Specific Performance Can Be Denied if There is Long Delay

Source: Supreme Court

Why in News? 

A Bench of Justice Prashant Kumar Mishra and Justice Anjaria, in V.N.A.S Chandran v. S Venila and Others (2026), allowed a property owner's appeals against a Madras High Court judgment directing specific performance of a 2004 agreement to sell, holding that the purchasers had failed to establish continuous readiness and willingness and that the long delay in adjudication independently disentitled them to the equitable relief. 

What was the Background of V.N.A.S Chandran v S Venila and Others (2026) Case? 

• The parties entered into an agreement to sell dated April 1, 2004, under which the appellant agreed to sell a property in Udhagamandalam for ₹2.25 crore. 
• The purchasers paid an advance of ₹85 lakh, as found by the trial court. 
• The trial court declined to grant the discretionary relief of specific performance despite recording payment of the advance. 
• On appeal, the Madras High Court reversed this finding and directed execution of the sale deed in favour of the purchasers. 
• The property owner challenged the High Court's judgment before the Supreme Court. 

What were the Court's Observations? 

• On continuous readiness and willingness: The Court held that a plaintiff seeking specific performance must demonstrate the availability of funds and a continuing readiness and willingness to perform the contract at every material stage, beginning soon after the agreement and running through to execution of the decree, and not merely at isolated points in the litigation. 
• On the demand draft produced during appeal: The Court rejected the High Court's reliance on a demand draft for ₹1.40 crore produced by the purchasers only during appellate proceedings in 2011, holding that funds arranged years after the suit could not retrospectively establish continuous financial readiness. 
• On the purchasers' financial position: The Bench found that the purchasers had not proved possession of sufficient funds at the time the suit was filed, noting that the Memorandum of Understanding they relied upon for raising money was mentioned in neither their legal notice nor the plaint. 
• On dishonoured cheques: The Court noted that two cheques issued by the purchasers toward the sale consideration, for ₹25 lakh and ₹5 lakh respectively, were dishonoured for insufficiency of funds, undermining their claim of financial readiness. 
• On the timing of the purchasers' own property sale: The Bench observed that the purchasers sold their Chennai properties only in May 2006, after the suit had already been filed in September 2005, indicating that they lacked the necessary funds when the suit was instituted. 
• On reliance on precedent: The Court relied on N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and Janardan Das v. Durga Prasad Agarwalla (2024) to reiterate that continuous readiness and willingness is a condition precedent for specific performance, to be assessed from the conduct of the plaintiff throughout the period between the agreement and the decree. 
• On inconsistent conduct of the purchasers: The Court held that one purchaser's pursuit of a criminal complaint for recovery of the advance amount, while simultaneously seeking specific performance in the civil suit, along with contradictory stands taken on assignment of contractual rights to a third party, further disentitled the purchasers to equitable relief. 
• On delay as an independent ground: The Bench held that the passage of more than two decades since the agreement was, by itself, a factor weighing against grant of specific performance, referring to its earlier decisions in Saradamani Kandappan and Nanjappan, and noted that hardship to the defendant — one party being of advanced age and another having passed away during the litigation — is a recognised consideration under Section 20 of the Specific Relief Act, 1963. 
• On relief granted: The Supreme Court restored the trial court's decree directing refund of ₹85 lakh with interest and permitted the purchasers to withdraw the ₹1.40 crore already deposited pursuant to the High Court's decree, along with accrued interest. 

What is Specific Performance under the Specific Relief Act, 1963? 

About: 

• Specific performance constitutes an equitable remedy granted by a court to uphold the contractual commitments among the parties. 
• Unlike a claim of damages, which involves compensation for not fulfilling the contractual stipulations, specific performance operates as a remedy that enforces the terms agreed between the parties. 
• It is governed by the Specific Relief Act, 1963 (SRA). 
• Section 10 of SRA deals with specific performance in respect of contracts. It states that:  
  • The specific performance of a contract shall be enforced by the court subject to the provisions contained in sub-section (2) of Section 11, Section 14 and Section 16. 
• The Supreme Court in Katta Sujatha Reddy v. Siddamsetty Infra Projects (P) Ltd. (2023) held that the relief of specific performance of a contract can only be granted when the party claiming such relief shows its readiness and willingness to perform its obligations under the contract. 

Landmark Judgments: 

• His Holiness Acharya Swamy Ganeshdasji v. Seetharam Apar (1996):  
  • The Supreme Court explained the difference between 'readiness' and 'willingness' in this judgment. 
  • 'Readiness' refers to the plaintiff's financial capacity and ability to perform the contract, while 'willingness' relates to the plaintiff's conduct and intention to fulfill the contractual obligations. 
• Man Kaur v. Hartar Singh Sangha (2010):  
  • In this case, the Supreme Court held that even if the defendant has committed breach of contract, the plaintiff cannot obtain a decree for specific performance if the plaintiff fails to aver and prove their continuous readiness and willingness to perform their part of the contractual obligations. 
• Saradamani Kandappan v. S. Rajalakshmi (2011):  
  • In this important judgment, the Supreme Court observed that with the steep rise in real estate prices, it becomes inequitable to grant specific performance if the purchaser delays payment without justification from the vendor's side. 
  • The courts need to apply greater scrutiny in such cases. 
• Rajesh Kumar v. Anand Kumar (2024):  
  • This recent Supreme Court judgment dealt with the evidentiary value of the testimony given by a power of attorney holder. 
  • It held that a power of attorney holder cannot become a witness on behalf of the party and depose to prove that party's readiness and willingness to perform the contract.