Specific Performance Cannot Be Granted Unless Buyer Proves Funds and Prompt Conduct Throughout: Supreme Court
Case Name: Mohammed Khaleel (D) Through LRs. & Ors. v. Jayamma
Citation: 2026 INSC 651
Date of Judgment/Order: 23 June 2026
Bench: Prashant Kumar Mishra, J. and N.V. Anjaria, J.
Held: The Supreme Court held that a plaintiff seeking specific performance must continuously plead and prove readiness and willingness under Section 16(c) of the Specific Relief Act, 1963, as it stood prior to the 2018 amendment. The Court clarified that “readiness” refers to financial capacity, while “willingness” is reflected from the plaintiff’s conduct and intention to perform the contract. The Court held that financial documents created several years after institution of the suit cannot prove availability of funds at the relevant time, and that filing a suit within limitation does not by itself entitle a plaintiff to specific performance if the plaintiff failed to act promptly, diligently and equitably.
Summary: The dispute arose from an agreement to sell dated 20.12.1990 under which the respondent agreed to sell a vacant site for ₹3,00,000, after receiving ₹25,000 as earnest money, with the sale deed to be registered within four months on payment of the balance ₹2,75,000. The plaintiff claimed possession and asserted that the sale could not be completed because the approach road was not formed and permission under the Urban Land (Ceiling and Regulation) Act, 1976 was not obtained. The respondent rescinded the agreement by notice dated 26.04.1991, alleging that the plaintiff failed to obtain permission, tender the balance consideration and complete the transaction within time. The plaintiff filed the suit for specific performance only on 20.12.1993. The Trial Court decreed the suit, but the Karnataka High Court reversed the decree. Affirming the High Court, the Supreme Court held that the plaintiff failed to prove financial readiness during the relevant period because the fixed deposits relied upon were created only in 1999 and 2001, long after the suit was filed. The Court also found that the plaintiff remained passive regarding ULCRA permission, failed to furnish necessary affidavits or forms, and delayed filing the suit for two years and nine months after categorical refusal.
Decision: The Supreme Court dismissed the appeal and upheld the High Court’s refusal to grant specific performance. The Court held that the appellants failed to satisfy the twin statutory requirements of readiness and willingness and also failed to approach the Court with promptitude, thereby disentitling them from the equitable and discretionary relief of specific performance. The Trial Court’s decree for specific performance remained set aside, and the suit stood dismissed.