P. DAIVASIGAMANI versus S. SAMBANDAN on 12 October 2022

[2022] 18 S.C.R. 199

P. DAIVASIGAMANI

v.

S. SAMBANDAN

(Civil Appeal No. 9006 of 2011)

OCTOBER 12, 2022

[SANJIV KHANNA AND BELA M. TRIVEDI, JJ.]

Specific Relief Act, 1963 – Ss. 10, 16 & 20 – Agreement tosell – default to perform contract – readiness and willingness –delay in filing of suit – Appellant entered into an agreement to salewith the respondent in the year 1989 with a stipulation for completionof the sale transaction in 6 months – Despite respondent’s periodicalcorrespondences, appellant failed to respond or perform his partof the contract – Respondent filed a suit for specific performancebefore the trial court – Trial court allowed the suit partly, allowingrecovery of earnest money and refusing specific performance inview of the finding that the respondent could not prove readinessand willingness as at the time of filing of suit, respondent did notdeposit the balance sale consideration amount in the court–Respondent appealed before High Court – High Court reversed theorder of the trial court and allowed the appeal, thereby grantingthe relief of specific performance to the respondent – On appeal,held: The period of limitation had started running from the date therespondent noticed that the performance was refused by the appellantand not from the date of execution of agreement in question – Thesuit was filed by the respondent was well within the prescribed timeu/Art.54 of the Limitation Act – Mere delay alone in filing the suitfor specific performance, without reference to the conduct of theplaintiff, could not be a ground for refusing the said relief, whenthe suit was filed within the statutory time limit by the respondent-plaintiff – Respondent-plaintiff had not only issued notices withinthe period of six months of the agreement in question, callingdefendant to perform his part of contract and conclude sale, hehad also showed his readiness and willingness to perform the hispart of contract by proving same by stepping into witness box –

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AThere was due compliance of s. 16(c) read with its explanation onpart of the respondent to perform – No illegality or infirmity in thejudgment of the High Court.

Delay/Laches – Limitation - There is a distinction betweenlimitation and delay and laches – Limitation is a ground forBdismissing a suit even if the plaintiff is otherwise entitled to specificperformance, while delay operates to determine the discretion andexercise under Section 20 of the Specific Relief Act, even if the suitis not dismissed on account of limitation – However, not one butseveral aspects have to be considered when the court, in terms ofsection 20 of the Specific Relief Act, exercises discretion, guided byCjudicial principles, sound and reasonable.

Dismissing the appeal, the Court

Conclusion

Dismissing the appeal, the Court

HELD: 1.1 The period of limitation had started runningfrom the date the respondent noticed that the performance wasDrefused by the appellant and not from the date of the execution ofagreement in question. Even though time is not considered asthe essence of the contract in case of immoveable property andthat the suit could be filed within three years as provided in Article54 of the Limitation Act, the respondent - plaintiff had to performhis part of the contract within the reasonable time having regardEto the term of the agreement prescribing the time limit. The timelimit prescribed in the agreement cannot be ignored on the groundthat time was not made the essence of the agreement or that thesuit could be filed within three years from the date fixed forperformance or from the date when the performance is refusedFby the vendor. The suit having been filed by the respondent wellwithin the prescribed time limit under Article 54 of the LimitationAct, the respondent could not have been non-suited on the groundof the suit being barred by limitation. As regards, the delay infiling the suit, it is very pertinent to note that the rule of equitythat exists in England, does not apply in India, and so long as aGsuit for specific performance is filed within the period of limitation,delay cannot be a ground to refuse the relief of specificperformance to the plaintiff. Mere delay alone in filing the suitfor specific performance, without reference to the conduct of theplaintiff, could not be a ground for refusing the said relief, whenH

the suit was filed within the statutory time limit by the respondent-plaintiff. [Paras 9, 10, 11 & 12][208-C-G; 209-E]

1.2 Readiness and willingness are not one, but two separateelements. Readiness means the capacity of the plaintiff to performthe contract, which would include the financial position to pay thepurchase price. Willingness refers to the intention of the plaintiffas a purchaser to perform his part of the contract. Willingness isinferred by scrutinising the conduct of the plaintiff/purchaser,including attending circumstances. Continuous readiness andwillingness on the part of the plaintiff/purchaser from the datethe balance sale consideration was payable in terms of theagreement to sell, till the decision of the suit, is a conditionprecedent for grant of relief of specific performance.[Para 15][212-G, 213-A]

1.3 Section 20 of the Specific Relief Act (Pre-amendment),which confers discretion on the court to exercise jurisdiction todecree of specific performance, states that this exercise shouldnot be arbitrary, but guided by sound and reasonable judicialprinciples. Sub-section (2) to Section 20 of the Specific ReliefAct (Pre-amendment) lists some of the principles that the courtshould take into consideration while exercising discretion.[Para 19][215-C-D; 216-G]

