REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4072 OF 2022

C. Haridasan …Appellant

Versus

Anappath Parakkattu Vasudeva Kurup & Others …Respondents

JUDGMENT

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment

and order dated 03.11.2021 passed by the High Court of Kerala at

Ernakulam in Regular First Appeal No. 63 of 2009, by which the High

Court has allowed the said appeal preferred by the original defendants

and has set aside the judgment and decree dated 18.08.2008 passed by

the learned trial Court in Original Suit No. 205/2006, decreeing the suit
Signature Not Verified

Digitally signed by
Neetu Sachdeva
Date: 2023.05.22
10:24:55 IST
Reason:
for specific performance, the original plaintiff has preferred the present

appeal.
1
2. That the plaintiff and the defendants entered into an agreement to

sell dated 07.08.2005 under which the defendants agreed to sell the

land in question for a consideration of Rs. 8,750/- per cent. The plaintiff

paid an amount of Rs. 10,000/- as advance towards the part sale

consideration amount. The balance consideration was agreed to be paid

by the plaintiff within six months from the date after measuring the

property provided the defendants make available the documents of title

including the purchase certificate under the Kerala Land Reforms Act.

2.1 That thereafter, the plaintiff served a legal notice dated 02.11.2006

upon the defendants to execute the sale deed to which the defendants

sent reply and refused to execute the sale deed and cancelled the

agreement to sell. Therefore, the appellant herein – original plaintiff

instituted a Suit being Original Suit No. 205/2006 before the learned trial

Court for specific performance of agreement to sell and in the alternative

return of the plaintiff’s amount with interest.

2.2 The said suit was resisted by the defendants by filing written

statement. It was denied that the plaintiff was ever ready and willing to

perform his part of the contract. It was also submitted that the suit was

filed after one year from the date of expiry of the agreement. It was the

case on behalf of the defendants that defendant No.1 was a heart

patient and he had undergone the surgery on which huge amount was

2
spent which was borrowed from others and therefore to clear off the said

liability, the defendants agreed to sell the property in question. It was

also the case of the defendants that even though the defendants had

approached the plaintiff to pay some more money, he was not prepared

for the same, thereby defendants had been compelled to sell the gold

ornaments and clear the liabilities. It was submitted that the defendants

were always ready and willing to perform their part of the agreement.

2.3 The learned trial Court framed the following issues:

“1. Whether plaintiff had performed his part of the

contract, thereby entitling him for specific performance of
the agreement?
2. Whether plaintiff has got any cause of action against
defendants?
3. Whether the plaintiff is entitled to the reliefs sought?
4. Relief and costs?”

2.4 On appreciation of the entire evidence on record, the learned trial

Court decreed the suit for specific performance of agreement to sell

dated 07.08.2005. However, at the same time and to do complete

justice between the parties, the learned trial Court directed the plaintiff to

pay 25% more amount, over and above the agreed consideration i.e.,

sale consideration at the rate of Rs. 11,000/- per cent (Rs. 8750/- per

cent + 25% = 10,037/-, rounded off to Rs. 11,000/-). The learned trial

3
Court also directed the plaintiff to deposit the balance sale consideration,

i.e., Rs. 3,97,000/-, within a period of two months.

2.5 Feeling aggrieved and dissatisfied with the judgment and decree

passed by the learned trial Court decreeing the suit for specific

performance of agreement to sell dated 7.8.2005, the defendants

preferred an appeal before the High Court. Without upsetting the

findings recorded by the learned trial Court on execution of agreement to

sell dated 7.8.2005; payment of part sale consideration and the other

issues held in favour of the plaintiff, straightway the High Court

considered Section 20 of the Specific Relief Act and opined that the trial

Court was not justified in enhancing the sale consideration and ought not

to have exercised the discretion in favour of the plaintiff. By the

impugned judgment and order, the High Court, while relying upon and/or

considering Section 20 of the Specific Relief Act, has partly allowed the

appeal and has set aside the judgment and decree for specific

performance and has directed the defendants to pay Rs. 3,10,000/- to

the plaintiff.

2.6 Feeling aggrieved and dissatisfied with the impugned judgment

and order passed by the High Court, setting aside the judgment and

decree passed by the learned trial Court for specific performance of

agreement to sell, the original plaintiff has preferred the present appeal.

4
3. It is vehemently submitted by the learned counsel appearing on

behalf of the appellant that in the facts and circumstances of the case,

the High Court has committed an error in reversing the decree of specific

performance.

3.1 It is submitted that the execution of the agreement to sell and

receipt of part sale consideration have not been disputed by the

defendants.

3.2 It is submitted that as per the conditions mentioned in the

agreement to sell, the balance sale consideration was required to be

paid within a period of six months from the date after measuring the

property provided the defendants make available the documents of title

including the purchase certificate under Kerala Land Reforms Act, which

was yet to be obtained.

3.3 It is submitted that even the purchase certificate was issued by the

Government during the pendency of the suit. It is submitted that

therefore once the execution of agreement to sell is admitted and the

part sale consideration is received and it was found that the plaintiff was

always ready and willing to perform his part of the contract, the learned

trial Court was justified in decreeing the suit for specific performance.

3.4 It is then submitted that even, though not required, the learned trial

Court enhanced the sale consideration to do complete justice, which the

5
plaintiff agreed. It is submitted that enhancement of the sale

consideration by the learned trial Court could not have been gone

against the plaintiff.

3.5 It is further submitted that even otherwise when while exercising

the discretion in favour of the plaintiff to pass a decree for specific

performance, the learned trial Court enhanced the amount of sale

consideration and directed the plaintiff to pay some more amount than

the sale consideration mentioned in the agreement to sell, the same was

not required to be interfered with by the High Court.

3.6 It is submitted that as such the High Court has straightway gone

and considered Section 20 of the Specific Relief Act, without adverting to

the findings recorded by the learned trial Court on execution of the

agreement to sell; payment of part sale consideration and that the

plaintiff was always ready and willing to perform his part of the contract.

3.7 Making the above submissions, it is prayed to allow the present

appeal.

4. The present appeal is opposed by Shri Raghenth Basant, learned

counsel appearing on behalf of the original defendants.

4.1 It is vehemently submitted by the learned counsel appearing on

behalf of the original defendants that as such the agreement to sell was

6
a forced agreement to sell as at the relevant time, defendant no.1

suffered a heart attack and he was in need of money and therefore he

was compelled to sell the property in question. It is therefore submitted

and as rightly observed by the High Court, the learned trial Court ought

not to have exercised the discretion in favour of the plaintiff, rather ought

to have exercised the discretion in favour of the defendants on the

ground of equity.

4.2 Learned counsel appearing on behalf of the original defendants

has submitted that at the time of execution of agreement to sell, the

plaintiff paid a meagre amount of Rs. 10,000/- only as advance towards

the consideration amount. It is submitted that as the defendants were

hard pressed and were in need of immediate money as defendant no.1

suffered a heart attack, it was agreed that the balance consideration to

be paid within six months from the date of agreement to sell. It is

submitted that thereafter as the plaintiff did not pay the balance sale

consideration within six months, the defendants cleared their liabilities by

selling gold ornaments of their family members and therefore thereafter

the defendants were not in need of money and therefore there was no

cause and/or reason to sell the property in question and thereafter the

agreement to sell was cancelled. It is submitted that considering the

aforesaid circumstances, the High Court has rightly set aside the decree

7
for specific performance, considering Section 20 of the Specific Relief

Act and has rightly exercised the discretion in favour of the defendants,

rather than in favour of the plaintiff.

