Specific Performance: Time, Readiness and a Rising Market
By an agreement dated 5 March 2021, Thomas agreed to sell his 6.5 cents of land with a shop building in Kottayam to Binu for Rs. 35,00,000. Binu paid Rs. 5,00,000 as advance; the balance was to be paid on execution of the sale deed on or before 5 September 2021. The agreement made time 'the essence of the contract' and provided that on default the seller might forfeit the advance. Thomas did not appear before the Sub-Registrar on 5 September despite Binu's notice. Binu sent a lawyer's notice on 10 January 2022 demanding execution, which Thomas refused on 20 January 2022, saying Binu had never tendered the balance. Binu filed a suit for specific performance on 10 January 2024. He produces a bank statement showing Rs. 1,20,000 on the relevant date and says he had arranged the balance from his brother; he did not deposit the balance in court. Thomas pleads limitation, want of readiness and willingness, and that the market value is now Rs. 60,00,000.
1. Is the suit barred by limitation under Article 54 of the Limitation Act? Compute the relevant dates.
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The suit is within time. Article 54 gives three years from the date fixed for performance, or, where no date is fixed, from the date on which the plaintiff has notice that performance is refused. Here a date was fixed: 5 September 2021. Three years from that date expire on 5 September 2024. The suit was filed on 10 January 2024, well within the period.
Even if one takes the refusal date of 20 January 2022 as the starting point, the suit is within three years. The article is not read as requiring the plaintiff to sue within a reasonable time after the agreement; the statutory period governs. The seller's argument that the plaintiff slept over his rights for two years may be relevant to discretion and to readiness, but it does not make the suit time-barred. The limitation objection must fail.
2. Has Binu proved readiness and willingness under Section 16(c) of the Specific Relief Act? Consider his bank balance, the brother's assistance and the absence of a deposit.
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Section 16(c) requires the plaintiff both to aver and to prove that he has always been ready and willing to perform his part. Readiness means financial and practical capacity; willingness means a genuine intention shown by conduct. The plaintiff must prove capacity as on the date of the agreement and continuing until the decree.
Binu's conduct is partly favourable: he issued notice, attended before the Sub-Registrar on the agreed date, and demanded execution. But his bank statement shows only Rs. 1,20,000 against a balance of Rs. 30,00,000. An oral assertion that his brother would arrange the money is weak unless supported by the brother's affidavit, bank sanction or accounts. A plaintiff need not deposit the entire balance before suit where the seller has refused, because tender would be futile; but he must show he could have paid. On the present record readiness is not satisfactorily proved. The court should give him a short opportunity to prove the brother's capacity and to deposit the balance; if he fails, the suit must be dismissed. If he deposits the balance, willingness may be inferred.
3. How should the court exercise discretion under Section 20 of the Specific Relief Act, given that time was expressly of the essence and the price has risen sharply?
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Specific performance of an agreement to sell immovable property is the normal remedy because damages are usually inadequate. A rise in market price from Rs. 35,00,000 to Rs. 60,00,000 is not, by itself, hardship to the seller under Section 20(2); otherwise a defaulting seller could always profit from his own breach. The court should not refuse relief merely because the bargain has become unfavourable.
Time was expressly made of the essence, so Binu had to perform by 5 September 2021 or show that Thomas prevented performance. Thomas's absence before the Sub-Registrar excuses formal tender. But the two-year delay before suit and the failure to deposit the balance are relevant to discretion. The proper course is a conditional decree: direct Binu to deposit the balance of Rs. 30,00,000 within 60 days, with interest for the period of delay if the court considers it just, and only then direct execution of the sale deed. If he does not comply, the suit should be dismissed, with liberty to seek damages.