1.4 Time, it is stated, is not the essence of the contract inthe case of immovable properties, unless there are grounds tohold to the contrary. This doctrine is applied, without being unfairand inequitable to the defendant/seller, as the court should notignore that a person sells the property when he needs money,and, therefore, expects the money in the stipulated or reasonabletime, which would meet the purpose of the sale. There has beena steep rise in the prices of land in the last quarter of the 20thCentury in India. With the rise in property value, the value ofmoney has fallen. At times, delay in payment would defeat thedefendant/seller’s purpose. Therefore, the offer of the plaintiff/purchaser in writing and the time and occasion when the offer topay the balance amount to the defendant/seller is an importantfactor which would matter when the court examines the questionof discretion, that is, whether or not to grant a decree of specific AB

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Aperformance. While examining these aspects, the quantum ofmoney paid by the plaintiff/seller to the defendant/purchaser maybecome a relevant fact that merits due consideration. There is adistinction between limitation and delay and laches. Limitationis a ground for dismissing a suit even if the plaintiff is otherwiseentitled to specific performance, while delay operates toBdetermine the discretion and exercise under Section 20 of theSpecific Relief Act, even if the suit is not dismissed on account oflimitation. However, not one but several aspects have to beconsidered when the court, in terms of Section 20 of the SpecificRelief Act, exercises discretion, guided by judicial principles,Csound and reasonable. [Para 20][217-G; 218-A-D]

1.5 There was due compliance of Section 16(c) read withits Explanation on the part of the respondent and that it was theappellant who had failed to perform as per the terms of theagreement, though called upon by the respondent to perform.DThe High Court also had rightly held that the plaintiff had compliedwith the requirements of Section 16(c) of the said Act by makinga specific pleading with regard to his readiness and willingnessand also proving the same by reliable evidence. There is noillegality or infirmity in the impugned judgment passed bythe High Court. Therefore, the same is confirmed. [Para 22]E[219-C-D]

1.6 The agreement in question was entered into betweenthe parties in October 1989, and considering the steep rise inthe prices of land, interest of justice would be met if the respondentis directed to pay some more amount. Respondent is directed toFdeposit a sum of Rupees One Crore in the Trial Court towardsthe sale consideration, over and above the amount that mighthave been deposited by him. On such deposit being made, theappellant shall execute the sale deed in favour of the respondentand shall also be at liberty to withdraw the said amount depositedGby the respondent. [Para 23][219-F-H; 220-A]

Mademsetty Satyanarayana vs. G. Yelloji Rao AIR 1965SC 1405 : [1965] SCR 221; R. Lakshmikantham V.Devaraji (2019) 8 SCC 62 : [2019] 9 SCR 1009; Smt.Katta Sujatha Reddy v. Siddamsetty Infra Projects Ltd., H

P. DAIVASIGAMANI v. S. SAMBANDAN

Civil Appeal No. 5822 of 2022; Syed Dastagir vs. T.R.Gopalakrishna Setty (1999) 6 SCC 337 : [1999] 1Suppl. SCR 351; Sukhbir Singh v. Brij Pal Singh (1997)2 SCC 200 : [1996] 2 Suppl. SCR 863; A. Kanthamaniv. Nasreen Ahmed (2017) 4 SCC 654 : [2017] 2 SCR610; C.S. Venkatesh v. A.S.C. Murthy (2020) 3 SCC280 : [2020] 2 SCR 676; Kamal Kumar v. PremlataJoshi and Others (2019) 3 SCC 704 : [2019] 1 SCR54; K.S. Vidyanadam and Others v. Vairavan (1997) 3SCC 1 : [1997] 1 SCR 993; Saradamani Kandappanv. S. Rajalakshmi and Others (2011) 12 SCC 18 : [2011]8 SCR 874; Ritu Saxena vs. J.S. Grover & Another(2019) 9 SCC 132 : [2019] 13 SCR 349; AbdullakoyaHaji Vs. Rubis Tharayil (2019) 17 SCC 216 – referredto.

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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9006of 2011.

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From the Judgment and Decree dated 15.06.2010 of the HighCourt of Judicature at Madras in Appeal Suit No.196 of 2002.

AAnupamlal Das, Sr. Adv., S. Hariharan, Anirudh Singh, Ms. JaikritiS. Jadeja, Ms. Prapti Allagh, Vikash Singh, Advs. for the Appellant.

Basava Prabhu S. Patil, Sr. Adv., Ms. Promila, Geet Rajan Ahuja,S. Thananjayan, Advs. for the Respondent.

The Judgment of the Court was delivered byB

BELA M. TRIVEDI, J.

