case, the Respondent Plaintiff
was never ready or willing to perform his part of the contract.
13. The Trial Court framed the following issues:-
“1. Whether the oral agreement of sale in the 1
st
 week of
November, 2002 is true?
2. Whether the alleged confirmation letter dated
11.11.2002 is true and valid?
3. Whether there is no concluded contract between the
5
plaintiff and defendant is true?
4. Whether the plaintiff always ready and willing to
perform his part of contract?
5. Whether the plaintiff is entitled to get the relief of
specific performance and possession?
6. To what relief the plaintiff is entitled to?”
14. The Respondent Plaintiff examined three witnesses and the
original Defendant deposed as witness on his own behalf. By a
judgment and order dated 30th November 2010, the Trial Court
decreed the suit and directed the original Defendant to receive the
balance sale consideration of Rs.15 lakhs and execute the sale deed in
favour of the Respondent Plaintiff.
15. All the issues framed by the Trial Court were answered in favour
of the Respondent Plaintiff. The Trial Court found that the Respondent
Plaintiff was ready and willing to perform his part of the contract, and
thus entitled to the relief of specific performance. The relevant part of
judgment of the Trial Court is set out hereinbelow:-
“21. But I already discussed that the plaintiff is a businessman
and he is having sufficient means to pay the amount to the
defendant Rs.15,00,000/- also deposited into court. The amount
has not shown in Ex. A4 to A6 is not the ground for denying the
prayer. The plaintiff is also ready and willing to perform his
contract and in view of the above discussions, the plaintiff is
entitled the relief of Specific performance and possession of
schedule property. Accordingly, I answered the Issues Nos.4 and
5.”
16. By the impugned judgment and order dated 30th October 2017,
the High Court upheld the judgment and decree passed by the Trial
6
Court, holding that the Respondent Plaintiff had always been ready and
wiling to perform his part of the contract. The relevant part of the
impugned judgment and order reads:-
“18. The letter dated 11.11.2002 has been marked as Ex. A-1. In
Ex. A1 period has been fixed for execution of a registered sale
deed. The consistent case of the plaintiff is that despite of
repeated demands, the defendant has not come forward to
execute a sale deed in favour of the plaintiff and therefore, a
legal notice has been issued. Ex.A2 is a copy of the legal notice
dated 13.02.2003 and the same has also been received by the
defendant. After receipt of the same he has given a false reply
notice dated 10.03.2003. Since on the side of the plaintiff,
necessary documentary and oral evidence have been let in, it is
easily discernible that the plaintiff has always been ready and
willing to perform his part of the contract. Therefore, the fourth
contention put forth on the side of the appellants/defendant[s]
also goes out without merit.
...
20. It has already been discussed in detail that the suit property
is the absolute property of the defendant. From the evidence
given by the defendant [D.W.1], the Court can very well come to
conclusion that the entire transaction is based upon on oral sale
agreement emerged between the plaintiff and defendant.
Further, the plaintiff has shown his readiness and willingness to
perform his part of the contract. Therefore, viewing from any
angle, the contentions put forth on the side of the appellants
/defendants[s] cannot be accepted.”
17. Mr. Krishnan Venugopal, learned Senior Counsel appearing on
behalf of the Appellants argued that both the Trial Court and the High
Court committed an error on facts and also in law. According to him
the issue relating to “readiness and willingness” on the part of the
Respondent Plaintiff, had not been properly appreciated by the Courts
below. Emphasizing on Section 16(c) of the Specific Relief Act, 1963,
Mr. Venugopal submitted that the Respondent Plaintiff had not adduced
any evidence to demonstrate continuous “readiness and willingness”
7
which the Respondent Plaintiff was required to prove, regardless of any
default by the original Defendant. Mr. Venugopal also argued that the
Court should also take judicial notice of the steep rise in the price of
real estate, before granting the discretionary relief of specific
performance.
18. Mr. N.D.B. Raju appearing on behalf of the Respondent Plaintiff
submitted that the issues framed by the Trial Court of whether there
was a concluded contract between the Plaintiff and the Defendant, and
whether the Plaintiff was always ready and willing to perform his part of
the contract were factual issues determinable on evidence.
