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by sayum
09 May 2026 2:28 PM
"Even assuming the defendant had committed breach, if the plaintiff fails to prove readiness and willingness, specific performance is barred under Section 16(c) of the Specific Relief Act." – In a notable judgment Andhra Pradesh High Court partially allowed an appeal , stemming from the dismissal of a suit for specific performance. The Division Bench confirmed that the plaintiff had neither established financial readiness nor proven his continuous willingness to perform the contract, thereby falling foul of Section 16(c) of the Specific Relief Act, 1963.
While denying specific performance, the Court invoked equitable principles to direct refund of ₹30 lakhs, paid as advance under the sale agreement dated 12.09.2015, along with interest at 12% per annum from 29.01.2025, the date when the amended relief was sought.
“Readiness Must Be Real, Not Rhetorical” – Plaintiff Failed to Show Funds or Finance for ₹1.75 Crore Balance Payment
The central legal issue before the Court revolved around whether the plaintiff had complied with the twin conditions of readiness and willingness, as mandated by Section 16(c). Despite pleadings to the effect that the plaintiff (along with five others) was ready with the funds, the High Court held:
“The plaintiff has failed to demonstrate his ability to purchase the said property.”
The agreement (Ex.A1) involved a total sale consideration of ₹2.06 crores (₹14 lakhs per acre for 1.475 acres), of which ₹30 lakhs had been paid in advance. The plaintiff failed to establish the capacity to pay the remaining ₹1.76 crores, and worse still, admitted that he was unable to arrange even ₹5 lakhs when allegedly requested by the defendant.
Referring to the Supreme Court’s decision in U.N. Krishnamurthy v. A.M. Krishna Murthy, (2022) 4 SCC 347, the Bench reiterated:
“To aver and prove readiness and willingness... the plaintiff would have to plead that he had sufficient funds or was in a position to raise funds in time to discharge his obligation under the contract.”
Similarly, in Man Kaur v. Hartar Singh Sangha, (2010) 10 SCC 512, it was held:
“Even assuming that the defendant had committed breach, if the plaintiff fails to prove that he was always ready and willing... there is a bar to specific performance in his favour.”
The bank statements of the plaintiff and his five alleged co-purchasers, marked as exhibits, collectively failed to show availability of the requisite funds. There was no evidence of a financing arrangement or credible source for the shortfall.
“Receipt for ₹2 Lakhs Dated 23.06.2016 is Unreliable and Fabricated” – No Waiver of Time Clause
In an attempt to circumvent the explicit time stipulation in the contract, the plaintiff relied on a receipt (Ex.A3) dated 23.06.2016, purportedly signed by the defendant acknowledging receipt of ₹2 lakhs, after the deadline of 11.05.2016.
The plaintiff argued that this post-deadline payment implied waiver of the time clause, which stated that failure to pay the balance would result in automatic cancellation and forfeiture of the advance.
However, the Court found the entire narrative riddled with contradictions and fabrication. Notably:
The Court held:
“These contradictions are sufficient to disbelieve the version of the plaintiff, that money was paid out on 23.06.2016.”
Therefore, there was no waiver of the time being essence clause. The contract stood terminated as per Ex.A1 due to non-payment by the agreed date.
“Alleged Partnership Agreement (Ex.A2) Disbelieved – Fabricated to Boost Plaintiff’s Financial Credentials”
The plaintiff attempted to argue that the purchase was on behalf of six individuals, including himself, and relied on a document dated 11.09.2015 (Ex.A2) to that effect. However, the High Court found Ex.A2 to be fabricated, holding:
“This agreement appears to have been created only for the purposes of obtaining the financial strength of the other five persons, to demonstrate the financial capacity of the plaintiff.”
Among the inconsistencies:
Given these findings, the Court declined to examine whether Ex.A2 created an unregistered partnership, as it disbelieved the existence of the agreement itself.
“Forfeiture of Advance Unjustified When No Loss Is Pleaded” – Refund of ₹30 Lakhs with 12% Interest Ordered
Despite upholding the trial court’s dismissal of specific performance, the Bench allowed the plaintiff’s amended prayer for refund, moved via I.A. No.1 of 2025, citing equitable considerations.
The Court noted:
“Such a clause [forfeiture] can be enforced if the defendant had suffered a loss... There is no such pleading. In fact, the defendant had pleaded that the value of the land had increased tremendously.”
Accordingly, the Court directed:
“Refund of ₹30 lakhs, to the plaintiff, with interest at the rate of 12% per annum from 29.01.2025 till date of realisation.”
The claim of ₹2 lakhs, allegedly paid on 23.06.2016, was disbelieved and excluded from the refund.
The request for 24% interest was rejected, as the Court held that this was not a commercial transaction, and 12% was equitable.
Specific Performance Denied; Refund Granted with Interest
While dismissing the appeal for specific performance due to failure under Section 16(c) of the Specific Relief Act, the Andhra Pradesh High Court granted monetary relief by ordering refund of the advance amount, emphasizing that non-performance without proof of loss cannot lead to unjust enrichment.
“This appeal is disposed of accordingly. There shall be no order as to costs.”
Date of Decision: 17th September 2025
