Supreme Court Denies Specific Performance Due to Delay and Lack of Readiness

The Supreme Court of India has delivered a significant ruling in Pydi Ramana @ Ramulu v. Davarasety Manmadha Rao, wherein it denied specific performance of a sale agreement due to the plaintiff’s failure to prove continuous readiness and willingness to perform his obligations. The judgment provides clarity on the requirements under the Specific Relief Act, 1963, reinforcing that mere filing of a suit within the limitation period does not automatically entitle a party to specific performance.

Background of the Case

The dispute arose from a sale agreement dated June 7, 1993, between the plaintiff, Davarasety Manmadha Rao, and the defendant, Pydi Ramana @ Ramulu, for the sale of 1.38 acres of land. The agreed price was Rs. 705 per cent, and the plaintiff paid an advance of Rs. 2,005 on the same day. An additional Rs. 17,000 was paid on June 23, 1993. As per the agreement, the sale deed was to be executed within a year after the property was surveyed.

The plaintiff alleged that despite repeated demands, the defendant failed to execute the sale deed, leading him to issue a legal notice on May 30, 1996. Upon receiving no response, he filed a suit for specific performance on June 9, 1997. The defendant denied the allegations, claiming the agreement was fabricated and that his signature had been obtained on blank stamp papers.

Key Legal Issues Considered

Whether the plaintiff had established continuous readiness and willingness to perform his obligations under the contract.
Whether the appellate courts erred in reversing the trial court’s decision, which had denied specific performance.
Whether the long delay in seeking enforcement of the agreement affected the plaintiff’s entitlement to relief.

Arguments by the Appellant (Defendant)

The appellant (defendant) contended:

The trial court had correctly denied specific performance, recognizing that the plaintiff was not diligent in enforcing the agreement.
The plaintiff remained silent for over two years after the expiry of the contractual period, which indicated a lack of readiness and willingness.
Time was the essence of the contract, and the failure to adhere to the timeline was fatal to the plaintiff’s claim.
The plaintiff failed to call upon the defendant to conduct a survey of the land, as required under the agreement.

Arguments by the Respondent (Plaintiff)

The respondent (plaintiff) argued:

Time was not the essence of the contract, and the payment of additional consideration after the agreement confirmed this.
The defendant was responsible for conducting the land survey, and since he failed to do so, the plaintiff could not be held accountable for delays.
The defendant had never formally canceled the agreement, and the plaintiff had consistently demonstrated his willingness to complete the transaction.

Supreme Court’s Analysis

The Supreme Court emphasized the importance of proving continuous readiness and willingness, as mandated by Section 16(c) of the Specific Relief Act. The key observations were:

Delay in Seeking Performance: The plaintiff issued a legal notice nearly three years after the agreement and filed the suit more than a year after the notice, showing an unexplained lack of urgency.
Failure to Demand Survey: Since the plaintiff had not insisted on the survey, he could not argue that his obligation to pay the balance was contingent upon it.
Readiness and Willingness: The plaintiff’s inaction for over two years was inconsistent with the requirement of continuous readiness and willingness.

Final Verdict

The Supreme Court set aside the judgments of the High Court and the first appellate court, restoring the trial court’s order, which had denied specific performance and only granted a refund of the advance amount with interest. The Court held that:

The plaintiff failed to establish readiness and willingness as required under Section 16(c) of the Specific Relief Act.
The delay in initiating legal proceedings was significant and unexplained, undermining the claim for equitable relief.
Specific performance is a discretionary remedy, and courts must ensure that the plaintiff has acted diligently and in good faith.

Impact of the Judgment

Strengthening the Readiness and Willingness Requirement: The ruling reinforces that plaintiffs must consistently demonstrate their intent to perform contractual obligations.
Prevention of Opportunistic Litigation: The decision discourages attempts to enforce agreements long after their stipulated timelines without valid reasons.
Restoring Discretion in Specific Performance Cases: The judgment affirms that specific performance is not an automatic right but a discretionary relief.

Conclusion

The Supreme Court’s ruling in this case clarifies that mere filing of a suit within the limitation period does not guarantee specific performance. Plaintiffs must actively pursue their contractual rights and demonstrate an unbroken commitment to fulfilling their obligations. The judgment will serve as a precedent in cases where delays and lack of diligence undermine claims for equitable relief.

Petitioner Name: Pydi Ramana @ Ramulu.
Respondent Name: Davarasety Manmadha Rao.
Judgment By: Justice Pamidighantam Sri Narasimha, Justice Aravind Kumar.
Place Of Incident: Andhra Pradesh.
Judgment Date: 10-07-2024.

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