19. Mr. Raju argued that this Court should not disturb the concurrent
factual findings of the Trial Court and the High Court of readiness and
willingness of the Respondent Plaintiff to perform his part of the
contract.
20. Mr. Raju has emphatically argued that the Respondent Plaintiff
was ever ready and willing to perform his part of the contract and that
the original Defendant had been delaying the execution of the sale
deed. To prove readiness and willingness of the Respondent Plaintiff,
Mr. Raju referred to the testimony of the Plaintiff’s witnesses, N.
Anjappa (PW 2) and S.A. Muralidharan (PW3) who have stated that the
Respondent Plaintiff had on multiple occasions, before the cut-off date
of 15.03.2003 approached the original Defendant for execution of the
sale deed, but the original Defendant delayed the execution of the sale
deed.
8
21. It is well settled that, in a suit for Specific Performance of an
agreement, it is for the Plaintiff to prove his readiness and willingness
to perform his obligations under the agreement. Where a certain
amount has been paid in advance and the balance is required to be
paid within a stipulated time, it is for the Plaintiff to show that he was
in a position to pay the balance money. The Plaintiff has to prove that
he has the money or has alternatively made necessary arrangements
to get the money. In this case, the Original Defendant/Appellants have
all along contended that the Plaintiff Respondent neither offered to pay
nor was in a position to pay the balance consideration of
Rs.15,00,000/-.
22. The primary question for determination is whether the
Respondent Plaintiff has proved his readiness and willingness to
perform his part of the contract or not?
23. Section 16 of the Specific Relief Act, 1963, as it stood at the
material time (prior to amendment with effect from 1.10.2018), inter
alia, provides:-
“16. Personal bars to relief.—Specific performance of a contract
cannot be enforced in favour of a person—
(a) who would not be entitled to recover compensation for its
breach; or
(b) who has become incapable of performing, or violates any
essential term of, the contract that on his part remains to be
performed, or acts in fraud of the contract, or wilfully acts at
variance with, or in subversion of, the relation intended to be
established by the contract; or
(c) who fails to aver and prove that he has performed or has
always been ready and willing to perform the essential terms of
the contract which are to be performed by him, other than terms
9
the performance of which has been prevented or waived by the
defendant.
 Explanation. —For the purposes of clause (c), —
(i) where a contract involves the payment of money, it is not
essential for the plaintiff to actually tender to the defendant or to
deposit in court any money except when so directed by the court;
(ii) the plaintiff must aver performance of, or readiness and
willingness to perform, the contract according to its true construction.”
24. Section 16 (c) of the Specific Relief Act, 1963 bars the relief of
specific performance of a contract in favour of a person, who fails to
aver and prove his readiness and willingness to perform his part of
contract. In view of Explanation (i) to clause (c) of Section 16, it may
not be essential for the plaintiff to actually tender money to the
defendant or to deposit money in Court, except when so directed by
the Court, to prove readiness and willingness to perform the essential
terms of a contract, which involves payment of money. However,
explanation (ii) says the plaintiff must aver performance or readiness
and willingness to perform the contract according to its true
construction.
25. To aver and prove readiness and willingness to perform an
obligation to pay money, in terms of a contract, the plaintiff would
have to make specific statements in the plaint and adduce evidence
to show availability of funds to make payment in terms of the
contract in time. In other words, the plaintiff would have to plead
that the plaintiff had sufficient funds or was in a position to raise
funds in time to discharge his obligation under the contract. If the
plaintiff does not have sufficient funds with him to discharge his
obligations in terms of a contract, which requires payment of money,
10
the plaintiff would have to specifically plead how the funds would be
available to him. To cite an example, the plaintiff may aver and
prove, by adducing evidence, an arrangement with a financier for
disbursement of adequate funds for timely compliance with the terms
and conditions of a contract involving payment of money.
