In property disputes, the most powerful remedy a buyer who has been denied a sale deed can seek is specific performance — a court decree directing the seller to execute the sale deed as agreed. But specific performance is an equitable remedy, not an automatic right. The Hon'ble Supreme Court has restated when it can be withheld — and the implications for property buyers and sellers who find themselves in lengthy litigation are significant.
What Happened
The parties had entered into an agreement to sell a property in Udhagamandalam in 2004 for ₹2.25 crore, with an advance of ₹85 lakh paid. The seller failed to execute the sale deed. The buyer filed a suit for specific performance. The trial court found that the advance was paid but refused specific performance as a discretionary matter. The Madras High Court reversed and directed execution of the sale deed. The Supreme Court restored the trial court's order refusing specific performance — but directed a refund of the advance with interest.
The Two Grounds on Which Specific Performance Was Refused
First — Readiness and Willingness: Under Section 16(c) of the Specific Relief Act (now Section 10), the plaintiff must plead and continuously demonstrate readiness and willingness to perform the contract throughout the litigation. This is not a one-time averment in the plaint — it must be maintained throughout. The Court found this was not adequately demonstrated here.
Second — Long Lapse of Time: The agreement was from 2004. By the time the litigation concluded, over two decades had passed. Property values, circumstances, and the practical ability of the parties to perform had all changed. The Court held that this long time lapse was a relevant equitable consideration that could disentitle a party from the relief of specific performance — even if the original contract was valid.
It is a well settled principle of law that specific performance is a discretionary remedy. A court is not bound to grant it merely because a valid contract is proved. The court must consider all relevant equitable circumstances — including the conduct of the parties, the change in circumstances, and the possibility of adequate compensation through damages or refund.
What Buyers and Sellers in Property Disputes Must Know
Practical Guidance
If you are the buyer: file the specific performance suit promptly after the seller refuses to execute the deed. Delay in filing — and failure to maintain readiness and willingness throughout the proceedings — are the two main grounds on which your claim can fail even if you are right on facts.
Throughout the litigation, demonstrate your continued readiness to pay the balance consideration — keep funds available or specifically plead it in your pleadings. Do not let years pass without active steps.
If you are the seller facing a specific performance suit for an old agreement: the lapse of time and changed circumstances are equitable defences the court can consider — though you will still be required to refund the advance with interest if you were in breach.
In Rajasthan, property values in major cities have changed dramatically in 10-20 years. A 2004 property agreement price is nowhere near 2024 market value. Courts are conscious of this and may refuse specific performance in favour of a monetary remedy — making the refund route the practical outcome even when the buyer is morally in the right.