Supreme Court Refuses Specific Performance for Lack of Continuous Readiness and Willingness
The Supreme Court, in Mohammed Khaleel (D) Through Lrs & Ors. Vs Jayamma, declined to grant the equitable remedy of specific performance of an agreement to sell, despite the suit having been filed within the statutory limitation period. The Court affirmed the High Court’s decision to dismiss the suit and laid down important principles on the requirement of continuous readiness and willingness under Section 16(c) of the Specific Relief Act, 1963, as well as the impact of delay in approaching the Court.
Background and Contractual Arrangement
Agreement to Sell and Initial Terms
The original plaintiff, Mohammed Khaleel, entered into an agreement to sell with the respondent on 20.12.1990 for a vacant plot measuring 100 feet by 78 feet, at an agreed sale consideration of Rs. 3,00,000/-.
- The assessee (purchaser) paid Rs. 25,000/- as earnest money.
- The balance amount of Rs. 2,75,000/- was agreed to be paid at the time of registration before the Sub-Registrar.
- The sale deed was to be executed within four months from the date of the agreement.
Under this agreement, the vendor handed over various original title documents to the assessee, including:
- Original will deed and settlement deed
- Katha extract and endorsement on change of katha
- Tax paid receipts
- Encumbrance certificate dated 06.08.1989
- Application to the Revenue Officer dated 03.05.1982
- Photocopy of sale deed dated 07.06.1961
- Layout plan showing division of property into eight shares
The assessee also claimed that possession of the property was delivered to him on the date of agreement.
Dispute Regarding Approach Road and ULCRA Permission
The assessee’s case was that the respondent had agreed that her siblings would execute an interim agreement to facilitate formation of an approach road from T. Narasipura Main Road up to the suit property.
- The assessee alleged that road formation and proper measurement of the property were conditions necessary for completion of the sale.
- The respondent, in her written statement, denied the need for any new approach road, asserting that an existing approach road was already available and that there was no adjacent vacant land from which any new road could be carved out.
Additionally, permission under the Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA) was required for completing the transfer. Both sides later traded allegations that the other had failed to take necessary steps to secure such permission.
Correspondence Between the Parties
Initial Notice by the Assessee
On 15.04.1991, the assessee issued a notice calling upon the respondent to complete the sale. That notice, however, was not served due to an incorrect house number. It was alleged that in this notice the assessee himself acknowledged that:
- The property had not been measured, and
- The approach road had not been formed,
and therefore contended that he could not be compelled to complete the purchase.
Vendor’s Notice Rescinding the Agreement
In response, the respondent issued a legal notice dated 26.04.1991, asserting that:
- The original property documents remained in the assessee’s custody;
- The assessee failed to obtain the necessary permission under ULCRA;
- The contractual period for completion of sale had lapsed; and
- Consequently, she rescinded the agreement and forfeited the earnest money.
Assessee’s Reply and Subsequent Notice
By reply notice dated 30.04.1991, the assessee:
- Admitted receipt of the original documents under the agreement,
- Alleged that no approach road had been formed and no ULCRA permission obtained, and
- Indicated his intention to sue for specific performance.
Later, on 30.07.1992, the assessee sent yet another notice claiming that:
- The respondent had forcibly recovered possession of the suit property, and
- He remained ready and willing to perform his obligations provided ULCRA permission was obtained.
In her reply dated 11.08.1992, the respondent clarified that she did not own the neighbouring land where the assessee sought a road to be formed, and contended that by imposing fresh conditions (i.e., insisting on a new road before execution of the sale deed), the assessee had shown unwillingness to honour the contract.