1. The present appeal is directed against the judgment and orderdated 15.06.2010 passed by the High Court of Judicature at Madras inAppeal Suit No. 196 of 2002, whereby the High Court has allowed theCsaid appeal, modified the decree passed by the Subordinate Judge,Poonamallee (hereinafter referred to as the “Trial Court”) in O.S. 212of 1993, and decreed the said suit by granting the prayer for specificperformance and also for permanent injunction against the presentappellant (original defendant) in respect of the suit property.

D2. The respondent (original plaintiff) had filed the suit in the TrialCourt seeking specific performance of an agreement for sale dated05.10.1989, against the appellant (original defendant) and had prayed inthe alternative for refund of the earnest (advance) money with interest,and also for the compensation. The respondent had also prayed forpermanent injunction restraining the appellant – defendant from alienatingEor transferring the suit property to any third party. The Trial Court partlydecreed the suit granting prayer for refund of the earnest money withinterest at the rate of 12% per annum and dismissed the suit so far asother prayers were concerned, vide the judgment and decree dated28.06.2002.F3. The short facts given rise to the present appeal are that the F3. The short facts given rise to the present appeal are that theappellant Mr. P. Daivasigamani was the owner of the suit land i.e., theland to an extent of 1 acre out of 1.80 acre of wetland comprised insurvey nos. 287 and 288, situated in No. 85 Ayanambakkam, DistrictAmbattur. He had entered into an agreement to sell the suit land withthe respondent Shri S. Sambandan on 05.10.1989. The appellant hadGagreed to sell the said land for a sum of Rs. 6,50,000/-. On thedate of execution of the agreement, the respondent had paid a sum ofRs. 50,000/- by way of earnest money as part of sale consideration. Thetime for completion of sale transaction was stipulated to be 6 months inthe said agreement. As per the case of the respondent, though he had H

periodically contacted the appellant requesting him to execute the saledeed, and had shown his readiness and willingness to perform his part ofthe contract, the appellant failed to respond or to perform his part of thecontract. The respondent thereafter vide the letter dated 17.03.1990sent by registered post, called upon the appellant to execute a deed ofpower of attorney and to conclude the said transaction, however therewas no response from the appellant to the said letter. The respondentthereafter again sent a notice through his lawyer on 26.03.1990, to theappellant which was returned with an endorsement “refused”. Therespondent thereafter caused a public notice published in the Tamil daily“Dhina Thanthi” on 02.05.1990 and in English daily “Indian Express” on06.05.1990, informing the public at large not to enter into any saletransaction with the appellant in respect of the suit property. Despite thesaid efforts having been made by the respondent, the appellant failed tofulfill his obligation under the agreement. The respondent-plaintiffthereafter filed the suit seeking specific performance of the saidagreement.

4. The suit was contested by the appellant-defendant by filing thewritten statement. The appellant while admitting the execution of theagreement in question had denied the receipt of Rs. 50,000/- as contendedby the respondent. The appellant also denied the readiness and willingnesson the part of the respondent to perform his part of the contract. Theappellant also denied to have received the letter dated 17.03.1990 sentby the respondent by registered post and also the notice dated 26.03.1990sent by the respondent through his lawyer.

5. The Trial Court had framed as many as seven issues, pursuantto which the respondent-plaintiff examined himself as PW-1 and adducedthe documents at Ex. A1 to A7. The appellant-defendant also examinedhimself as DW-1, however had not adduced any documentary evidence.The Trial Court partly decreed the suit as stated hereinabove by observing,inter alia, that though the plaintiff had paid Rs. 50,000/- by way ofearnest money/advance money to the defendant, the plaintiff had notdeposited the balance sale consideration of Rs. 6,00,000/- in the court atthe time of filing of the suit, and that the plaintiff had also not proved thathe had got adequate financial strength to pay the balance saleconsideration of Rs. 6,00,000/- to the defendant within the time stipulatedin the sale agreement. The Trial Court, therefore, came to the conclusionthat the plaintiff had failed to prove his readiness and willingness to A

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Aperform his part of the agreement, and therefore was not entitled to thedecree for specific performance of the agreement, however he wasentitled to recover from the defendant the amount of Rs. 50,000/- paidby way of advance, together with interest at the rate of 12% per annumfrom the date of sale agreement till the date of realization.

B6. The High Court in the appeal, decreed the suit of the respondent-plaintiff vide the impugned order, observing as under:

“26. As the appellant/plaintiff has made clearaverments to the effect that he was and has beenready and willing to pay the balanceCconsideration and get the sale deed registeredat his cost, there cannot be any inferenceagainst the readiness and willingness, especiallyin the absence of evidence adduced by therespondent/defendant to the effect that any callmade by the respondent/defendant forDaccepting performance was not responded bythe appellant/plaintiff. Therefore, this Courtcomes to the conclusion that the finding of theCourt below to the effect that the appellant/plaintiff had not proved his continued readinessEand willingness to perform his part of theobligations under the agreement is not basedon sound reasoning and in fact it is perversefinding, which deserves interference by thisCourt. Accordingly, the said finding of the trialcourt regarding Issue No. 4 framed in the suitFis set aside and reversed. It is hereby held thatthe appellant/plaintiff has complied with therequirements of Section 16(c) of the SpecificRelief Act by making a specific pleadingregarding his readiness and willingness andGproving the same by reliable evidence.”