26. In Man Kaur v. Hartar Singh Sangha
1
, this Court held that:
“40. …..A person who fails to aver and prove that he has
performed or has always been ready and willing to perform the
essential terms of the contract which are to be performed by him
(other than the terms the performance of which has been
prevented or waived by the defendant) is barred from claiming
specific performance. Therefore, even assuming that the
defendant had committed breach, if the plaintiff fails to aver in
the plaint or prove that he was always ready and willing to
perform the essential terms of contract which are required to be
performed by him (other than the terms the performance of
which has been prevented or waived by the plaintiff), there is a
bar to specific performance in his favour. Therefore, the
assumption of the respondent that readiness and willingness on
the part of the plaintiff is something which need not be proved, if
the plaintiff is able to establish that the defendant refused to
execute the sale deed and thereby committed breach, is not
correct. Let us give an example. Take a case where there is a
contract for sale for a consideration of Rs. 10 lakhs and earnest
money of Rs. 1 lakh was paid and the vendor wrongly refuses to
execute the sale deed unless the purchaser is ready to pay Rs.
15 lakhs. In such a case there is a clear breach by the defendant.
But in that case, if the plaintiff did not have the balance Rs. 9
lakhs (and the money required for stamp duty and registration)
or the capacity to arrange and pay such money, when the
contract had to be performed, the plaintiff will not be entitled to
specific performance, even if he proves breach by the defendant,
as he was not “ready and willing” to perform his obligations.”
27. In Pt. Prem Raj v. D.L.F. Housing and Construction
(Private) Ltd. And Anr.
2
 cited by Mr. Venugopal, this Court speaking
1 (2010) 10 SCC 512
2 AIR 1968 SC 1355
11
through Ramaswamy J. held that “it is well-settled that in a suit for
specific performance the plaintiff should allege that he is ready and
willing to perform his part of the contract…..” and if the fact is
traversed, he is required to prove a continuous readiness and
willingness from the date of the contract to the time of the hearing, to
perform the contract on his part. For such conclusion the learned Judge
relied upon the opinion of Lord Blanesburgh, in Ardeshir Mama v.
Flora Sassoon
3
.
28. In D.L.F. Housing and Construction (Pvt.) Ltd. (supra), in the
absence of an averment on the part of the Plaintiff in the plaint, that he
was ready and willing to perform his part of the contract, it was held
that the Plaintiff had no cause of action so far as the relief for Specific
Performance was concerned. In this case, of course, there is an
averment in the plaint that the Respondent Plaintiff was all along ready
and willing to perform his obligations under the contract. The question
is whether the Respondent Plaintiff had proved his readiness and
willingness to perform his obligations under the contract.
29. In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and Ors.
4
,
this Court reiterated that Section 16(c) of the Specific Relief Act, 1963
envisages that the Plaintiff must plead and prove that he had
performed or has always been ready and willing to perform the
essential terms of the contract which were to be performed by him
3 55 IA 300, at pg. 372:AIR 1928 PC 208
4 (1995) 5 SCC 115
12
other than those terms, the performance of which has been prevented
or waived by the Defendant. In N.P. Thirugnanam (supra) this Court
said that the continuous readiness and willingness on the part of the
Plaintiff was a condition precedent for grant of the relief of Specific
Performance.
30. This Court, in effect, held that for determining whether the
Plaintiff was ready and willing to perform his part of the agreement it is
necessary for the Court to consider the conduct of the Plaintiff prior
and subsequent to filing the suit for specific performance. The relevant
part of the judgment is extracted hereinbelow:–
“5. …Section 16(c) of the Act envisages that plaintiff must plead
and prove that he had performed or has always been ready and
willing to perform the essential terms of the contract which are
to be performed by him, other than those terms the performance
of which has been prevented or waived by the defendant. The
continuous readiness and willingness on the part of the plaintiff
is a condition precedent to grant the relief of specific
performance. This circumstance is material and relevant and is
required to be considered by the court while granting or refusing
to grant the relief…”
31. In Umabai v. Nilkanth Dhondiba Chavan
5
, this Court held that
a finding as to whether the Plaintiffs were all along and still ready and
willing to perform their part of the contract, was a mandatory
requirement under Section 16(c) of the Specific Relief Act. The Court
would necessarily have to arrive at the finding that the Plaintiff all
along were, and still are ready and also willing to perform their part of
5 (2005) 6 SCC 243
13
the contract, taking into account the entirety of the pleadings as also
the evidence brought on record. To quote this Court:-
“So far there being a plea that they were ready and willing to
perform their part of the contract is there in the pleading, we
have no hesitation to conclude, that this by itself is not sufficient
to hold that the appellants were ready and willing in terms of
Section 16(c) of the Specific Relief Act. This requires not only
such plea but also proof of the same. Now examining the first of
the two circumstances, how could mere filing of this suit, after
exemption was granted be a circumstance about willingness or
readiness of the plaintiff. This at the most could be the desire of
the plaintiff to have this property. It may be for such a desire this
suit was filed raising such a plea. But Section 16(c) of the said
Act makes it clear that mere plea is not sufficient, it has to be
proved.”