4.3 It is further submitted by the learned counsel appearing on behalf

of the defendants that as on today the price of the property in question

has gone very high and therefore it is prayed not to interfere with the

impugned judgment and order passed by the High Court.

5. I have heard the learned counsel for the respective parties at

length.

At the outset, it is required to be noted that the execution of

agreement to sell and receipt of part sale consideration paid under the

agreement to sell has not been disputed by the defendants. It is not in

dispute that the defendants as such agreed to sell the property in

question. The relevant terms of agreement to sell, as agreed between

the parties, are as follows:

“(a) the balance consideration was to be paid by the

Petitioner to the Respondents within six months from the
date of sale agreement.
(b) The Petitioner was obligated to measure the property
at his own expense, arrange the balance consideration
amount and prepare the deeds with respect to the plaint
schedule property in favour of himself or in favour of its
nominees.
(c) Respondents were to handover the abovementioned
deeds as also the anterior documents, possession

8
 certification, tax receipt and encumbrance certificate for the
last 13 years, purchase certificate, either in their originals
or certified copies within the stipulated six months to the
Petitioner.
(d) After the fulfilment of the above terms and conditions,
the Respondent No.1 and his wife were obligated to
execute the sale deed prepared by the Petitioner and
register the same after obtaining the balance consideration
amount and then accordingly, the Respondents were to
hand over actual possession of the plaint schedule
property to the Petitioner.”

6. It is contended on behalf of the defendants that the agreement to

sell was a forced agreement to sell. On the contrary, the defendants

stated in the written statement in para 4 that the defendants were

always ready and willing to perform their part of the contract. It may be

true that at the relevant time the defendants may be in need of money.

However, the fact remains that they agreed to sell the property in

question for sale consideration mentioned in the agreement to sell and

as observed hereinabove, it was the case on behalf of the defendants

that they were always ready and willing to perform their part of the

contract. Therefore, as observed hereinabove, it was never the case on

behalf of the defendants in the written statement and/or even before the

learned trial Court that the agreement to sell was inequitable and/or was

a forced agreement to sell. Even the learned trial Court also did not

frame the issue, “whether agreement to sell was a forced agreement to

sell/contract or not”. On appreciation of entire evidence on record, the

9
learned trial Court after recording the findings on the execution of the

agreement to sell by the defendants and receipt of part sale

consideration and that the plaintiff was always ready and willing to

perform his part of the contract, decreed the suit for specific

performance. By the impugned judgment and order, the High Court, as

such, has not commented upon and/or set aside any of the findings

recorded by the learned trial Court, recorded while passing a decree for

specific performance. Straightway, the High Court has considered

Section 20 of the Specific Relief Act and has observed and held that by

enhancing the amount of sale consideration, the learned trial Court has

wrongly exercised the discretion in favour of the plaintiff. The High

Court has commented upon the order passed by the learned trial Court

enhancing the amount of sale consideration and directing the plaintiff to

pay more amount than the sale consideration mentioned in the

agreement to sell.

7. When to do the complete justice and relying upon and/or

considering the decision of this Court in the case of Pratap Lakshman

Muchandi v. Shamlal Uddavadas Wadhwa, (2008) 12 SCC 67, the

learned trial Court directed the plaintiff to pay some more amount than

the amount mentioned in the agreement to sell, at the most, the plaintiff

can be said to be aggrieved. Still, the High Court has considered such

10
an order passed by the learned trial Court against the defendants. As

such, the learned trial Court was absolutely justified in compensating

the defendants by paying some more amount while passing a decree

for specific performance. Therefore, in the facts and circumstances of

the case and more particularly when the learned trial Court exercised

the discretion in favour of the plaintiff after having observed and

recorded the findings on the execution of the agreement to sell by the

defendants and that the part sale consideration was paid by the plaintiff

which was accepted by the defendants and thereafter the finding that

the plaintiff was always ready and willing to perform his part of the

contract, the learned trial Court was absolutely justified in passing the

decree for specific performance. The High Court has erred in interfering

with the judgment and decree passed by the learned trial Court, without

setting aside the findings recorded by the learned trial Court recorded

while passing the decree for specific performance. The impugned

judgment and order passed by the High Court is unsustainable, both, on

law as well as on facts.

8. In view of the above and for the reasons stated above, the

present appeal succeeds. The impugned judgment and order passed

by the High Court is hereby quashed and set aside and the judgment

11
and decree passed by the learned trial Court for specific performance of

agreement to sell is hereby restored.

However, to do complete justice and in exercise of powers under

Article 142 of the Constitution of India, I direct that over and above the

sale consideration mentioned in the agreement to sell and the amount

already deposited by the plaintiff, the plaintiff to pay a further sum of Rs.

10,00,000/- (Rupees Ten Lakhs only) to the original defendants, to be

paid within a period of six weeks from today. The amount which might

have been deposited by the original defendants, deposited pursuant to

the impugned judgment and order passed by the High Court, i.e., Rs.

3,10,000/- be also returned/paid to the original defendants.

9. The present appeal is accordingly allowed in the aforesaid terms.

However, in the facts and circumstances of the case, there shall be no

order as to costs.

……………………………….J.
[M.R. SHAH]

NEW DELHI;
JANUARY 13, 2023.

12
 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4072 OF 2022

(Arising out of SLP (C) No. 2567 of 2022)

C. HARIDASAN …APPELLANT

VERSUS

ANAPPATH PARAKKATTU …RESPONDENT(S)

VASUDEVAKURUP & ORS.

JUDGMENT

NAGARATHNA J.

I have had the advantage of reading the judgment

proposed by His Lordship M.R. Shah, J. However, I regret to

agree with the reasoning as well as the conclusion arrived at by

His Lordship. Hence, my separate judgment.

2. The plaintiff in Original Suit No. 205/2006 has assailed

the judgment dated 03rd November, 2021, passed by the High

13
Court of Kerala at Ernakulam in Regular First Appeal No. 63 of

2009. By the impugned judgment, the High Court has set-aside

the judgment and decree passed by the Trial Court, i.e., the

Court of the Subordinate Judge, Tirur in O.S. No. 205/2006, by

which the suit for specific performance of an agreement of sale of

Kanam and Kuzhikoor rights, filed by the plaintiff, was allowed.

Hence, the appeal by the plaintiff in the suit.

3. For the sake of convenience, the parties herein shall be

referred to in terms of their rank and status before the Trial

Court.