7. While raising multiple contentions, the learned counsel appearingfor the appellant submitted that the suit having been filed by therespondent – plaintiff after three years of the execution of the agreement,it was barred by the Law of Limitation. Even otherwise, the time beingHthe essence of the contract, and the respondent having failed to perform the essential terms of the contract within the time limit stipulated in theagreement, the High Court had committed a gross error in granting thediscretionary relief of the specific performance in favour of therespondent. According to him, there was no explanation given by therespondent for the delay occurred in filing the suit. He further submittedthat as per the legal position settled by this Court, the respondent wasnot only required to aver in the pleading but was also required to proveby cogent evidence like producing statement of his bank account orother document that he was financially capable of making payment ofthe balance amount of sale consideration, which the respondent-plaintiffhad failed to prove. The respondent had also failed to deposit the remainingamount of sale consideration in the court at the time of filing the suit.

8. Per contra, the learned counsel appearing for the respondentsubmitted that time is never considered to be an essence of the contractin case of immoveable property, and even otherwise the respondent hadshown his readiness and willingness to perform the essential terms, namelycalling upon the appellant to execute a power of attorney and completethe sale transaction, by issuing three notices one after the other, withinthe stipulated time limit, however, the appellant had failed to respond thesaid notices and had also failed to execute the sale deed in favour of therespondent. According to him, there was no requirement of law to depositthe balance of the amount of sale consideration, at the time of filing ofthe suit, as sought to be submitted by the learned counsel for the appellant.

9. Now, adverting to the first contention raised by the learnedcounsel for the appellant that the respondent – plaintiff having filed thesuit for specific performance of the agreement after the expiry of threeyears of the agreement, it may be noted that as per Article 54 of theLimitation Act, 1963, the suit for the specific performance of contractcould be filed within three years from the date fixed for the performance,or when no such date has been fixed, from the date when the plaintiffhas noticed that performance is refused. In the instant case, the executionof the agreement on 05.10.1989 has not been disputed. It was also provedby the respondent by leading the evidence that the respondent had senta notice dated 17.03.1990 by registered post and called upon the appellantto execute the power of attorney and to conclude the sale transaction inview of Clause 10 of the agreement. However, there was no responsefrom the appellant to the said letter. The respondent thereafter had A

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Aagain sent a notice through his lawyer on 26.03.1990, which had comeback with the endorsement “refused”. Thereafter, again the respondentcaused a public notice published in the Tamil daily “Dhina Thanthti” on02.05.1990 and in the English daily “Indian Express” on 06.05.1990.The appellant having not responded to any of the said notices, the suitwas filed on 26.03.1993. Since the sale had to be completed within aBperiod of six months from the date of the execution of the agreementdated 05.10.1989, the respondent had called upon the appellant to performhis part of the contract by issuing the notices within six months of thesaid agreement. However, the appellant having failed to respond to anyof the said notices, it was deemed that the appellant had refused toCperform his part of contract. The period of limitation had started runningfrom the date the respondent noticed that the performance was refusedby the appellant and not from the date of the execution of agreement inquestion.

10. It cannot be gainsaid said that even though time is notDconsidered as the essence of the contract in case of immoveable propertyand that the suit could be filed within three years as provided in Article54 of the Limitation Act, the respondent - plaintiff had to perform hispart of the contract within the reasonable time having regard to the termof the agreement prescribing the time limit. The time limit prescribed inthe agreement cannot be ignored on the ground that time was not madeEthe essence of the agreement or that the suit could be filed within threeyears from the date fixed for performance or from the date when theperformance is refused by the vendor. Nonetheless, as discussed above,the suit having been filed by the respondent well within the prescribedtime limit under Article 54 of the Limitation Act, the respondent could Fnot have been non-suited on the ground of the suit being barred by limitationas sought to be submitted by learned counsel for the appellant.

11. As regards, the delay in filing the suit, it is very pertinent tonote that the rule of equity that exists in England, does not apply in India,and so long as a suit for specific performance is filed within the period ofGlimitation, delay cannot be a ground to refuse the relief of specificperformance to the plaintiff. In Mademsetty Satyanarayana vs. G.Yelloji Rao AIR 1965 SC 1405 it has been observed as under:

“7. Mr Lakshmaiah cited a long catena ofEnglish decisions to define the scope of a court’s discretion. Before referring to them,it is necessary to know the fundamentaldifference between the two systems—Englishand Indian—qua the relief of specificperformance. In England the relief of specificperformance pertains to the domain of equity;in India, to that of statutory law. In Englandthere is no period of limitation for instituting asuit for the said relief and, therefore, meredelay — the time lag depending uponcircumstances — may itself be sufficient torefuse the relief; but, in India mere delaycannot be a ground for refusing the said relief,for the statute prescribes the period oflimitation. If the suit is in time, delay issanctioned by law; it is beyond time, the suitwill be dismissed as barred by time; in eithercase, no question of equity arises.”