32. In K.S. Vidyanadam v. Vairavan
6
, Justice B.P. Jeevan Reddy
said that grant of the relief of specific performance is discretionary and
the Court is not bound to grant it. This Court further held that though
time is not of essence to a contract relating to transfer of property,
such contracts need to be completed within a reasonable time period.
Thus the time element cannot be completely ignored.
33. In a suit for Specific Performance of a contract, the Court is
required to pose unto itself the following questions, namely:-
(i) Whether there is a valid agreement of sale binding on both
the vendor and the vendee and
(ii) Whether the Plaintiff has all along been and still is ready and
willing to perform his part of the contract as envisaged under
Section 16(c) of the Specific Relief Act, 1963.
6 (1997) 3 SCC 1
14
34. There is a distinction between readiness and willingness to
perform the contract and both ingredients are necessary for the relief
of Specific Performance. In His Holiness Acharya Swami Ganesh
Dassji v. Sita Ram Thapar
7 cited by Mr. Venugopal, this Court said
that there was a difference between readiness and willingness to
perform a contract. While readiness means the capacity of the Plaintiff
to perform the contract which would include his financial position,
willingness relates to the conduct of the Plaintiff. The same view was
taken by this Court in Kalawati v. Rakesh Kumar
8
.
35. Even in a first appeal, the first Appellate Court is duty bound to
examine whether there was continuous readiness and willingness on
the part of the Plaintiff to perform the contract. This proposition finds
support from Balraj Taneja v. Sunil Madan
9
, and H.P. Pyarejan v.
Dasappa
10
 where this Court approved the views taken by the Privy
Council in Ardeshir Mama v. Flora Sassoon
11
.
36. In Malluru Mallappa v. Kuruvathappa
12
, this Court observed
and held:-
“13. It is a settled position of law that an appeal is a continuation
of the proceedings of the original court. Ordinarily, the appellate
jurisdiction involves a rehearing on law as well as on fact and is
invoked by an aggrieved person. The first appeal is a valuable
7 (1996) 4 SCC 526
8 (2018) 3 SCC 658
9 (1999) 8 SCC 396
10 (2006) 2 SCC 496
11 AIR 1928 PC 208
12 (2020) 4 SCC 313
15
right of the appellant and therein all questions of fact and law
decided by the trial court are open for reconsideration. Therefore,
the first appellate court is required to address itself to all the
issues and decide the case by giving reasons. The court of first
appeal must record its findings only after dealing with all issues
of law as well as fact and with the evidence, oral as well as
documentary, led by the parties. The judgment of the first
appellate court must display conscious application of mind and
record findings supported by reasons on all issues and
contentions [see : Santosh Hazariv. Purushottam Tiwari [Santosh
Hazari v. Purushottam Tiwari, (2001) 3 SCC
179] , Madhukar v. Sangram [Madhukar v. Sangram, (2001) 4 SCC
756] , B.M. Narayana Gowda v. Shanthamma [B.M. Narayana
Gowda v. Shanthamma, (2011) 15 SCC 476 : (2014) 2 SCC (Civ)
619] , H.K.N. Swami v. Irshad Basith [H.K.N. Swami v. Irshad
Basith, (2005) 10 SCC 243] and Sri Raja Lakshmi Dyeing
Works v. Rangaswamy Chettiar [Sri Raja Lakshmi Dyeing Works v.
Rangaswamy, (1980) 4 SCC 259]]
14. A first appeal under Section 96 CPC is entirely different from
a second appeal under Section 100. Section 100 expressly bars
second appeal unless a question of law is involved in a case and
the question of law so involved is substantial in nature.