4. The case of the plaintiff in a nutshell is stated as under:

4.1 That the defendants who have Kanam and Kuzhikoor rights

over the suit property, measuring 37 cents since 1989, assigned

such rights over the same in favour of the plaintiff for a

consideration of Rs. 8750/- per cent. That an agreement of sale

in respect of the Kanam and Kuzhikoor rights over the suit

property was entered into between the defendants-sellers and

the plaintiff-buyer on 7th August, 2005 in the presence of

witnesses. An advance sale consideration of Rs. 10,000/- was

14
paid by the plaintiff. The remaining sale consideration was

required as per the agreement to be paid within six months from

the date on which agreement of sale was entered into, following

which the sale deed was to be executed in favour of the plaintiff

or his nominees, in respect of the Kanam and Kuzhikoor rights,

which are valuable usufructuary rights and possession of the

suit property was to be handed over to the plaintiff.

4.2 That before the expiry of six months, the defendants were

to make available to the plaintiff documents pertaining to the

suit property, such as tax receipts, non-encumbrance certificate,

purchase certificate etc. That the plaintiff contacted the

defendants repeatedly and expressed his willingness to comply

with the terms of the agreement of sale dated 7 th August, 2005.

However, defendants sought to evade and delay compliance with

the said agreement on the ground that anterior documents and

certificates relating to the suit property could not be obtained.

4.3 That though the plaintiff had sent a legal notice dated 02 nd

November, 2006 calling upon the defendants to execute the deed

assigning Kanam and Kuzhikoor rights after accepting the

15
balance sale consideration from the plaintiff, the defendants

took no positive steps in this regard.

4.4 That the plaintiff was ready and willing to tender the

balance sale consideration and have the deed of assignment

registered in his name within the period stipulated in the

agreement. That the defendants were attempting to evade the

agreement of sale in an attempt to obtain a better price for the

Kanam and Kuzhikoor rights over the suit property as the

market value thereof had increased manifold. Therefore, the

plaintiff was constrained to file a suit for specific performance of

the agreement of sale of Kanam and Kuzhikoor rights, dated 7th

August, 2005.

4.5 With the aforesaid averments, it was prayed that the

defendants be directed to receive the balance sale consideration

from the plaintiff and execute the sale deed in respect of the

Kanam and Kuzhikoor rights over the suit property in his favour.

In the alternative, it was prayed that the defendants may be

directed to return the advance amount of Rs. 10,000/- paid by

the plaintiff, together with interest thereon.

16
5. In response to the plaint, the defendants filed a written

statement, the contents of which are encapsulated as under:-

5.1 That the plaintiff was never ready and willing to perform

his obligations under the agreement dated 7th August, 2005.

That the suit for specific performance was filed on 13 th

December, 2006, which was nearly one year after the expiry of

the deadline fixed in the agreement, for compliance of the terms

thereof.

5.2 That as per the agreement of sale of Kanam and Kuzhikoor

rights, the plaintiff-purchaser was to measure the suit property

and accordingly ascertain the sale consideration payable at the

rate of Rs. 8750/- per cent. That no attempt was made by the

plaintiff in this regard. Therefore, it could not be said that the

plaintiff was ready and willing to perform his part of the

agreement, more so, when no attempt was made by the plaintiff

to determine even as much as the exact purchase price for the

Kanam and Kuzhikoor rights over the suit property. That the

plaintiff had paid only Rs. 10,000/- which is a very negligible

portion of the purchase price. That the defendants were in dire

need for finances in order to bear the expenses for cardiac

17
treatment of defendant no. 1. Therefore, the defendants had

approached the plaintiff repeatedly, with requests to tender the

balance sale consideration. However, the plaintiff did not pay

heed to the requests of the defendants and therefore, the

defendants were constrained to raise the requisite funds by

selling their jewellery and ornaments.

5.3 That the defendants agreed to sell their Kanam and

Kuzhikoor rights over the suit property only with a view to

urgently raise requisite finances to enable them to bear the

medical expenses for the treatment of defendant no. 1.

Therefore, it was additionally important for the plaintiff to have

duly paid the balance consideration within six months from the

date on which agreement of sale of Kanam and Kuzhikoor rights

was entered into. Since the plaintiff failed to do so, it could not

be concluded that he was ready and willing to perform his

obligations under the agreement dated 7th August, 2005.

5.4 That the plaintiff was by occupation, a real estate agent

and frequently engaged in the practice of entering into

agreements of sale in respect of properties and thereafter

attempting to find buyers for smaller extents or portions of such

18
properties. That since the plaintiff could not find prospective

buyers, he did not pursue the agreement dated 7 th August, 2005

for over one year and had been attempting to evade the same.

However, since the value of the suit property considerably

increased over time, the plaintiff sought to claim the same at a

price significantly below the prevailing market rate by placing

reliance on a stale agreement of sale of Kanam and Kuzhikoor

rights.

5.5 With the aforesaid averments, it was prayed before the

Trial Court that the suit filed by the plaintiff for specific

performance of the agreement of sale dated 7 th August, 2005, be

dismissed.

6. The Court of the Subordinate Judge, Tirur by its judgment

and decree dated 18th August, 2008 allowed the suit filed by the

plaintiff and passed a decree of specific performance of the

agreement of sale of Kanam and Kuzhikoor rights dated 7th

August, 2005. Sale consideration was enhanced by 25% and it

was directed that a sale consideration of Rs. 11,000/- per cent,

instead of Rs.8750/- per cent, be paid by the plaintiff. It was

directed that on payment of the sale consideration, sale deed in

19
respect of the Kanam and Kuzhikoor rights over the suit property

be executed in favour of the plaintiff within a period of three

months from the date on which the decree was passed.

The salient findings of the Trial Court are as under:

i) That specifying the time for performance of an agreement

is not sufficient to prove that time was indeed the essence

of the contract. That if time was the essence of the

agreement, either of the parties ought to have initiated due

performance of the same within the specified period.

However, since neither of the parties to the agreement of

sale had initiated timely steps in pursuance of the said

agreement, it was held that time was not the essence of the

contract.

ii) That the purchase certificate and title deed of the property

were not readily available with the defendants at the time

of entering into the agreement of sale of Kanam and

Kuzhikoor rights over the suit property. That this fact

raised the probability that non-performance of the

agreement within the stipulated time, was not attributable

to the plaintiff.

20
iii) That since the transaction in question involved sale of

rights over immovable property, a prudent purchaser

would have to satisfy himself as to the genuineness and

validity of the documents of title. Therefore, the first step

ought to have been taken by the defendants, by handing

over the relevant documents to the plaintiff, which would

have in turn enabled the plaintiff to measure the property

and tender the balance sale consideration. That the delay

in performance of the agreement of sale could be attributed

to the non-availability and non-furnishing of the title deeds

of the plaint schedule property.

iv) That the mere fact that the defendants had handed over

the photostat copy of the title deed to the plaintiff, could

not lead to the inference that the plaintiff could have

proceeded to measure the property.

v) That although a direction of specific performance would

cause some hardship to the defendants, because they

could no longer pursue their intention of constructing a

house on the suit property, that alone would not be a

ground to deny specific performance of a valid agreement.

21
vi) That since the value of the suit property had increased

manifold and had doubled within a short span of time,

specific performance, if allowed by payment of the

consideration agreed upon in the agreement, would confer

an undue benefit on the plaintiff. Therefore, the sale

consideration was enhanced by 25% vis-à-vis the

consideration agreed upon in the agreement dated 7 th

August, 2005.

