Contractual Performance in Property Transactions Explained by Supreme Court

Contractual Performance in Property Transactions Explained by Supreme Court

An interesting judgment of Supreme Court throws light on legal issues concerning contractual performance in real estate transactions.

Case arose out of an agreement to sell the property and purported agreement to execute sale deed in future.

It was held that in order to obtain a decree for specific performance, the plaintiff must aver and prove that he has performed his part of the contract and has always been ready and willing to perform the terms of the contract which are to be performed by him. Section 16(c) of the Specific Relief Act, 1963 mandates ‘readiness and willingness’ of the plaintiff to be averred and proved and it is a condition precedent to obtain the relief of specific performance.

There is a distinction between the terms ‘readiness’ and ‘willingness’. ‘Readiness’ is the capacity of the plaintiff to perform the contract which includes his financial position to pay the sale consideration. ‘Willingness’ is the conduct of the party.

In this case, plaintiff has not produced any evidence either oral or documentary to establish that there was any demand made by him for the land being surveyed by defendant. No witnesses have been examined on behalf of the plaintiff to establish that at any point of time there has been demand made by the plaintiff with the defendant by calling upon him to get the suit land surveyed as agreed under the agreement of sale. As regards ‘willingness’ of the plaintiff to perform his part of the contract, the conduct of the plaintiff warranting the performance has to be looked into. The continuous readiness and willingness is a condition precedent to grant the relief of specific performance.

It is no doubt true that suit for specific performance can be filed even on the last date of the limitation as prescribed under Article 54 of the Limitation Act, 1963. However, the steps taken by the plaintiff during this period namely from the date of agreement till date of filing of suit will have to be explained in the plaint and proved in the evidence which was lacking in the instant case. The long unexplained delay and silence on the part of the plaintiff in this regard while in the witness box would not entitle the plaintiff to a decree of specific performance.

The suit was filed but relief of specific performance was refused by Trial Court and order of refund of money was ordered. Said Judgment was found to be justified. 

For more details refer Pydi Ramana @ Ramulu v. Davarasetty Manmadha Rao [2024] GCtR 3464 (SC).