***
18. It is clear from the above provisions and the decisions of this
Court that the judgment of the first appellate court has to set out
points for determination, record the decision thereon and give its
own reasons. Even when the first appellate court affirms the
judgment of the trial court, it is required to comply with the
requirement of Order 41 Rule 31 and non-observance of this
requirement leads to infirmity in the judgment of the first
appellate court. No doubt, when the appellate court agrees with
the views of the trial court on evidence, it need not restate effect
of evidence or reiterate reasons given by the trial court.
Expression of a general agreement with the reasons given by the
trial court would ordinarily suffice.
37. In H.P. Pyarejan v. Dasappa (supra), Justice Arijit Pasayat
speaking for this Court reversed the judgment of the High Court
holding that High Court did not provide reasoning for its conclusion that
Plaintiff was ready and willing to perform his part of contract. To arrive
at such conclusion the Court had relied upon Cort v. Ambergate etc.
and Rly. Co
13
 where Lord Campbell observed that in common sense,
13 (1851) 117 ER 1229
16
the meaning of such an averment of readiness and willingness must be
that the non-completion of contract was not the fault of the Plaintiff.
38. In this case, we cannot overlook the fact that the suit property is
located in the industrial town of Hosur located about 30/40 kms. from
Bengaluru. The Court is obliged to take judicial notice of the
phenomenal rise in the price of real estate in Hosur. The proposition
finds support from case reported in K.S. Vidyanadam v. Vairavan
(supra). To quote this Court “we cannot be oblivious to reality – and
the reality is constant and continuous rise in the values of urban
properties -fuelled by large scale migration of people from rural areas
to urban centres and by inflation.”
39. Mr. Venugopal argued that the Plaintiff had only paid an
insignificant amount of Rs.10,001/- as advance when the consideration
was Rs.15,10,000/-. Having paid an insignificant amount the Plaintiff
was not entitled to discretionary equitable relief of Specific
Performance, as observed by this Court in Saradamani Kandappan
v. S. Rajalakshmi
14
. The relevant paragraph of the judgment of this
Court is set out hereinbelow:-
“37. The reality arising from this economic change cannot
continue to be ignored in deciding cases relating to specific
performance. The steep increase in prices is a circumstance
which makes it inequitable to grant the relief of specific
performance where the purchaser does not take steps to
complete the sale within the agreed period, and the vendor has
not been responsible for any delay or non-performance. A
purchaser can no longer take shelter under the principle that
time is not of essence in performance of contracts relating to
immovable property, to cover his delays, laches, breaches and
14 (2011) 12 SCC 18
17
“non-readiness”. The precedents from an era, when high inflation
was unknown, holding that time is not of the essence of the
contract in regard to immovable properties, may no longer
apply, not because the principle laid down therein is unsound or
erroneous, but the circumstances that existed when the said
principle was evolved, no longer exist. In these days of galloping
increases in prices of immovable properties, to hold that a
vendor who took an earnest money of say about 10% of the sale
price and agreed for three months or four months as the period
for performance, did not intend that time should be the essence,
will be a cruel joke on him, and will result in injustice. Adding to
the misery is the delay in disposal of cases relating to specific
performance, as suits and appeals therefrom routinely take two
to three decades to attain finality. As a result, an owner agreeing
to sell a property for rupees one lakh and receiving rupees ten
thousand as advance may be required to execute a sale deed a
quarter century later by receiving the remaining rupees ninety
thousand, when the property value has risen to a crore of
rupees.”
40. As argued by Mr. Venugopal, the fact that the suit had been filed
after three years, just before expiry of the period of limitation, was also
a ground to decline the Respondent Plaintiff the equitable relief of
Specific Performance for purchase of immovable property. Mr.
Venugopal’s argument finds support from the judgments of this Court
in P.R. Deb and Associates v. Sunanda Roy
15
; K.S. Vidyanadam
v. Vairavan
16
; Manjunath Anandappa v. Tammanasa
17
, Azhar
Sultana v. B. Rajamani
18
; Saradamani Kandappan v. S.
Rajalakshmi
19
.