7. Being aggrieved, the defendants preferred Regular First

Appeal No. 63 of 2009 before the High Court of Kerala at

Ernakulam. By the impugned judgment dated 3 rd November,

2021, the first appeal was allowed and the judgment of the Trial

Court dated 18th August, 2008 was set aside. The following

findings were recorded by the High Court in the impugned

judgment:

i) That the Trial Court could not have re-fixed the sale

consideration at Rs. 11,000/- per cent as against Rs.

8,750/- per cent, which was the price agreed upon by the

parties. That the Court could not have dictated or deviated

from the terms and conditions enumerated in the contract

for sale between the parties.

22
ii) That under Section 20 of the Specific Relief Act, 1963

(prior to the same being substituted by way of Act No. 18 of

2018) Courts were vested with the discretion to deny the

relief of specific performance. The Court could balance

competing interests by compensating the plaintiff in terms

of money so as to bring him back to his original position,

to the extent possible. The compensation so granted was to

be understood to be compensation for not granting specific

performance in favour of the plaintiff. The said provision

did not contemplate exercise of discretion to award an

amount to the defendant in excess of the amount agreed

upon contract of sale, while still allowing specific

performance.

iii) That in the present suit, the agreement of sale of Kanam

and Kuzhikoor rights was executed on 07 th August, 2005

when the defendants were faced with a financial crisis.

What was received by way of advance was merely 4% of the

sale consideration of Rs. 3,23,750/-. Therefore, it was not

a fit case for grant of the discretionary relief of specific

performance.

iv) Having regard to the fact that the plaintiff had, in

compliance with the judgment of the Trial Court dated 18 th

23
 August, 2008, deposited the enhanced consideration of Rs.

3,97,000/-, it was directed that an amount of Rs.

3,00,000/- be paid by the defendants to the plaintiff in

addition to the advance sum of Rs. 10,000/- which was

paid by the plaintiff at the time of entering into the

agreement of sale dated 07 th August, 2005. Such a

direction was issued based on a proposal made to that

effect by the counsel appearing on behalf of the

defendants.

Aggrieved by the judgment of the High Court allowing

the regular first appeal preferred by the defendants, the

plaintiff has approached this Court.

8. We have heard Sri M.K.S Menon, learned advocate

appearing on behalf of the appellant and Sri Raghenth Basant,

learned advocate appearing on behalf of the respondents, and

perused the material on record.

9. Learned counsel for the appellant-plaintiff made the

following submissions. At the outset it was contended that the

High Court was not right in allowing the first appeal preferred by

24
the defendants by applying Section 20 of the Specific Relief Act,

1963 (hereinafter “the Act”). That the present case was not a fit

case for exercising discretion to deny the relief of specific

performance.

9.1 It was next contended that the Trial Court rightly noted

that the first step ought to have been taken by the defendants,

by handing over the relevant documents to the plaintiff. That

since the purchase certificate and title deed of the property were

not readily available with the defendants at the time of entering

into the agreement, it was rightly presumed by the Trial Court

that the delay in performance of the agreement of sale was

attributable to the defendant.

9.2 It was urged that the High Court committed a serious error

in law by applying Section 20 of the Act to deny the relief of

specific performance in favour of the appellant-plaintiff. That the

relief could not be denied on the ground of insufficiency of sale

consideration in light of the fact that the market value of the suit

property had increased manifold over a period of time. That

denial of the relief of specific performance on such ground was

barred by Explanation 1 to Clause (c) of Section 20 (2) of the Act.

25
That although Section 20 permits denial of the remedy of

specific performance where a decree of specific performance

would involve some hardship to the defendant(s), the

Explanation to Clause (c) of Section 20 (2) clarifies that mere

insufficiency of consideration would not be deemed to constitute

‘hardship.’ Therefore, the consideration guiding the decision of

the High Court to deny the relief of specific performance, was

extraneous.

9.3 It was next contended that the Court ought to have

moulded the relief by having due regard to the conduct of the

plaintiff. That the plaintiff’s conduct was reflective of the fact

that he duly pursued the execution of the agreement of sale of

Kanam and Kuzhikoor and therefore, was entitled to be awarded

a decree of specific performance in his favour. That in the

absence of any proof demonstrative of delay, unwillingness,

unreadiness on the part of the plaintiff, the relief of specific

performance could not have been denied.

9.4 Learned counsel for the appellant contended that this

Court has authoritatively laid down that in cases where specific

performance of a contract is sought in relation to property, the

26
market value of which has increased since the date on which

contract of sale was entered into, it would be justified to award

an additional amount of consideration to the seller, at the

discretion of the Court, vide Pratap Lakshman Muchandi and

Ors. vs. Shamlal Uddavadas Wadhwa and Ors., (2008) 1

SCC 67. Therefore, the Trial Court had not erred in decreeing

the suit for specific performance in favour of the plaintiff, by

directing the plaintiff to pay additional sale consideration to the

defendants. That the direction of the Trial Court to enhance the

consideration did not amount to rewriting the terms of the

agreement, but was done with a view to balance the equities.

That the direction of the Trial Court ought to be appreciated in

light of the fact that the relief of specific performance is an

equitable remedy. In that context it was further submitted that

the plaintiff duly paid the enhanced sale consideration, which

fact also would demonstrate the conduct of the plaintiff and his

willingness to execute the agreement of sale.

9.5 It was submitted that the reason the plaintiff did not

tender the sale consideration in excess of 4% of the total

consideration agreed upon was because the defendants had not

made available any documents which would enable the plaintiff

27
to satisfy himself as to the title of the defendants. Therefore, the

High Court had erred in holding that since only 4% of the sale

consideration had been paid, it would not be a fit case to grant

the discretionary remedy of specific performance, without

appreciating the facts of the case in its true perspective.

With the aforesaid averments, it was prayed that the

impugned judgment of the High Court be set-aside and the

judgment of the Trial Court, be restored.

10. Respondent – defendants’ counsel per contra advanced the

following arguments:

10.1 He supported the impugned judgment of the High Court

and contended that the High Court rightly applied Section 20 of

the Act and denied the relief of specific performance of the

agreement dated 7th August, 2005. That the defendants’

daughter and son-in-law were desirous of building a house on

the suit property and therefore, they would be put through great

hardship if the suit for specific performance was decreed in

favour of the plaintiff; more so, given that market price of the

suit property had increased manifold over a period of time and it

28
would not be possible for the defendants to purchase rights over

land similar to the suit property with the enhanced

consideration awarded by the Trial Court.

10.2 It was further submitted that the High Court rightly

appreciated that the defendants had entered into the agreement

when they were faced with a financial crisis and therefore, it was

imperative that the plaintiff paid a significant portion of the

consideration, if not the entire sale consideration, within the

period of six months as stipulated in the agreement of sale of

Kanam and Kuzhikoor rights. That it was in the said context that

the fact as to payment of merely 4% of the sale consideration

would be relevant to determine the plaintiff’s readiness and

willingness to perform his obligations under the agreement of

sale. That the object of agreement to sell the Kanam and

Kuzhikoor rights over the suit property in the year 2005 was to

receive the entire sale consideration within a period of six

months, which would enable the defendants to pay off certain

debts which had been taken to enable the defendants to bear the

medical expenses towards cardiac treatment of defendant no. 1.