12. The aforesaid ratio has also been followed recently by thisCourt in R. Lakshmikantham V. Devaraji (2019) 8 SCC 62. We,therefore, have no hesitation in holding that mere delay alone in filing thesuit for specific performance, without reference to the conduct of theplaintiff, could not be a ground for refusing the said relief, when the suitwas filed within the statutory time limit by the respondent- plaintiff.

13. This takes us to the next question as to whether the HighCourt was justified in granting the relief of specific performance in favourof the respondent – plaintiff? Now, before answering the said question,it may be noted that some of the relevant provisions contained in theSpecific Relief Act, 1963 (hereinafter referred to as the “Said Act”)have undergone a substantive change by way of amendments made bythe Act 18 of 2018, which came into force with effect from 01.10.2018.As per the recent decision of the three-judge bench of this Court, incase of Smt. Katta Sujatha Reddy v. Siddamsetty Infra Projects Ltd.,Civil Appeal No. 5822 of 2022 decided on 25[th] August, 2022, the saidAct 18/2018 amending the Specific Relief Act is prospective in natureand cannot apply to those transactions that took place prior to its cominginto force. In the instant case, the subject agreement having taken placeprior to the said Amendment, we will have to take into consideration the AB

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Alegal position as it stood prior to the 2018 amendment. The relevantprovisions contained in Section 10, Section 16 and Section 20 as theystood prior to the amendment are reproduced for ready reference.

“Section 10. - Cases in which specific performanceof contract enforceable –

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Except as otherwise provided in this Chapter,the specific performance of any contract may, inthe discretion of the court, be enforced - (a) when there exists no standard for ascertainingactual damage caused by the non-performance ofCthe act agreed to be done; or (b) when the act agreed to be done is such thatcompensation in money for its non-performancewould not afford adequate relief.

DExplanation - Unless and until the contrary isproved, the court shall presume -

(i) that the breach of a contract to transferimmovable property cannot be adequatelyrelieved by compensation in money; and

(ii) xxx xxx xxx xxx

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Section 16– Personal bars to relief –

Specific performance of a contract cannot beenforced in favour of a person - (a) xxx xxx xxx xxx xxx F

(b) xxx xxx xxx xxx xxx

(c) who fails to aver and prove thathe has performed or has alwaysbeen ready and willing to performthe essential terms of the contractwhich are to be performed by him,other than terms the performanceof which has been prevented orwaived by the defendant.

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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 tenderto the defendant or to deposit in court any moneyexcept when so directed by the court;

(ii) the plaintiff must aver performance of, orreadiness and willingness to perform, the contractaccording to its true construction.

Section 20 - Discretion as to decreeing specificperformance.—

(1) The jurisdiction to decree specific performance isdiscretionary, and the court is not bound to grant such reliefmerely because it is lawful to do so; but the discretion ofthe court is not arbitrary but sound and reasonable, guidedby judicial principles and capable of correction by a court ofappeal.

(2) The following are cases in which the court may properlyexercise discretion not to decree specific performance:—

(a) where the terms of the contract or the conduct of theparties at the time of entering into the contract or theother circumstances under which the contract wasentered into are such that the contract, though notvoidable, gives the plaintiff an unfair advantage over thedefendant; or (b) where the performance of the contract would involvesome hardship on the defendant which he did not foresee,whereas its non-performance would involve no suchhardship on the plaintiff; or

(c) where the defendant entered into the contract undercircumstances which though not rendering the contractvoidable, makes it inequitable to enforce specificperformance.

Explanation 1. Mere inadequacy of consideration,or the mere fact that the contract is onerous to thedefendant or improvident in its nature, shall not be A

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Adeemed to constitute an unfair advantage within themeaning of clause (a) or hardship within themeaning of clause (b).

Explanation 2. The question whether the performance of acontract would involve hardship on the defendant withinBthe meaning of clause (b) shall, except in cases where thehardship has resulted from any act of the plaintiffsubsequent to the contract, be determined with referenceto the circumstances existing at the time of the contract.

(3) The court may properly exercise discretion to decreeCspecific performance in any case where the plaintiff has donesubstantial acts or suffered losses in consequence of acontract capable of specific performance.

(4) The court shall not refuse to any party specificperformance of a contract merely on the ground that theDcontract is not enforceable at the instance of the party”.

