Punjab & Haryana HC: Specific Performance Denied for Lack of Readiness and Willingness, Forfeiture of Earnest Money Upheld

Case Name: Jatinder Mohan v. Amar Chand & Ors.
Date of Judgment: January 14, 2020
Citation: RSA Nos. 3082 & 3608 of 2013
Bench: Hon’ble Mr. Justice Sudip Ahluwalia

Held: The High Court dismissed the Regular Second Appeals and upheld the first appellate court’s judgment rejecting the plaintiff’s claim for specific performance, damages, or refund of earnest money. It held that under Section 16(c) of the Specific Relief Act, 1963, the plaintiff must plead and prove readiness and willingness to perform his part of the contract, including appearing before the Sub-Registrar on the stipulated date with the balance consideration. The plaintiff’s pleadings contained only vague assertions, with no proof that he was present with funds. On the contrary, the defendants had specifically averred and proved their presence before the Sub-Registrar on the scheduled date. The Court held that possession follows title, and mere recital in the agreement that possession was delivered could not establish actual possession without supporting revenue records. Consequently, the plaintiff was not entitled to specific performance, declaration, or refund of earnest money, which stood forfeited under the express terms of the agreement .

Summary: The plaintiff sought declaration of possession and specific performance of an agreement to sell dated 12.11.2001 for 2/3rd share of land at Rs. 40 lakhs per killa, paying Rs. 10 lakhs as earnest money. He alleged possession had been delivered, but the defendants refused to execute the sale deed. Alternatively, he sought refund of double the earnest money and damages. The trial court partly decreed the suit by granting refund of double earnest money with interest, but the first appellate court reversed, dismissing the suit in toto. On second appeal, the plaintiff argued that once the agreement was proved, decree of specific performance should follow, and that forfeiture amounted to unjust enrichment. He also relied on precedents regarding delay and denial of agreements. The High Court rejected these arguments, holding that the plaintiff neither averred nor proved readiness and willingness, nor attended the Sub-Registrar’s office with balance funds. It emphasized that equity cannot override statutory requirements, and that contractual clauses allowing forfeiture were enforceable when the buyer defaulted. Delay of over two years in filing the suit further undermined his claim. Thus, the findings of the first appellate court were upheld .

Decision: The High Court dismissed both appeals, affirming the defendants’ right to forfeit the earnest money and rejecting the plaintiff’s claims for specific performance, damages, or refund .