Since the plaintiff refused to pay the balance consideration

within the time stipulated in the agreement, notwithstanding

29
several requests by the defendants, the defendants were

compelled to sell their jewellery and ornaments to clear the

debts.

10.3 That by refusing to pay sale consideration exceeding 4% of

the total sale consideration within six months from the date of

the contract, the plaintiff defeated the purpose of the agreement

to sell the Kanam and Kuzhikoor rights. That the plaintiff was

well aware of the fact that the only reason compelling the

defendants to sell the Kanam and Kuzhikoor rights over suit

property at a nominal price agreed upon by the parties was the

critical financial condition that the defendants were faced with

at the time of entering into the agreement of sale. That freedom

from financial pressure within a short span of time (six months)

was the sole motive guiding the decision of the defendants to

part with the suit property. In that regard, it was contended that

time was the essence of the agreement and having failed to

deposit the balance sale consideration within the stipulated

period, the plaintiff could not subsequently seek the remedy of

specific performance, having defeated the purpose of the

agreement vis-à-vis the defendants.

30
10.4 It was submitted that admittedly, the defendants had,

immediately after executing the agreement of sale of Kanam and

Kuzhikoor rights , moved the Land Tribunal, Tirur for obtaining

the purchase certificate. However, the issuance of purchase

certificate and time taken for the same was not under the

control of the defendants. That the plaintiff was well aware of the

status of the matter at every juncture. It was averred that delay

on the part of the Land Tribunal in granting purchase certificate

could neither be attributed to the defendants, nor could it

absolve the plaintiff of his obligations under the agreement of

sale of Kanam and Kuzhikoor rights. That had the plaintiff duly

got measured the schedule property and tendered the balance

sale consideration, it could be concluded that he was ready and

willing to comply with the terms of the agreement.

10.5 With the aforesaid averments it was lastly submitted that

the High Court, appreciated the matter in its true perspective

and passed the impugned judgment which appropriately

balances equities between the parties and the same does not call

for interference by this Court. Therefore, it was prayed that the

instant appeal be dismissed.

31
11. Having heard the learned counsel for the respective

parties, the following points would arise for consideration which

shall be considered together:

i) Whether the plaintiff’s conduct demonstrates readiness

and willingness on his part to carry out his obligations

under the agreement of sale of Kanam and Kuzhikoor

rights dated 7th August, 2005?

ii) Whether the plaintiff, by not paying consideration above

4% of total sale consideration within the period stipulated

in the agreement, had defeated the purpose of the

agreement to sell Kanam and Kuzhikoor rights executed by

the defendants?

iii) What order?

The detailed narration of facts and contentions would not

call for reiteration.

12. The High Court has relied on Section 20 of the Act, prior to

the same being substituted by way of Act No. 18 of 2018, to

deny the relief of specific performance to the plaintiff. Section 20

of the Act as it stood prior to the Amendment Act of 2018

32
provided that the jurisdiction to decree specific performance is

discretionary. It said that the Court is not bound to grant such

relief merely because it is lawful to do so. Such a discretion,

however, was not to be exercised arbitrarily, but ought to have

been based on sound and reasonable judicial principles. The

Section also specified the circumstances in which the Court may

properly exercise the discretion not to decree specific

performance and it also specified when, in an appropriate case,

a decree could be given by proper exercise of discretion. Section

20, as it then stood was not an exhaustive provision, but merely

illustrative as it was not possible to define the circumstances in

which equitable relief could or could not be granted. If, therefore,

on a consideration of all the circumstances of the case, the

Court thought that it would be inequitable to grant the relief

prayed for, it should not do so.

13. However, in Shenbagam vs. K.K. Rathinavel, 2022 SCC

OnLine SC 71, this Court reiterated that in deciding whether or

not to grant the relief of specific performance, the Courts must

be cognizant of the conduct of the parties, the escalation in the

price of the suit property and consider whether one party will

unfairly benefit from the decree.

33
14. By way of the Specific Relief (Amendment) Act, 2018

(hereinafter “the Amendment Act”), Section 20 of the Act has

been substituted, thereby rendering the relief of specific

performance to be a statutory remedy, instead of a discretionary

remedy. Previously, the unamended provision granted the courts

the discretion to deny the relief of specific performance, on the

basis of judicially developed exceptions, even where it would

otherwise be lawful to direct specific performance. Now, such

statutorily created exceptions have been excluded. The

Amendment Act has eliminated the discretion of the courts in

cases involving specific performance of contracts and grants a

right to an aggrieved party to seek specific performance of a

contract in certain cases, subject to the provisions contained in

Sections 11(2), 14 and 16 of the Act. These Sections deal with

‘Cases in which specific performance of contracts connected with

trusts being enforceable’, ‘contracts which cannot be specifically

enforced’ and ‘personal bars to relief,’ respectively.

15. It is however to be noted that notwithstanding substitution

of Section 20 of the Act, the position of law on all material

aspects, such as the essential elements of readiness and

willingness and other aspects under the unamended Section 16

34
remains the same. In this regard, the decision of this Court in

Mehboob-Ur-Rehman (Dead) through LRs vs. Ahsanul Ghani

– [(2019) 19 SCC 415] may be referred to. In the said case, this

Court held that even following the amendment of the Specific

Relief Act, 1963, by way of Act No. 18 of 2018, the position of

law on all material aspects remains the same. It was observed

that, even following the amendment, the law was to the effect

that specific performance of a contract could not be granted or

enforced in favour to the person who fails to prove that he has

already performed or has always been ready and willing to

perform the essential terms of the contract which are to be

performed by him, other than the terms of which, the

performance has been prevented or waived by the other party.

16. Reference may also be had to the decision of this Court in

Sughar Singh vs. Hari Singh (Dead) through LRs and Ors.,

A.I.R. 2021 SC 5581. In the said case, the question as to

applicability of the unsubstituted provision of Section 20 of the

Act on transactions entered into prior to the date on which the

Amendment Act of 2018, was kept open. However, the Court

held that the provisions subsequently substituted, may act as a

guide to Courts in exercising discretion in matters dating prior

35
to the substitution, even though such provisions may not apply

retrospectively. The relevant observations of this Court have

been extracted as under:

“10. Now, so far as the finding recorded by

the High Court and the observations made
by the High court on Section 20 of the Act
and the observation that even if the
agreement is found to be duly executed and
the plaintiff is found to be ready and willing
to perform his part of the Agreement, grant
of decree of specific performance is not
automatic and it is a discretionary relief is
concerned, the same cannot be accepted
and/or approved. In such a case, many a
times it would be giving a premium to the
dishonest conduct on the part of the
defendant/executant of the agreement to
sell. Even the discretion under Section 20 of
the Act is required to be exercised
judiciously, soundly and reasonably. The
plaintiff cannot be punished by refusing the
relief of specific performance despite the fact
that the execution of the agreement to sell
in his favour has been established and
proved and that he is found to be always
ready and willing to perform his part of the
contract. Not to grant the decree of specific
performance despite the execution of the
agreement to sell is proved; part sale
consideration is proved and the plaintiff is
always ready and willing to perform his part
of the contract would encourage the
dishonesty. In such a situation, the balance
should tilt in favour of the plaintiff rather
than in favour of the defendant – executant
of the agreement to sell, while exercising the
discretion judiciously.