14. From the bare reading of the afore-stated provisions, it clearlyemerges that the Specific Performance of the contract, may in thediscretion of the court, be enforced, when the act agreed to be done,was such that compensation in money for its non-performance wouldEnot afford adequate relief, and that the breach of a contract to transferimmoveable property could not be adequately relieved by compensationin money. It also emerges that specific performance of a contract couldnot be enforced in favour of a person, who failed to aver and prove thathe had performed or had always been ready and willing to perform theessential terms of the contract, which were to be performed by him. ItFcould also not be enforced in favour of a person who failed to aver in theplaint the performance of, or readiness and willingness to perform thecontract according to its true construction.

15. Readiness and willingness are not one, but two separateelements. Readiness means the capacity of the plaintiff to perform theGcontract, which would include the financial position to pay the purchaseprice. Willingness refers to the intention of the plaintiff as a purchaserto perform his part of the contract. Willingness is inferred by scrutinisingthe conduct of the plaintiff/purchaser, including attending circumstances[1].

1 See paragraph 2 in His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar,H(1996) 4 SCC 526

Continuous readiness and willingness on the part of the plaintiff/purchaserfrom the date the balance sale consideration was payable in terms of theagreement to sell, till the decision of the suit, is a condition precedent forgrant of relief of specific performance[2]

16. The expression “readiness and willingness” used in Section16 (c) of the said Act, has been interpreted in catena of decisions by thisCourt, in the light of facts and circumstances of the cases underconsideration for the purpose of granting or refusing to grant the reliefof Specific Performance of a contract. The said expression cannot beinterpreted in a straitjacket formula. In a very apt decision of this Courtin case of Syed Dastagir vs. T.R. Gopalakrishna Setty (1999) 6SCC 337, a three-Judge Bench of this Court, construing a plea of“readiness and willingness to perform” in view of the requirement ofSection 16(c) and its explanation, observed as under:

“9. So the whole gamut of the issue raised is,how to construe a plea specially with referenceto Section 16(c) and what are the obligationswhich the plaintiff has to comply with in referenceto his plea and whether the plea of the plaintiffcould not be construed to conform to therequirement of the aforesaid section, or doesthis section require specific words to be pleadedthat he has performed or has always been readyand is willing to perform his part of the contract.In construing a plea in any pleading, courts mustkeep in mind that a plea is not an expression ofart and science but an expression through wordsto place fact and law of one’s case for a relief.Such an expression may be pointed, precise,sometimes vague but still it could be gatheredwhat he wants to convey through only by readingthe whole pleading, depending on the persondrafting a plea. In India most of the pleas aredrafted by counsel hence the aforesaiddifference of pleas which inevitably differ fromone to the other. Thus, to gather true spirit 2 See paragraph 5 in N.P. Thirugnanam(dead) by LRs v Dr. R. Jagan Mohan Rao andOthers, (1995) 5 SCC 115. Also see Ardeshir H. Mama v. Flora Sassoon, AIR 1928 PC208.

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behind a plea it should be read as a whole. Thisdoes not distract one from performing hisobligations as required under a statute. But totest whether he has performed his obligations,one has to see the pith and substance of a plea.Where a statute requires any fact to be pleadedthen that has to be pleaded maybe in any form.The same plea may be stated by differentpersons through different words; then howcould it be constricted to be only in anyparticular nomenclature or word. Unless astatute specifically requires a plea to be in anyparticular form, it can be in any form. No specificphraseology or language is required to take sucha plea. The language in Section 16(c) does notrequire any specific phraseology but only thatthe plaintiff must aver that he has performed orhas always been and is willing to perform hispart of the contract. So the compliance of“readiness and willingness” has to be in spiritand substance and not in letter and form. So toinsist for a mechanical production of the exactwords of a statute is to insist for the form ratherthan the essence. So the absence of form cannotdissolve an essence if already pleaded”.

17. It was further observed therein that:

17. It was further observed therein that:

“It is significant that this explanation carves outa contract which involves payment of money asa separate class from Section 16(c). Explanation(i) uses the words “it is not essential for theplaintiff to actually tender to the defendant orto deposit in court any money except when sodirected by the court”. (emphasis supplied) Thisspeaks in a negative term what is notessential for the plaintiff to do. This is more insupport of the plaintiff that he need not tenderto the defendant or deposit in court any moneybut the plaintiff must [as per Explanation (ii)] at

P. DAIVASIGAMANI v. S. SAMBANDAN[BELA M. TRIVEDI, J.]

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least aver his performance or readiness andwillingness to perform his part of the contract”.

18. In Sukhbir Singh v. Brij Pal Singh[3]this Court had laid downthat Law is not in doubt and it is not a condition that the respondents(Plaintiffs) should have ready cash with them. It is sufficient for therespondents to establish that they had the capacity to pay the saleconsideration. It is not necessary that they should always carry the moneywith them from the date of the suit till the date of the decree. The saidprinciple was followed in case of A. Kanthamani v. Nasreen Ahmed[4],in case of C.S. Venkatesh v. A.S.C. Murthy[5]etc.

