Money Arranged Years Later Does Not Prove Readiness: Supreme Court Rejects 1990 Sale Agreement Suit

Case at a Glance

The Supreme Court has upheld the dismissal of a suit for specific performance of a 1990 agreement to sell a Mysore site, holding that the buyer failed to prove continuous readiness and willingness under Section 16(c) of the Specific Relief Act. Fixed deposits made between 1999 and 2001, years after the suit, did not show funds at the relevant time, and the buyer's passivity on ULCRA permission and delay told against him.

On 20 December 1990 the respondent agreed to sell a vacant site of 100 ft x 78 ft for Rs 3,00,000; Rs 25,000 was paid as earnest money and the sale deed was to be registered within four months. In April 1991 the seller rescinded the agreement, citing the failure to obtain permission under the Urban Land Ceiling Act (ULCRA) and expiry of time, and forfeited the earnest money.

The buyer filed a suit for specific performance on 20 December 1993. The trial court at Mysore decreed it on 31 January 2002, but the Karnataka High Court reversed that on 9 December 2009, holding readiness and willingness not proved. The buyer's legal representatives appealed.

The Key Question Before the Court

Did the buyer prove that he was continuously ready and willing to complete the sale from the agreement until the suit?

Readiness Is Proved at the Relevant Time

The Court explained that “readiness” concerns financial capacity and “willingness” concerns conduct, and that continuous readiness and willingness is a condition precedent (N.P. Thirugnanam, (1995) 07 SC CK 0020, Umabai, (2005) 04 SC CK 0095, Man Kaur, (2010) 10 SC CK 0089, Rajesh Kumar v. Anand Kumar). It held that “the availability of funds must be proved with reference to the relevant point of time”. Four fixed deposits of Rs 70,000 each, created between 1999 and 2001, did not prove funds between the agreement and the suit.

The buyer had also not furnished the affidavit and forms needed for ULCRA permission and remained passive. Since equitable relief requires that “the conduct of the party claiming it must be beyond reproach”, the Court held that the delay of about two years and nine months before suing, together with this passivity, “reflects lack of continuous readiness and willingness”.

What the Court Actually Held

• The High Court's dismissal of the suit for specific performance was upheld.
• Funds must be shown to have been available during the relevant period, not years later.
• Passivity on obtaining necessary permissions undermines a claim of readiness.
• The appeal was dismissed.

Why This Judgment Matters

• It reaffirms the strict proof required under Section 16(c) for pre-2018 agreements.
• It shows that delay within limitation can still defeat equitable relief.
• It is useful for both buyers and sellers in long-running sale agreement disputes.

What Should Advocates Take Away From the Judgment?

For Buyers' Counsel

• Lead documentary proof of funds for the period from agreement to suit.
• Show active steps to obtain permissions and complete the sale.

For Sellers' Counsel

• Test the dates of the buyer's financial documents.
• Highlight delay and conditional or passive conduct.

Key Takeaways

Frequently Asked Questions

No. It was within limitation, but the Court held the conduct and delay showed lack of continuous readiness.

They were made between 1999 and 2001, years after the suit was filed.

The provision as it stood before the 2018 amendment.

Conclusion