36
 For the aforesaid, even amendment to
the Specific Relief Act, 1963 by which
section 10(a) has been inserted, though may
not be applicable retrospectively but can be
a guide on the discretionary relief. Now the
legislature has also thought it to insert
Section 10(a) and now the specific
performance is no longer a discretionary
relief. As such the question whether the
said provision would be applicable
retrospectively or not and/or should be
made applicable to all pending proceedings
including appeals is kept open. However, at
the same time, as observed hereinabove, the
same can be a guide.”

(emphasis by me)

17. In B. Santoshamma vs. D. Sarala and Anr., (2020) 19

SCC 80 this Court, while examining the amendment made to

Section 10 of the Act observed that after the amendment to

Section 10, the words "specific performance of any contract may,

in the discretion of the Court, be enforced" have been substituted

with the words "specific performance of a contract shall be

enforced subject to the provisions contained in sub-section (2) of

Section 11, Section 14 and Section 16". It was concluded that

although the relief of specific performance of a contract is no

longer discretionary, after the amendment, the same would still

be subject to Section 11, Section 14 and Section 16 of the Act.

37
18. Applying the law discussed above to the facts of the

present dispute, I am of the view that even in the absence of

discretionary power under Section 20 to deny the relief of

specific performance, the plaintiff was not entitled to claim such

relief as a matter of right. The position of law, even following the

amendment of 2018 remains that the provisions of Section 16 of

the Act have to be mandatorily complied with by the party

seeking the relief of specific performance. The relief of specific

performance cannot be granted in favour of a party who has not

performed his obligations under the contract. It is therefore

necessary to ascertain whether, the plaintiff had complied with

the statutory prerequisites under Section 16 (c) of the Act, before

claiming the relief of specific performance. Section 16 of the Act

on being amended w.e.f. 01st October, 2018, reads as under:

“16. Personal bars to relief.—Specific

performance of a contract cannot be
enforced in favour of a person—

(a) who has obtained substituted

performance of contract under section
20; or

(b) who has become incapable of performing,

or violates any essential term of, the
contract that on his part remains to be
performed, or acts in fraud of the
contract, or wilfully acts at variance with,

38
 or in subversion of, the relation intended
to be established by the contract; or

(c) who fails to prove that he has performed

or has always been ready and willing to
perform the essential terms of the
contract which are to be performed by
him, other than terms of the performance
of which has been prevented or waived by
the defendant.

Explanation.—For the purposes of clause (c),

—

(i) where a contract involves the payment

of money, it is not essential for the
plaintiff to actually tender to the
defendant or to deposit in court any
money except when so directed by the
court;
(ii) the plaintiff must prove performance
of, or readiness and willingness to
perform, the contract according to its
true construction.”

19. Clause (c) of Section 16 of the Act, which is relevant in the

instant case, though amended w.e.f. 01st October, 2018 clearly

states that unless the plaintiff establishes his readiness and

willingness to perform his part of the contract, he would not be

entitled to a decree of specific performance. Prior to the

amendment, the expression “who fails to aver and prove” was on

the statute book and its substitution by the words “who fails to

39
prove” does not bring about any drastic change to the object and

intent of the clause. This is because failing to prove readiness

and willingness to perform the essential terms of the contract

would first require averments to that effect to be made in the

plaint by the plaintiff. The absence of such averments regarding

readiness and willingness to perform the essential terms of the

contract by the plaintiff would not permit him to let in any

evidence on that aspect. It is a settled principle of law that no

evidence can be permitted to be let in in the absence of

averments in the plaint / pleadings vide Bachhaj Nahar vs.

Nilima Mandal and Ors., (2008) 17 SCC 491. In the said case,

a Bench of this this Court speaking through Raveendran J. laid

down as follows:

(i) No amount of evidence can be looked into,

upon a plea which was never put forward in
the pleadings. A question which did not arise
from the pleadings and which was not the
subject matter of an issue, cannot be decided
by the Court.
(ii) A Court cannot make out a case not pleaded.
The Court should confine its decision to the
question raised in pleadings. Nor can it grant
a relief which is not claimed and which does
not flow from the facts and the cause of
action alleged in the plaint.

40
20. Therefore, notwithstanding the amendment to Section 16

of the Act whereby the expression “who fails to aver and prove”

has been substituted with the phrase “who fails to prove,” the

law remains that no evidence can be let in on a plea that was

never put forward in the plaint/pleadings. But, it is necessary to

sound a caveat. Even the absence of the words “ready and

willing to perform the contract” in the plaint would now not have

an adverse impact on the plaintiff’s case, so long as plaintiff’s

readiness and willingness to perform the essential terms of the

contract could be gathered on a holistic reading of the plaint.

21. In fact, even in relation to the earlier scheme of Section 16

of the Act which required a plaintiff seeking the remedy of

specific performance to ‘aver and prove’ that he was ready and

willing to perform his obligations under an agreement, this

Court had observed that it was sufficient if the averments in

substance indicate continuous readiness and willingness on the

part of the person suing, to perform his part of the contract vide

Motilal Jain vs. Ramdasi Devi, A.I.R. 2000 SC 2408. Further,

it had been declared that language in Section 16 (c), as it stood

prior to the Amendment Act of 2018, did not require any specific

phraseology to be followed in relation to the averments as to

41
readiness and willingness. That the compliance of requirements

of readiness and willingness have to be in spirt and substance

and not in letter and form vide Syed Dastagir vs. T.R.

Gopalakrishna Shetty, (1999) 6 SCC 337.

That is why the deletion of the words “who fails to aver” in

Section 16 (c) of the Act does bring about any real change in the

position of law as it stood prior to the amendment.

22. Further, readiness and willingness cannot be considered in

a straitjacket formula; it has to be inferred on a consideration of

the entire facts and circumstances of each case and the

intention and conduct of the parties concerned. Even if a party

to the contract is ready and has the requisite funds he may not

be willing to perform his part of the contract and vice versa.

23. In this regard, reference may be made to the decision of

this Court in His Holiness Acharya Swami Ganesh Dassji vs.

Sita Ram Thapar, (1996) 4 SCC 526 wherein this Court made

a distinction between ‘readiness’ and ‘willingness’ and the

manner in which the said parameters are to be scrutinised in

deciding a suit for specific performance. The relevant findings of

this Court are extracted as under:

42
 “2. There is a distinction between readiness
to perform the contract and willingness to
perform the contract. By readiness may be
meant the capacity of the plaintiff to perform
the contract which includes his financial
position to pay the purchase price. For
determining his willingness to perform his
part of the contract, the conduct has to be
properly scrutinised.
[xxx]
The factum of readiness and willingness to
perform plaintiffs part of the contract is to be
adjudged with reference to the conduct of the
party and the attending circumstances. The
court may infer from the facts and
circumstances whether the plaintiff was
ready and was always ready and willing to
perform his part of the contract. The facts of
this case would amply demonstrate that the
petitioner/plaintiff was not ready nor
capacity to perform his part of the contract
as he had no financial capacity to pay the
consideration in cash as contracted and
intended to bite for the time which disentitles
him as time is the essence of the contract.”