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19. Section 20 of the Specific Relief Act (Pre-amendment), whichconfers discretion on the court to exercise jurisdiction to decree of specificperformance, states that this exercise should not be arbitrary, but guidedby sound and reasonable judicial principles. Interpreting and elucidatingon Section 20 of the Specific Relief Act (Pre-amendment) and factorsto be considered, this Court in Kamal Kumar v. Premlata Joshi andOthers[6]has also referred to Sections 16(c), 22, 23 and 24 of the SpecificRelief Act and forms 47/48 of Appendix A to C of the Code of CivilProcedure, 1908, to summarise:

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“7. It is a settled principle of law that the grantof relief of specific performance is aEdiscretionary and equitable relief. The materialquestions, which are required to be gone intofor grant of the relief of specific performanceare:

7.1 First, whether there exists a valid andconcluded contract between the parties for sale/Fpurchase of the suit property;7.2 Second, whether the plaintiff has been readyand willing to perform his part of contract andwhether he is still ready and willing to performhis part as mentioned in the contract;G

7.2 Second, whether the plaintiff has been readyand willing to perform his part of contract andwhether he is still ready and willing to performhis part as mentioned in the contract; 3 (1997) 2 SCC 200

4 (2017) 4 SCC 654

5 (2020) 3 SCC 280

6 (2019) 3 SCC 704

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7.3 Third, whether the plaintiff has, in fact,performed his part of the contract and, if so,how and to what extent and in what manner hehas performed and whether such performancewas in conformity with the terms of the contract; 7.4 Fourth, whether it will be equitable to grantthe relief of specific performance to the plaintiffagainst the defendant in relation to suit propertyor it will cause any kind of hardship to thedefendant and, if so, how and in what mannerand the extent if such relief is eventuallygranted to the plaintiff; B

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7.5 Lastly, whether the plaintiff is entitled forgrant of any other alternative relief, namely,refund of earnest money etc. and, if so, on whatgrounds.

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8. In our opinion, the aforementioned questionsare part of the statutory requirements [SeeSections 16 (c), 20, 21, 22, 23 of the SpecificRelief Act, 1963 and the Forms 47/48 ofAppendix A to C of the Code of Civil Procedure].These requirements have to be properlypleaded by the parties in their respectivepleadings and proved with the aid of evidencein accordance with law. It is only then the Courtis entitled to exercise its discretion andaccordingly grant or refuse the relief of specificperformance depending upon the case made outby the parties on facts.”

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Sub-section (2) to Section 20 of the Specific Relief Act (Pre-amendment) lists some of the principles that the court should take intoGconsideration while exercising discretion. The factors to be consideredwhile exercising discretion include hardship to the defendant/seller whichhe did not foresee, hardship to the plaintiff/purchaser in case of non-performance, or whether the contract, even when not void, was enteredunder the circumstances that make the enforcement of specific H

performance inequitable, or whether the plaintiff has done substantialacts or suffered losses as a consequence of the contract, and the conductof the parties, including that of the defendant/seller and othercircumstances under which the contract was entered are such that theygive an unfair advantage over the defendant/seller. The court shouldexamine whether the plaintiff/purchaser had, in fact, performed his partof the contract, and if so, how and to what extent, and in what mannerhe has performed, and whether such performance was in conformitywith the terms of the contract. The status of the parties, and whetherthe plaintiff/purchaser is a speculator in the property, who buys and sellsproperties, and whether his conduct reflects an attempt to gain on accountof the rise in the price of the property, hoping that the delay in paymentof full consideration would go to his advantage, will be a relevantconsideration[7]. Incapacity of the defendant/seller and whether theplaintiff/purchaser is operating in property trade, or as a financer ormiddleman and the defendant/seller is a typical property owner, mayalso affect the exercise of discretion. In cases where the defendant/seller claims that he was gullible and nescient, who got caught by enteringinto the agreement to sell, facts like whether the sale consideration islower than the market price and the terms and conditions settled areunfavourable, should be given due weightage. Sometimes the defendant/seller, post the agreement to sell, in consultation with elders or familymembers, wishes to back out because the decision to sell was a folly,unwise, or a result of trickery. In such cases, the conduct of thedefendant/seller would be of consequence. The defendant/seller wouldbe well advised to immediately and without delay write to the plaintiff/purchaser reneging the agreement to sell and enclose a cheque for theamount received. His offer to pay or payment of interest or damageswould be an added factor as the intending purchaser would then beentitled to look for another property.

