Readiness and Willingness Is Not a Ritual—Plaintiff Must Prove Financial Capacity: Madras High Court Denies Specific Performance of Sale Agreement

“Non-examination of plaintiff, non-deposit of balance amount, and absence of financial proof—no specific performance can be granted where readiness is only pleaded, not proved.” - Madras High Court, in a well-reasoned judgment held that specific performance of a sale agreement cannot be granted when the plaintiff fails to prove financial readiness and willingness to perform contractual obligations. Reversing the decree of the trial court, the High Court ruled that although the execution of the sale agreement was proved, the plaintiff’s failure to deposit the balance sale consideration, coupled with her absence from the witness box, rendered her claim legally untenable.

The Court allowed the appeal in part, declining specific performance, but granted the alternative relief of refund of ₹8,25,000/- paid as advance, with 12% simple interest per annum from the date of suit till realization, creating a charge over the suit property.

The dispute arose out of a Sale Agreement dated 24 July 2008, executed by the defendant, Dhanabakyamary, in favour of the plaintiff, T. Dharmalakshmi, for a consideration of ₹23,50,000/-. The plaintiff paid an advance of ₹50,000/- initially and later an additional ₹7,75,000/- in instalments, totaling ₹8,25,000/-. The agreement provided that vacant possession would be delivered, and the sale completed within three months.

The plaintiff alleged that despite repeated requests and payments, the defendant refused to hand over possession or execute the sale deed, leading her to file a suit for specific performance, or alternatively for refund of the amount paid with interest.

The defendant denied the existence of a valid agreement, alleging that the documents were forged, and that she only borrowed money from the plaintiff, who was a moneylender.

The Trial Court decreed the suit, granting specific performance, but this decision was challenged by the defendant in appeal.

“Mere assertion is not proof”—Court finds plaintiff not ready and willing to perform her part of the contract

A pivotal legal question before the Court was whether the plaintiff was “ready and willing” to perform her part of the contract as required under Section 16(c) of the Specific Relief Act, 1963.

Justice Sakthivel underlined the settled legal position: “From the explanation under Section 16 of the Specific Relief Act, it is clear that the plaintiff need not mandatorily deposit the balance sale consideration unless directed by Court to do so. But the plaintiff must prove the availability of funds in order to make payment in time.”

Here, the plaintiff neither produced any bank statements, nor income tax returns, nor any documentary evidence to prove she had the financial means to pay the remaining ₹15,25,000/-. Moreover, despite the Trial Court directing her to deposit the balance within two months of the decree (by 13 September 2012), she failed to comply even before the appeal was filed or before obtaining stay.

“The cumulative facts and circumstances of the case would show that the plaintiff was not ready and willing to perform her part of the contract.”

The Court observed that readiness and willingness is not merely a ritualistic assertion, but must be backed by substantive material, especially when specific performance—a discretionary equitable remedy—is sought.

“The best person to speak of readiness is the plaintiff herself—her absence is fatal”

Another critical lapse highlighted by the Court was the non-examination of the plaintiff herself.

“The plaintiff is the competent person to depose about her readiness and willingness. Non-examination of the plaintiff also weakens the case of the plaintiff qua her readiness and willingness.”

The Court held that a power of attorney holder or relative cannot substitute for personal testimony on matters involving one’s mental state, financial capacity, and intent to perform.

Thus, the plaintiff failed on a vital statutory requirement, resulting in denial of specific performance.

“Signatures, Undertakings, and Evidence Establish Sale Agreement—but equity cannot ignore unreadiness”

While the Court found that the Sale Agreement dated 24 July 2008 was genuine, and that the plaintiff had paid ₹8,25,000/-, it refused to overlook the lack of financial evidence and the failure to act diligently.

Referring to the signed undertaking dated 2 August 2008, and the testimony of a witness to the agreement and endorsements, the Court ruled:

“The Trial Court, by comparing the admitted signature found in Ex-A4 – Undertaking Letter with the signatures in the Sale Agreement, rightly held them to be the same. This is justifiable.”

Still, given the legal requirement under Section 16(c) and the principles laid down by the Supreme Court in Man Kaur v. Hartar Singh Sangha [(2010) 10 SCC 512] and other precedents, the Court declined the primary relief.

The Madras High Court reiterated the fundamental legal position that the grant of specific performance requires more than proving a valid agreement—it requires credible evidence of readiness and willingness to perform.

“In short, this Court concludes that the plaintiff was not ready and willing to perform her part of the contract.”

Accordingly, the decree for specific performance was set aside, and the suit was decreed for the alternative relief of refund of ₹8,25,000/- with 12% simple interest, secured by a charge over the suit property.

Date of Decision: 19 August 2025