Introduction: In Alagammal & Ors. v. Ganesan & Anr. 2024 Latest Caselaw 29 ,SC, the Supreme Court reaffirmed that a party seeking specific performance of an agreement to sell must continuously demonstrate readiness and willingness to perform its obligations. The Court held that merely filing a suit within the limitation period does not automatically entitle a purchaser to specific performance, particularly where there has been prolonged inaction and failure to comply with the contractual terms.
Facts of the Case The parties entered into a registered agreement for the sale of immovable property in November 1990 for a consideration of ₹21,000. The purchasers paid ₹3,000 as advance, while the remaining amount was to be paid within six months, after which the sale deed was to be executed. The purchasers failed to pay the balance amount within the stipulated period. Several years later, they claimed to have made additional payments and eventually issued a legal notice demanding execution of the sale deed. By that time, however, the property had already been sold to another purchaser through a registered sale deed. The trial court dismissed the suit for specific performance, but the First Appellate Court decreed it and the High Court affirmed the decree. The matter then reached the Supreme Court.
Issue Before the Supreme Court The principal issue was whether the purchasers were entitled to a decree for specific performance despite substantial delay, failure to establish continuous readiness and willingness, and the existence of a subsequent registered sale deed.
Supreme Court's Findings The Supreme Court held that the purchasers had failed to comply with the essential terms of the agreement. Although six months had been fixed for payment of the balance consideration, there was no convincing evidence that the purchasers had offered to pay the entire amount within that period or had taken timely steps to complete the transaction. The Court observed that: •Readiness and willingness must be both pleaded and proved throughout the contract period. •A purchaser cannot remain inactive for several years and later seek specific performance merely because the suit is filed within the limitation period. •The alleged subsequent payments were doubtful, particularly in light of the fingerprint expert's report questioning certain endorsements. •The purchasers failed to challenge the subsequent registered sale deed executed in favour of another purchaser, making the suit for specific performance legally unsustainable. •Even if some payments were accepted after the expiry of the stipulated period, such payments alone did not automatically extend the contractual time or revive the purchaser's right to seek specific performance. The Court also relied upon its earlier decision in K.S. Vidyanadam v. Vairavan, reiterating that while time is generally not regarded as the essence of contracts involving immovable property, contractual timelines cannot be ignored altogether. Courts must consider the conduct of the parties and exercise discretion while granting equitable relief.
Final Decision
The Supreme Court allowed the appeal and: •Set aside the judgments of the High Court and the First Appellate Court. •Restored the judgment of the Trial Court dismissing the suit for specific performance. •Held that the respondents were not entitled to enforce the agreement for sale in the facts of the case.
Significance of the Judgment This judgment reinforces that specific performance is an equitable remedy and not an automatic consequence of every agreement to sell. A purchaser must demonstrate continuous readiness and willingness to perform contractual obligations and act diligently within a reasonable time. The decision also makes it clear that long periods of unexplained inaction,
failure to challenge a subsequent sale, and inability to establish compliance with
contractual obligations are sufficient grounds for refusing the relief of specific
performance. It serves as an important reminder that courts will closely examine the conduct of the parties before enforcing agreements relating to immovable property.
