Payment Of 93% Sale Consideration Demonstrates Readiness & Willingness For Specific Performance: Supreme Court

Supreme Court, in a significant ruling dated May 27, 2026, held that the payment of a substantial portion of the sale consideration—amounting to approximately 93%—is a clear and compelling indicator of a plaintiff's readiness and willingness to perform a contract. A bench of Justice Sanjay Karol and Justice Vipul M. Pancholi observed that when a major chunk of the consideration is already paid, there appears no logical reason to hold that the plaintiff lacked the intent to complete the transaction.

The Court further clarified that the High Court, while exercising jurisdiction under Section 100 of the Code of Civil Procedure (CPC), is not permitted to routinely interfere with concurrent findings of fact unless they are shown to be perverse or based on no evidence. The bench noted that re-appreciation of evidence just to replace the findings of lower courts with a different view is impermissible within the limited scope of a second appeal.

The appellant (purchaser) entered into a sale agreement in 2010 to purchase a property for ₹9,30,000, out of which ₹9,00,000 was paid as earnest money. When the defendants became evasive regarding the execution of the sale deed, the appellant issued a legal notice and subsequently filed a suit for specific performance. The Trial Court decreed the suit, but the First Appellate Court and the Madras High Court denied specific performance, instead ordering a refund of the advance amount with interest.

The primary question before the Court was whether the High Court was justified under Section 100 CPC in reversing the concurrent findings of the lower courts which had held the sale agreement to be genuine and valid. The Court was also called upon to determine whether the plaintiff had established continuous readiness and willingness as mandated under Section 16(c) of the Specific Relief Act (SPA), 1963.

High Court Cannot Re-Appreciate Evidence In Second Appeal

The Supreme Court emphasized that Section 100 CPC confers a limited jurisdiction to entertain a second appeal only when a substantial question of law arises. It observed that the High Court had erroneously interfered with the concurrent findings of the Trial Court and the First Appellate Court regarding the validity of the sale agreement. Both lower courts had rejected the defense that the agreement was merely a "security document."

"The High Court, while interfering with the said finding, failed to demonstrate that the conclusions arrived at by the Courts below suffered from any perversity, material illegality or were in ignorance of relevant evidence."

The bench reiterated the principles laid down in Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, noting that if two inferences are possible from a given set of circumstances, the one drawn by the lower appellate court is binding on the High Court. It held that the High Court's decision to treat the agreement as a security arrangement, despite lack of evidence, was a clear overreach of its second appellate jurisdiction.

Continuous Readiness and Willingness Under Section 16(c) SPA

Regarding the requirement of "readiness and willingness" under Section 16(c) of the SPA 1963, the Court held that these traits must be gathered from the entirety of the facts and the overall conduct of the parties. The Court found it difficult to sustain the findings of the High Court which had denied specific performance on the grounds that the plaintiff failed to prove willingness within the four-month stipulated period.

"The requirement is not that the plaintiff should continuously approach the defendant with payment or make incessant requests for performance."

The Court noted that out of the total consideration of ₹9,30,000, the plaintiff had already parted with ₹9,00,000. It reasoned that a purchaser who has paid nearly 93% of the total amount would not be unwilling to pay the nominal balance of ₹30,000 at the time of registration. Such a substantial payment, the Court held, is a manifest demonstration of the plaintiff standing by the contract.

Delay In Issuing Legal Notice Is Not Fatal To Specific Performance

The Court addressed the observation that the legal notice was issued after the expiry of the four-month period mentioned in the agreement. It held that as long as the suit for specific performance is filed within the prescribed period of limitation, mere delay in issuing a notice or filing the suit cannot be held against the plaintiff to deny the relief of specific performance.

"In India, mere delay cannot be a ground for refusing the said relief, for the statute prescribes the period of limitation. If the suit is in time, delay is sanctioned by law."

The bench observed that the readiness and willingness of the plaintiff must be assessed in light of the attending circumstances, including the defendants' conduct in demanding more money and becoming evasive. Since the defendants failed to reply to the legal notice or dispute the assertions made therein, an adverse inference was rightly drawn against them by the Trial Court.

The Supreme Court allowed the appeal and set aside the judgments of the High Court and the First Appellate Court. It restored the Trial Court's decree for specific performance, holding that the plaintiff had sufficiently established his readiness and willingness. The Court concluded that once an agreement is found to be genuine and a major portion of the consideration is paid, the discretionary relief of specific performance ought not to be denied on technical grounds of minor delays.

Date of Decision: 27 May 2026