Specific Performance of Contracts and Equitable Discretion under the Specific Relief Act, 1963 (CaseLaws)

R. Kandasamy (Since Dead) & Ors. Vs. T.R.K. Sarawathy & Anr. (2024 INSC 884)

Summary of the CaseLaws
The Supreme Court of India addressed a dispute concerning a suit for specific performance of an Agreement for Sale of a property. The key legal issues involved were:

Time as the Essence of the Contract – Whether the stipulation in the agreement that the balance sale consideration had to be paid within four months made "time the essence of the contract," especially when the sellers also had a concurrent obligation to vacate the tenants.

Readiness and Willingness of the Plaintiff – Whether the plaintiff (buyer) had continuously demonstrated, through her conduct and financial capacity, a genuine readiness and willingness to perform her essential obligations under the contract, as mandated by Section 16(c) of the Specific Relief Act, 1963.

Maintainability of the Suit – Whether a suit for specific performance is maintainable without a specific prayer for a declaration that the seller's unilateral termination/cancellation of the agreement is bad in law.

Exercise of Discretionary Relief – Whether, in the facts and circumstances of the case, the discretionary and equitable relief of specific performance should be granted to the plaintiff.

The Court held that:
The High Court erred in granting the decree for specific performance. The Supreme Court set aside the High Court's judgment and restored the Trial Court's decree dismissing the suit. The Court found that while time was not the essence of the contract in this particular case, the buyer had failed to prove her continuous readiness and willingness to perform her part of the contract. Her conduct, including raising untenable demands, failing to act on multiple opportunities, and lacking demonstrable financial capacity, disentitled her to the equitable relief of specific performance. The buyer was, however, held entitled to a refund of the advance sum of Rs. 25 lakh.

Key Legal Principles Established:
Burden of Proof for Readiness and Willingness – The plaintiff must specifically plead and prove continuous readiness and willingness, which includes demonstrating the availability of funds or the financial capacity to pay the balance sale consideration. Mere averments are insufficient without corroborative evidence.

Conduct is Paramount in Equitable Relief – The grant of specific performance is a discretionary and equitable remedy. The court must scrutinize the conduct of the plaintiff prior to and subsequent to the filing of the suit. Conduct that demonstrates reluctance, delay, or a lack of good faith can be a ground for refusing the relief.

Interpretation of Concurrent Obligations – Where a contract contains concurrent obligations (e.g., buyer to pay within a timeframe, seller to vacate tenants), the clauses must be read together. The obligation to pay may be qualified by the seller's failure to fulfil their reciprocal promise, but this does not absolve the buyer from demonstrating their own readiness once the seller's obligation is fulfilled.

Jurisdictional Fact and Appellate Review – Even if a specific issue on maintainability is not framed by the Trial Court, a higher court is not precluded from examining a "jurisdictional fact" (like the existence of a valid and enforceable agreement post-termination) if it goes to the root of the court's authority to grant the relief.

Relevance:
This judgment serves as a significant precedent reinforcing the rigorous standards a plaintiff must meet to obtain specific performance. It underscores that the doctrine of "time not being the essence" in immovable property contracts is not a blanket immunity for a dilatory purchaser. Courts will apply strict scrutiny to the plaintiff's conduct and financial readiness, emphasizing that equitable relief is meant for those who approach the court with clean hands and demonstrable intent to perform their obligations.