20. Time, it is stated, is not the essence of the contract in the caseof immovable properties, unless there are grounds to hold to the contrary.This doctrine is applied, without being unfair and inequitable to thedefendant/seller, as the court should not ignore that a person sells theproperty when he needs money, and, therefore, expects the money inthe stipulated or reasonable time, which would meet the purpose of thesale. The purpose of sale can vary from the need for liquid cash to be 7 See K.S. Vidyanadam and Others v. Vairavan, (1997) 3 SCC 1

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7 See K.S. Vidyanadam and Others v. Vairavan, (1997) 3 SCC 1

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Ainvested to earn interest, medical, educational, child’s marriage orpurchasing another property. To save capital gains, the seller has topurchase another immovable property, unless the proceeds are exempt.There has been a steep rise in the prices of land in the last quarter of the20[th] Century in India. With the rise in property value, the value of moneyhas fallen. At times, delay in payment would defeat the defendant/seller’sBpurpose[8]. Therefore, the offer of the plaintiff/purchaser in writing andthe time and occasion when the offer to pay the balance amount to thedefendant/seller is an important factor which would matter when thecourt examines the question of discretion, that is, whether or not to granta decree of specific performance. While examining these aspects, theCquantum of money paid by the plaintiff/seller to the defendant/purchasermay become a relevant fact that merits due consideration. There is adistinction between limitation and delay and laches. Limitation is a groundfor dismissing a suit even if the plaintiff is otherwise entitled to specificperformance, while delay operates to determine the discretion andexercise under Section 20 of the Specific Relief Act, even if the suit isDnot dismissed on account of limitation. However, not one but severalaspects have to be considered when the court, in terms of Section 20 ofthe Specific Relief Act, exercises discretion, guided by judicial principles,sound and reasonable.

21. Having said that, let us examine the facts of this case. AsEdiscussed earlier, the respondent – plaintiff had not only averred in theplaint about his issuing notices within the period of six months of theagreement in question, calling upon the appellant – defendant to performhis part of contract and conclude the sale transaction, also showing hisreadiness and willingness to perform his part of the contract, but theFrespondent had also proved the same by stepping into the witness box.Though much reliance was placed by the learned counsel for the appellanton the decisions of this Court in case of Ritu Saxena vs. J.S. Grover &Another (2019) 9 SCC 132, in case of Abdullakoya Haji Vs. RubisTharayil (2019) 17 SCC 216, and other cases, to submit that the respondent had failed to establish his financial capacity to pay the balanceGamount of consideration at the relevant time and had also failed to depositthe said amount in the court at the time of filing of the suit, he was notentitled to the discretionary relief of Specific Performance as granted 8 See Paragraphs 25, 36 & 37 in Saeadamani Kandappan v. S. Rajalakshmi and OthersH(2011) 12 SCC 18.

by the Court, we do not find any substance in any of the said submissions.As per the ratio of judgment laid down by the three-judge bench in caseof Syed Dastagir (supra), the compliance of “readiness and willingness”has to be in spirit and substance and not in letter and form, while makingaverments in the plaint. As per the Explanation (i) to Section 16(c), heneed not tender to the defendant or deposit the amount in the court, buthe must aver performance of, or readiness and willingness to performthe contract according to its true construction.

22. Having regard to the facts and circumstances of the case andto the conduct of the parties, we have no hesitation in holding that therewas due compliance of Section 16(c) read with its Explanation on thepart of the respondent and that it was the appellant who had failed toperform as per the terms of the agreement, though called upon by therespondent to perform. The High Court also had rightly held that theplaintiff had complied with the requirements of Section 16(c) of the saidAct by making a specific pleading with regard to his readiness andwillingness and also proving the same by reliable evidence. This Courtdoes not find any illegality or infirmity in the impugned judgment passedby the High Court. We, therefore confirm the same, so far as granting ofdecree for specific performance of the agreement in question isconcerned.

23. At this juncture, the Court cannot be oblivion to the fact thatthere has been a steep rise in the price of immovable properties sincelast few decades. Before the final hearing of the appeal, the partieswere sent to the Mediation Centre for exploring the possibility ofsettlement, however, the mediation remained unsuccessful. Having regardto the fact that the agreement in question was entered into between theparties in October 1989, and considering the steep rise in the prices ofland, we are of the opinion that interest of justice would be met if therespondent is directed to pay some more amount. It is also noted that theappellant had enjoyed the possession of the suit land all through out.Hence in the facts and circumstances of the case, the respondent isdirected to deposit a sum of Rupees One Crore in the Trial Court towardsthe sale consideration, over and above the amount that might have beendeposited by him, within a period of eight weeks from today. On suchdeposit being made, the appellant shall execute the sale deed in favour A

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Aof the respondent and shall also be at liberty to withdraw the said amountdeposited by the respondent.

24. The appeal is dismissed subject to the aforesaid directions.

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Ankit Gyan and Anurag Bhaskar

(Assisted by : Adnan Khan, LCRA)

Appeal dismissed.

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