Thus, both readiness as well as willingness have to be

established by the plaintiff on whom the burden is cast in a suit

for specific performance of an agreement. Therefore, the question

would arise as to whether the plaintiff discharged such burden

in the instant case.

43
24. Further, in J.P. Builders vs. A. Ramdas Rao, (2011) 1

SCC 429, this Court held as under, as regards the onus on a

plaintiff claiming the relief of specific performance, to prove that

he had complied with Section 16 (c) of the Act and had

demonstrated ‘readiness’ and ‘willingness’ to carry out his

obligations under the agreement of sale:

“25. Section 16(c) of the Specific Relief Act,

1963 mandates "readiness and willingness" on
the part of the plaintiff and it is a condition
precedent for obtaining relief of grant of
specific performance. It is also clear that in a
suit for specific performance, the plaintiff
must allege and prove a continuous "readiness
and willingness" to perform the contract on
his part from the date of the contract. The
onus is on the plaintiff.
[xxx]
27. It is settled law that even in the absence of
specific plea by the opposite party, it is the
mandate of the statute that plaintiff has to
comply with Section 16(c) of the Specific Relief
Act and when there is non-compliance with
this statutory mandate, the Court is not
bound to grant specific performance and is left
with no other alternative but to dismiss the
suit. It is also clear that readiness to perform
must be established throughout the relevant
points of time. "Readiness and willingness" to
perform the part of the contract has to be
determined/ascertained from the conduct of
the parties.”

44
25. As per the agreement of sale of Kanam and Kuzhikoor

rights, dated 07th August, 2005, the plaintiff was obligated to

carry out the following terms:

(a) The plaintiff was obligated to measure the property at his own

expense;

(b) Prepare the deeds with respect to the plaint schedule property

in favour of himself or in favour of his nominees;

(c) The balance consideration was to be paid by the plaintiff to

the defendants within six months from the date of agreement.

The agreement also stipulated that the defendants were to:

(a) Handover the abovementioned deeds as also the anterior

documents, possession certification, tax receipt and

encumbrance certificate for the last thirteen years, purchase

certificate, either in their originals or certified copies to the

plaintiff;

(b) On receipt of the balance sale consideration execute the sale

deed in favour of the plaintiff within six months.

The relevant terms of the agreement are reproduced

hereinunder:

“The 1st Parties have decided to assign the

above property belonged and possessed by

45
 them to 2nd Party by fixing an amount of
Rs.8750/- (Eight Thousand Seven Hundred
and Fifty Only) for their rights of Kanam and
Kuzhikkoor rights over the property and the
2nd Party has agreed for the same and
accordingly the 1st Parties have received an
amount of Rs. 10,000/- (Ten Thousand Only)
from the 2nd Party towards advance for the
consideration amount. It has been decided
that the 2nd Party shall measure the property
on his expense, arrange the balance
consideration amount and prepare the deeds
pertaining to the above property in favour of
2nd party or in favour of the nominees of 2 nd
Party within 6 (six) months from today and the
1st Parties shall sign the deed prepared by the
2nd Party and register the same after obtaining
the balance consideration amount from 2 nd
Party and hand over actual possession of the
property to 2nd party. It is further decided that
the 1st party shall hand over the above
mentioned deeds and anterior documents,
possession certificate, tax receipt,
encumbrance certificate for the last 13 years,
purchase certificate, either in original or
certified copies, within the above said period
to 2nd Party.”

26. Nothing was brought on record by the plaintiff to

demonstrate that positive steps were taken by him in pursuance

of the agreement of sale of Kanam and Kuzhikoor rights. It is trite

that the relief of specific performance cannot be granted in favour

of a party who has not performed his obligations under the

contract. The only exception to such rule is that a party is not

46
required to perform those obligations, as are prevented or waived

by the other party to the contract.

27. In the present case, it is an admitted fact that the plaintiff

had paid an amount, which constituted merely 4% of the

consideration. The Trial Court itself recorded findings to the

effect that neither party had initiated timely steps to perform

their respective obligations under the contract. Although the

defendants did not make available the title deeds of the schedule

property to the plaintiff, it could not be said that the conduct of

the defendants had prevented the plaintiff from tendering the

balance sale consideration, within the stipulated date, or at any

time before filing the suit for specific performance as the whole

object of the intended sale was to garner funds for discharging a

debt which was ultimately done by the defendants by selling

family jewellery.

28. That paragraph 11 of the Trial Court’s judgment records a

finding to the effect that the defendants had applied for the

purchase certificate in the year 2005 itself, i.e., soon after

entering into the agreement of sale of Kanam and Kuzhikoor

rights. The same was obtained on 31st May, 2007. This fact would

47
suggest that there was no delay on the part of the defendant in

acting in pursuance of the agreement. The fact that the purchase

certificate was granted by the concerned authority only on 31st

May, 2007, was beyond the control of the defendants and such

delay could not be attributed to the defendants. The defendants

had duly initiated the process of obtaining a purchase certificate

soon after entering into the agreement.

29. While learned counsel for the appellant-plaintiff has

contended that since the transaction in question involved the

transfer of rights in immovable property, a prudent purchaser

would have to satisfy himself as to the genuineness and validity

of the documents of title, and therefore, owing to the non-

availability of documents of title, the plaintiff was unable to

proceed with his obligations, no explanation has been provided

as to why ancillary steps such as measurement of the property

was not proceeded with. Delay in securing relevant documents

from the concerned authorities could not absolve the plaintiff of

his obligations under the agreement of sale of Kanam and

Kuzhikoor rights. Further, this aspect of the matter is to be

appreciated in light of the fact that there is nothing on record

which would demonstrate any step taken by the plaintiff to

48
pursue the agreement, until, 02nd November, 2006, on which

date, the legal notice was served on the defendants calling upon

them to execute the sale deed in respect of the Kanam and

Kuzhikoor rights over the suit property. No explanation has been

provided as to why the legal notice was not served earlier,

particularly when the six-month period stipulated under the

agreement had expired on 7th February, 2006. Such conduct of

the plaintiff is certainly not reflective of willingness, in terms of

Section 16(c) of the Act.

30. Further, the Court has to be mindful of circumstances

which compelled the defendants to enter into the agreement of

sale of Kanam and Kuzhikoor rights dated 7th February, 2006.

The time limit stipulated in the agreement is of significance in the

instant case when this aspect is viewed in light of the fact that

the defendants were debt-ridden and sought to sell their Kanam

and Kuzhikoor rights over suit property with the sole intention of

clearing off such debts which were incurred to support the

cardiac treatment of defendant no. 1. It was therefore necessary

that the plaintiff paid a significant portion of the consideration, if

not the entire sale consideration, within the period of six months

49
as stipulated in the agreement. But the plaintiff refused to do so

even on being repeatedly requested by the defendants.

31. At this juncture, it may also be apposite to refer to the

decision of this Court in Saradamani Kandappan vs. S.

