Specific Relief Act | Readiness and Willingness Must Be Real and Continuous — Plaintiffs Cannot Withhold Funds and Blame the Seller: Bombay High Court

“Frustrated Agreement Cannot Be Specifically Enforced”, In a detailed and reasoned decision, the Bombay High Court dismissed a Second Appeal filed by Stephen Noel D'Souza and another, who had sought specific performance of an agreement to sell agricultural land, holding that the plaintiffs failed to prove continuous readiness and willingness, and that performance of the contract had become legally impossible due to statutory and financial constraints.

Justice Milind N. Jadhav, speaking for the Court, upheld the concurrent findings of the Trial Court and First Appellate Court, concluding that the plaintiffs had failed to discharge their obligations under Section 13(1)(c) of the Specific Relief Act, 1963, and that the very terms and execution of the contract revealed a frustrated agreement incapable of enforcement.

The Second Appeal was dismissed with a further direction to refund the amount of ₹1,51,000/- deposited by the plaintiffs, along with accrued interest.

“An Agreement That Omits Statutory Preconditions Cannot Be Enforced”: Court Holds Sale to Non-Agriculturists Without Collector’s Permission Was Legally Impossible

At the heart of the dispute was an Agreement to Sell dated 30 July 2007 between the original defendant and the plaintiffs (non-agriculturists), for a parcel of ancestral agricultural land. The land, encumbered with a significant loan of over ₹4 lakhs from Dena Bank and other liabilities, was to be sold for ₹7.61 lakhs. The defendant had received ₹1.5 lakhs at the time of agreement execution, while the balance was to be paid at the time of sale deed.

However, the agreement was entirely silent on a critical legal requirement: the Nazrana amount of ₹1.5 lakhs to be deposited with the Collector in order to obtain mandatory permission for transfer of agricultural land to non-agriculturists. This omission, the Court noted, was not incidental.

“The entire agreement is conspicuously silent about the Nazrana amount to be paid to the Collector,” held Justice Jadhav. “This crucial condition was not mentioned in the Agreement to Sale and it was camouflaged with the subdivision order.”

The Court noted that the plaintiffs were well aware of their non-agriculturist status, and the legal necessity of Collector’s permission, yet failed to address this either contractually or through financial support.

“A Buyer Cannot Be Ready and Willing Without Assisting in Discharge of Encumbrances”: Plaintiffs’ Conduct Fails Legal Standard of Section 13(1)(c)

The plaintiffs argued that they were always ready and willing to perform their part of the contract, but that the defendant failed to obtain subdivision and sale permission, or remove bank charges.

The Court was not convinced.

Justice Jadhav emphasized that Section 13(1)(c) of the Specific Relief Act casts a clear obligation on the buyer to assist in discharging encumbrances if they seek specific performance:

“In the given facts and circumstances of the case, it was incumbent on behalf of the Plaintiffs to invoke the provisions of Section 13(1)(c) of the Specific Relief Act, 1963 by offering to discharge the encumbrances from the unpaid consideration which the Plaintiffs failed to do so.”

It was observed that Dena Bank’s outstanding loan alone was ₹4,14,669/-, apart from a separate charge from Nashik Merchants Cooperative Bank. Plaintiffs had paid only ₹1.5 lakhs and withheld the balance, citing defendant’s failure to secure approvals.

The Court held this to be contrary to law and equity, stating that: “Stoic silence of Plaintiffs from the date of execution of agreement until filing of the Suit proceedings... despite very well knowing about the obligation for executing the sale deed has been held against the Plaintiffs.”

“Frustration Is Evident Where Agreement Ignores Basic Legal and Financial Realities”: Contract Held Unenforceable

The Court gave significant weight to the finding that performance of the agreement was impossible given the financial incapacity of the seller and the gross undervaluation of the land, which was sold for ₹7.61 lakhs despite a market value of over ₹12 lakhs per acre.

“It was practically impossible for the Defendant to fulfill his obligations under the Agreement to Sale from the initial consideration of ₹1,51,100/-,” the Court noted, highlighting both the outstanding loans and the statutory preconditions.

The agreement was held to have failed the test of enforceability, and the plaintiffs’ claim of being misled was rejected.

The Court further took note of the socio-economic circumstances of the original defendant, who had executed the agreement under financial distress to fund his children’s education, and who passed away before trial. His son, Defendant No. 1C, stepped into the witness box and produced bank records and evidence that were accepted by both courts below.

“No Substantial Question of Law Arises Where Concurrent Findings Are Based on Evidence”: Second Appeal Dismissed

The plaintiffs’ attempt to overturn the dismissal of their suit in second appeal was categorically rejected. The High Court ruled that no perversity or legal error was found in the concurrent findings of the Trial Court (dated 31 July 2012) and the First Appellate Court (dated 5 May 2017).

“Both the judgments have been correctly passed and cannot be faulted with and do not call for any interference of this Court,” held Justice Jadhav.

Referring to Order XX Rule 5 CPC, the Court affirmed that all material issues had been properly addressed and decided by the lower courts.

“Plaintiffs Entered for Investment, Defendants Depended on Land for Livelihood”: Hardship and Equity Favoured Seller’s Family

Another critical aspect addressed by the Court was the balance of hardship and equity. The plaintiffs admitted that their purchase was for investment purposes, while the land was the only source of livelihood for the defendant’s family.

“Considering that Defendant No.1 had expired... and his elder son is tilling the suit land shows that the livelihood of the family members... is dependent on the agricultural land,” the Court observed.

This, coupled with the plaintiffs’ non-agriculturist status, further weighed against the grant of specific performance.

Refund of Deposit Ordered

After the appeal was dismissed, the plaintiffs’ counsel requested refund of ₹1,51,000/- deposited under the Trial Court’s 2012 order. The Court directed that the amount, along with accrued interest, be returned within two weeks, clarifying that the Trial Court should act on the server copy of the judgment and not insist on a certified copy.

This decision stands as a firm reaffirmation of the settled position in law that specific performance is a discretionary relief, and that the doctrine of readiness and willingness is not a mere formality but a substantive obligation. When statutory permissions are required for performance, an agreement that ignores legal realities and leaves critical preconditions unaddressed cannot form the basis for equitable relief.

“Once time was not made the essence of the contract... and it was practically impossible for the defendant to fulfill his obligations... the case for specific performance failed and was not accepted.”

By refusing to reward speculative litigation and upholding the lower courts’ evidence-based findings, the Bombay High Court has delivered a clear message: Equity aids the vigilant, not the passive investor.

Date of Decision: 5 January 2026