41. In K.S. Vidyanadam v. Vairavan (supra) this Court held:
15 (1996) 4 SCC 423
16 (1997) 3 SCC 1
17 (2003) 10 SCC 390
18 (2009) 17 SCC 27
19 (2011) 12 SCC 18
18
“10. It has been consistently held by the courts in India,
following certain early English decisions, that in the case of
agreement of sale relating to immovable property, time is not of
the essence of the contract unless specifically provided to that
effect. The period of limitation prescribed by the Limitation Act
for filing a suit is three years. From these two circumstances, it
does not follow that any and every suit for specific performance
of the agreement (which does not provide specifically that time
is of the essence of the contract) should be decreed provided it
is filed within the period of limitation notwithstanding the timelimits stipulated in the agreement for doing one or the other
thing by one or the other party. That would amount to saying
that the time-limits prescribed by the parties in the agreement
have no significance or value and that they mean nothing. Would
it be reasonable to say that because time is not made the
essence of the contract, the time-limit(s) specified in the
agreement have no relevance and can be ignored with impunity?
It would also mean denying the discretion vested in the court by
both Sections 10 and 20. As held by a Constitution Bench of this
Court in Chand Rani v. Kamal Rani [(1993) 1 SCC 519] : (SCC p.
528, para 25)
“… it is clear that in the case of sale of immovable property
there is no presumption as to time being the essence of the
contract. Even if it is not of the essence of the contract, the
Court may infer that it is to be performed in a reasonable time
if the conditions are (evident?): (1) from the express terms of
the contract; (2) from the nature of the property; and (3) from
the surrounding circumstances, for example, the object of
making the contract.”
In other words, the court should look at all the relevant
circumstances including the time-limit(s) specified in the
agreement and determine whether its discretion to grant specific
performance should be exercised...”
42. In Azhar Sultana v. B. Rajamani (supra) this Court held:-
“28. …The court, keeping in view the fact that it exercises a
discretionary jurisdiction, would be entitled to take into
consideration as to whether the suit had been filed within a
reasonable time. What would be a reasonable time would,
however, depend upon the facts and circumstances of each
case. No hard-and-fast law can be laid down therefor. The
conduct of the parties in this behalf would also assume
significance.
***
35. We, therefore, are of the opinion that interest of justice
would be subserved if this Court refuses to exercise its
discretionary jurisdiction in terms of Section 20 of the Act,
19
directing the defendant to pay a sum of Rs. 60,000 to the
plaintiff which sum would include the amount of advance paid by
her.”
43. In Saradamani Kandappan (supra) this Court reiterated that (i)
while exercising discretion in suits for Specific Performance, the Courts
should bear in mind that when the parties prescribed a time for taking
certain steps or for completion of the transaction, that must have some
significance and therefore time/period prescribed cannot be ignored;
(ii) the Courts will apply greater scrutiny and strictness when
considering whether purchaser was ready and willing to perform his
part of the contract and (iii) every suit for Specific Performance need
not be decreed merely because it is filed within the period of limitation,
by ignoring time limits stipulated in the agreement. The courts will
also frown upon suits which are not filed immediately after the
breach/refusal. The fact that limitation is three years does not mean
that a purchaser can wait for one or two years to file a suit and obtain
Specific Performance. The three year period is intended to assist the
purchaser in special cases, as for example where the major part of the
consideration has been paid to the vendor and possession has been
delivered in part performance, where equity shifts in favour of the
purchaser.
44. In Atma Ram v. Charanjit Singh
20
 Justice V. Ramasubramanian
speaking for this Court made the following pertinent observation:-
 “9... No explanation was forthcoming from the petitioner for the
long delay of three years, in filing the suit (on 13.10.1999) after
20 (2020) 3 SCC 311
20
issuing a legal notice on 12.11.1996. The conduct of a plaintiff is
very crucial in a suit for specific performance. A person who
issues a legal notice on 12.11.1996 claiming readiness and
willingness, but who institutes a suit only on 13.10.1999 and that
too only with a prayer for a mandatory injunction carrying a fixed
court fee relatable only to the said relief, will not be entitled to
the discretionary relief of specific performance.”
45. The Respondent Plaintiff has relied upon the notice dated
13.02.2003 and evidences of PW2 & PW3 to prove that he was always
ready and willing to perform his part of the contract. Even though it
may be true that the Respondent Plaintiff had deposited the balance
sale consideration in court on 06.04.2010, it cannot be ignored that
such deposit was made by him seven years after 15.3.2003, being the
date by which the sale had to be concluded. No evidence has been
adduced on behalf of the Respondent Plaintiff as to how the
Respondent Plaintiff was in a position to pay or make arrangements for
payment of the balance sale consideration within time. The Courts
below also erred in not adjudicating upon this vital issue except to
make a sweeping observation that, given that the Respondent Plaintiff
was a businessman he had sources to arrange the balance funds.
