Mere Presence Before Sub-Registrar Is Not Enough—Readiness Requires Financial Capacity: Punjab & Haryana High Court

“Plaintiff must succeed on the strength of his own case, not on the weakness of the defendant”— In a sharply worded decision with significant implications for litigation under property agreements, the Punjab and Haryana High Court holding that the plaintiff had utterly failed to prove readiness, willingness, or financial capacity to fulfill his part of the agreement.

Justice Deepak Gupta emphasized that under Section 16(c) of the Specific Relief Act, 1963, a plaintiff seeking enforcement—or even damages—under a contract for sale of immovable property must demonstrate continuous readiness and willingness, including financial ability to perform. The Court also held that Panchkula Courts lacked territorial jurisdiction, since the agreement was executed at Amritsar and included a jurisdiction clause in favour of Amritsar courts.

“Where Relief Is Purely Personal, Jurisdiction Lies Where the Defendant Resides or Agreement Is Executed”: High Court Reverses Forum Findings

At the center of the litigation was an Agreement to Sell dated 27.09.2005, under which the plaintiff Gopal Krishan Hooda agreed to purchase Plot No. 529, Sector-21, Panchkula, for ₹1,24,25,000. He paid ₹15,00,000 as earnest money. As per the agreement, the sale deed was to be executed on or before 30.12.2005, subject to the seller Ashwani Kumar Bhagat obtaining No Dues Certificate and NOC from HUDA.

The plaintiff filed a suit for recovery of ₹30,00,000 (double the earnest money) on 20.12.2008, alleging breach by the defendant.

Both the Trial Court and First Appellate Court ruled in favour of the plaintiff, granting recovery (though reduced to ₹15,00,000 with interest in appeal). However, the High Court set aside both judgments, ruling them as legally unsustainable.

Justice Gupta held:

“The suit was for recovery of money, not for specific performance of immovable property. The relief could be obtained through personal obedience, hence Section 20 CPC applied, and jurisdiction vested in Amritsar Courts, as per Clause 10 of the agreement.”

“Financial Readiness Cannot Be Presumed—It Must Be Proven”

One of the central reasons for overturning the concurrent findings was the plaintiff’s failure to prove financial readiness. The Court scrutinized the evidence, and held:

“The plaintiff failed to prove his financial capacity to pay the balance sale consideration of over ₹1.09 crore. His income tax returns revealed paltry incomes of ₹1.17 lakhs and ₹1.32 lakhs in relevant years.”

The Court added:

“Mere presence before the Sub-Registrar on the date fixed does not prove readiness and willingness under Section 16(c). The burden was on the plaintiff—not the defendant—to establish the ability to pay.”

The High Court referred to binding precedents from the Supreme Court, including:

• Umabai v. Nilkanth Dhondiba Chavan (2005)

• Man Kaur v. Hartar Singh Sangha (2011)

and noted that these had been misapplied or ignored by the lower courts.

“Conduct of the Plaintiff Betrays Readiness”: Opting for Third-Party NOC Proved Fatal

The judgment also noted a crucial factual twist: the plaintiff used a blank signed form given by the defendant to apply for an NOC in favour of third parties—Vipin and Mohit Singla—instead of himself.

“This conduct shows that the plaintiff himself deliberately avoided applying in his own name, thereby defeating the contractual stipulation.”

Clause 5 of the agreement did allow nomination, but once the plaintiff opted to nominate others, he assumed responsibility for performance through them.

The Court further observed:

“The plaintiff never invoked Clause 6 for extension of date. Nor did he issue any notice between 30.12.2005 and 20.12.2008, the date of suit.”

The delay, coupled with complete silence and no evidence of financial preparedness, led the Court to conclude that the plaintiff’s claim was not bona fide.

“Defendant’s Readiness Proven Through Evidence, Plaintiff’s Claim Was Legally Unsound”

The High Court also found that the defendant had obtained a conveyance deed in his favour on 06.02.2006, and had issued a legal notice dated 09.02.2006, calling upon the plaintiff to complete the transaction by 07.03.2006. The address was correct, and the Court noted:

“Service under UPC is valid, especially when the address is admitted.”

Thus, the burden of performance was shown to have shifted, and the plaintiff did not act on the opportunity.

Recovery Suit Dismissed, Lower Courts Reversed

Summarizing the case, the High Court declared:

“The plaintiff was never ready and willing to perform his part of the contract. Both courts erred in decreeing the suit for refund by shifting the burden onto the defendant.”

Accordingly, the appeal was allowed, and the plaintiff’s suit was dismissed with costs throughout.

Date of Decision: 18th September 2025