Rajalakshmi, (2011) 12 SCC 18 wherein this Court had an

occasion to consider the aspect of payment of a nominal advance

by the plaintiff and effect of the amount of advance paid on the

decision of the Court to grant the discretionary relief of specific

performance. This Court has authoritatively laid down that it

would amount to injustice to hold that a vendor who took a very

meagre sum as earnest money, and agreed that the rest of the

consideration would be paid within a stipulated period of time,

did not intend that time was of essence to the contract. The

relevant portion of the said judgment is usefully extracted as

under:

“37. The reality arising from this economic

change cannot continue to be ignored in
deciding cases relating to specific performance.
The steep increase in prices is a circumstance
which makes it inequitable to grant the relief of
specific performance where the purchaser does
not take steps to complete the sale within the
agreed period, and the vendor has not been
responsible for any delay or non-performance. A
purchaser can no longer take shelter under the
principle that time is not of essence in

50
 performance of contracts relating to immovable
property, to cover his delays, laches, breaches
and "non-readiness". The precedents from an
era, when high inflation was unknown, holding
that time is not of the essence of the contract in
regard to immovable properties, may no longer
apply, not because the principle laid down
therein is unsound or erroneous, but the
circumstances that existed when the said
principle was evolved, no longer exist. In these
days of galloping increases in prices of
immovable properties, to hold that a vendor who
took an earnest money of say about 10% of the
sale price and agreed for three months or four
months as the period for performance, did not
intend that time should be the essence, will be a
cruel joke on him, and will result in injustice.
Adding to the misery is the delay in disposal of
cases relating to specific performance, as suits
and appeals therefrom routinely take two to
three decades to attain finality. As a result, an
owner agreeing to sell a property for rupees one
lakh and received rupees ten thousand as
advance may be required to execute a sale deed
a quarter century later by receiving the
remaining rupees ninety thousand, when the
property value has risen to a crore of rupees.”
(emphasis by me)

32. Further, regarding the factors that ought to guide the

Court’s decision in decreeing a suit for specific performance,

particularly when the agreement of sale has not been given effect

to within the time stipulated therein, the following directions

issued in an earlier decision in K.S. Vidyanadam vs. Vairavan

(1997) 3 SCC 1, were reiterated:

51
 (i) The courts, while exercising discretion in
suits for specific performance, should bear
in mind that when the parties prescribe a
time/period, for taking certain steps or for
completion of the transaction, that must
have some significance and therefore
time/period prescribed cannot be ignored.
(ii) The courts will apply greater scrutiny and
strictness when considering whether the
purchaser was "ready and willing" to
perform his part of the contract.
(iii) Every suit for specific performance need not
be decreed merely because it is filed within
the period of limitation by ignoring the time-
limits stipulated in the agreement. The
courts will also "frown" upon suits which
are not filed immediately after the
breach/refusal. The fact that limitation is
three years does not mean that a purchaser
can wait for 1 or 2 years to file a suit and
obtain specific performance. The three-year
period is intended to assist the purchasers
in special cases, as for example, where the
major part of the consideration has been
paid to the vendor and possession has been
delivered in part- performance, where equity
shifts in favour of the purchaser.
(emphasis by me)

In light of the said directions, the period of six months

which was stipulated in the agreement of sale of Kanam and

Kuzhikoor rights, in the present case, has to be accorded its due

significance while deciding the suit for specific performance.

Having regard to the urgency of the financial need of the

defendants, which need had prompted them to sell their Kanam

52
and Kuzhikoor rights over the suit property, it must be held that

time stipulated in the agreement was the essence of the contract.

33. Further, the direction of this Court in the aforecited case

regarding the onus on the party claiming specific performance to

initiate action immediately after the breach or refusal by the

other party to the contract, is also relevant to the facts of the

present case. The plaintiff in the present case served a legal

notice only on 02nd November, 2006 while the six month period

stipulated in the agreement had elapsed on 07 th February, 2006.

There is no explanation as to what occasioned the delay in

serving the legal notice on the defendants and why such steps

were not adopted soon after the expiry of the six month period

stipulated in the agreement of sale of Kanam and Kuzhikoor

rights.

34. Therefore, it is held that the plaintiff, having paid no more

than 4% of the sale consideration, and having not done even as

much as getting the property measured within the period of six

months stipulated under the agreement, cannot, at a belated

date, claim specific performance of the agreement dated 7 th

53
August, 2005 to the disadvantage and hardship of the

defendants.

35. Learned counsel for the plaintiff has sought to rely on the

decision of this Court in Pratap Lakshman Muchandi and Ors.

vs. Shamlal Uddavadas Wadhwa and Ors., (2008) 1 SCC 67

wherein it was held that in cases where specific performance of a

contract is sought in relation to property, the market value of

which has increased since the date on which contract of sale of

Kanam and Kuzhikoor rights was entered into, it would be

justified to award an additional amount of consideration to the

seller, at the discretion of the Court. While I am mindful of the

fact that Courts may grant such a relief to balance equities, such

a decree would be warranted only in cases where the plaintiff

satisfactorily establishes compliance with Section 16 of the Act.

That the measure of enhancement of compensation may be

awarded at the discretion of the Court only if insufficiency of

compensation is the only impediment to ensuring equity and

preventing undue gain to one party. In the absence of compliance

with the elementary requirements of Section 16 of the Act,

enhancement of compensation cannot be employed as a device to

allow specific performance in cases where the plaintiff has not

54
performed his obligations under the contract as in the instant

case.

36. In my view, this appeal must fail on the sole ground that

the conduct of the plaintiff was not reflective of his readiness as

well as willingness on his part to pursue the agreement of sale of

Kanam and Kuzhikoor rights, in terms of Section 16(c) of the Act.

Accordingly, the present appeal is dismissed.

37. At this juncture, it is clarified that the result of this appeal

has been arrived at having regard to the conduct of the plaintiff,

which does not reflect his willingness to comply with the terms of

the agreement of sale dated 7th August, 2005. The suit for

specific performance of the agreement of sale of Kanam and

Kuzhikoor rights would fail on the sole ground that the plaintiff

has failed to comply with the essential requirements of Section

16(c) of the Act. Although it is acknowledged that the defendants

would be put through hardship if the suit for specific

performance was decreed in favour of the plaintiff, the appeal has

been decided dehors considerations of hardship to the

defendants, or of other circumstances under which the contract

was entered into which could give the plaintiff an unfair

55
advantage over the defendants, which are considerations in

equity as the relief of specific performance is essentially an

equitable remedy though crystalised in the form of a legislation

as per the Act. Thus, the appeal has not been decided in light of

Section 20 of the Act, as it stood prior to the Amendment Act of

2018. The question as to applicability of the provision of Section

20 of the Act as it stood prior to its amendment in 2018, on

transactions entered into prior to the date on which the

Amendment Act of 2018, is thus kept open.

38. The impugned judgment of the High Court of Kerala dated

03rd November, 2021 whereby the High Court set-aside the

judgment and decree passed by the Trial Court, i.e., the Court of

the Subordinate Judge, Tirur in O.S. No. 205/2006 (by which the

suit for specific performance of an agreement of sale of Kanam

and Kuzhikoor rights, filed by the plaintiff was decreed), is

affirmed. This appeal is dismissed.

Parties are directed to bear their respective costs.

.................................J.
[B.V. NAGARATHNA]

56
NEW DELHI;
13 JANUARY, 2023.

57