Careful study of balance sheet dated 31.03.2003 of the Respondent
Plaintiff would demonstrate that he did not have sufficient funds to
discharge his part of contract.
46. It is settled law that for relief of specific performance, the Plaintiff
has to prove that all along and till the final decision of the suit, he was
ready and willing to perform his part of the contract. It is the bounden
duty of the Plaintiff to prove his readiness and willingness by adducing
21
evidence. This crucial facet has to be determined by considering all
circumstances including availability of funds and mere statement or
averment in plaint of readiness and willingness, would not suffice.
47. In this case, the Respondent Plaintiff has failed to discharge his
duty to prove his readiness as well as willingness to perform his part of
the contract, by adducing cogent evidence. Acceptable evidence has
not been placed on record to prove his readiness and willingness.
Further, it is clear from the Respondent Plaintiff’s balance sheet that he
did not have sufficient funds to discharge his part of contract in March
2003. Making subsequent deposit of balance consideration after lapse
of seven years would not establish the Respondent Plaintiff’s readiness
to discharge his part of contract. Reliance may be placed on Umabai
v. Nilkanth Dhondiba Chavan (supra) where this Court speaking
through Justice SB Sinha held that deposit of amount in court is not
enough to arrive at conclusion that Plaintiff was ready and willing to
perform his part of contract. Deposit in court would not establish
Plaintiff’s readiness and willingness within meaning of section 16(c) of
Specific Relief Act. The relevant part of the judgment is reproduced
below: -
“45. …Deposit of any amount in the court at the appellate
stage by the plaintiffs by itself would not establish their
readiness and willingness to perform their part of the contract
within the meaning of Section 16(c) of the Specific Relief Act…”
48. It is, therefore, patently clear that the Respondent Plaintiff has
failed to prove his readiness to perform his part of contract from the
22
date of execution of the agreement till date of decree, which is a
condition precedent for grant of relief of specific performance. This
Court finds that the Respondent Plaintiff was not entitled to the relief of
specific performance.
49. The Respondent Plaintiff may have been willing to perform his
part of contract. It however appears that he was not ready with funds.
He was possibly trying to buy time to discharge his part of contract.
50. In Bhavyanath v. K.V. Balan
21
 cited by Mr. Raju to contend that
the Respondent Plaintiff was entitled to relief of specific performance
and the courts had rightly granted such relief, the Plaintiff had filed the
suit for specific performance three days after the last day for execution
of the sale deed. In this case however, the Respondent Plaintiff waited
for nearly 3 years and filed the suit for specific performance just before
expiry of the limitation period. Furthermore, in Bhavyanath v. K.V.
Balan (supra) the Plaintiff had adduced cogent evidence to prove his
readiness and willingness to discharge his part of the contract and to
prove that he had sufficient funds to discharge his obligation. No such
evidence has been adduced by the Respondent Plaintiff in this case
either to show his readiness or to prove that sufficient funds were
available with him to enable him to discharge his part of contract.
Therefore, Bhavyanath v. K.V. Balan (supra) is of no assistance to
the Respondent Plaintiff.
21 (2020) 11 SCC 790
23
51. In view of foregoing, this Court is of the considered opinion that
the Respondent Plaintiff was not entitled to the relief of specific
performance. The Trial Court and the High Court erred both in law and
on facts in granting such relief.
52. The appeal is accordingly allowed. The impugned judgment of
the High Court and the judgment and decree of Trial court are
accordingly set aside. The Appellants shall return the earnest money
to the Respondent Plaintiff, within 4 weeks from today with interest at
the rate of 7% per annum from the date of deposit of the same, till the
date of refund. It will also be open to the Respondent Plaintiff to
withdraw the deposit if any of the balance consideration in Court.
Parties to bear their own costs.
.................................J
 [INDIRA BANERJEE]
.................................J
 [HRISHIKESH ROY]
JULY 12, 2022;
NEW DELHI.

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