Introduction
A buyer who sues for specific performance of an agreement to sell has to show the court more than a valid contract and a seller who backed out. He must also prove that he was ready and willing to do his own part throughout, starting from the day the agreement was signed. In Mohammed Khaleel (D) through LRs & Ors. v. Jayamma, Civil Appeal No. 2187 of 2011, reported as 2026 INSC 651, a Bench of Justice Prashant Kumar Mishra and Justice N.V. Anjaria decided the appeal on June 23, 2026 and made clear how that proof is to be judged. Financial documents created years after the suit was filed cannot prove that the buyer could pay the balance at the time that mattered. The Court also held that a buyer who waits a long time before suing, even if he stays within the limitation period, may lose his claim to the equitable relief of specific performance.
Background of the Dispute
The Agreement to Sell
On December 20, 1990, the original plaintiff, Mohammed Khaleel, agreed to buy a vacant site in Mysore measuring 100 feet by 78 feet from the defendant, Jayamma, for a total price of ₹3,00,000. He paid ₹25,000 as earnest money. The parties agreed that the sale deed would be registered within four months and that the balance of ₹2,75,000 would be paid before the Sub-Registrar at the time of registration. The seller handed over the original title documents, including a will deed, a settlement deed, the katha extract and encumbrance certificate, and the Trial Court later found that the buyer had also been given possession on the date of the agreement.
The Exchange of Legal Notices
The dispute began over two conditions that the buyer said had to be met before the sale could go through. The first was an approach road that the buyer claimed the seller’s siblings had agreed to lay. The second was the permission needed under the Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA), which regulated the transfer of urban land. The buyer sent a notice dated April 15, 1991, but it never reached the seller because it carried the wrong house number. According to the seller, that notice admitted that the property had not been measured and the road had not been formed, and said the buyer therefore could not be compelled to purchase.
By a notice dated April 26, 1991, the seller rescinded the agreement and forfeited the earnest money. She relied on the expiry of the agreed time and on the buyer’s failure to obtain ULCRA permission. The buyer replied on April 30, 1991, admitting that he had received the documents and saying that permission had not been obtained because no approach road had been made. A further notice on July 30, 1992 accused the seller of taking back possession by force and said the buyer was ready to perform provided ULCRA permission was obtained. The seller replied on August 11, 1992 that she did not own the adjoining land on which the buyer wanted a road, and that his new conditions showed he was unwilling to perform.
Proceedings Before the Trial Court and the High Court
The buyer filed O.S. No. 432 of 1993 before the Principal Civil Judge (Senior Division), Mysore, on December 20, 1993. He sought specific performance and possession, and in the alternative ₹3,00,000 as compensation for breach. His evidence included 29 documents, among them four fixed deposit receipts (FDRs) of ₹70,000 each. The seller led no oral evidence and did not enter the witness box. On January 31, 2002, the Trial Court decreed the suit. It held that time was not of the essence, that the buyer was ready and willing, and that the seller had rescinded the contract without justifiable cause.
The Karnataka High Court reversed that decree on December 9, 2009 in R.F.A. No. 418 of 2003. It held that the buyer had failed to plead and prove readiness and willingness, that his failure to file an affidavit for ULCRA permission showed he was not ready, and that his delay of about two years and nine months in suing counted against him even though the suit was within limitation. The buyer’s legal representatives then appealed to the Supreme Court.
The Legal Framework: Section 16(c) of the Specific Relief Act, 1963
What Section 16(c) Requires
Section 16 of the Specific Relief Act, 1963 lists the persons against whom specific performance cannot be enforced in favour of a plaintiff. Clause (c) is the most frequently argued provision in suits on agreements to sell. Before the Specific Relief (Amendment) Act, 2018 came into force on October 1, 2018, the clause barred relief to a plaintiff who failed to aver and prove that he had performed, or had always been ready and willing to perform, the essential terms of the contract, other than terms whose performance the defendant had prevented or waived. Because the agreement and the suit in this case came long before 2018, the Court applied the unamended provision.
The 2018 amendment removed the word “aver” from clause (c) and from Explanation (ii), so the text now requires the plaintiff to prove performance or readiness and willingness. This change has not weakened the rule, and the plaint must still contain the necessary averments. Forms 47 and 48 in Appendix A to the Code of Civil Procedure, 1908 still include a specific paragraph stating that the plaintiff has been and still is ready and willing to perform, and courts continue to treat a plaint without that pleading as defective. In Katta Sujatha Reddy v. Siddamsetty Infra Projects Pvt. Ltd., (2023) 1 SCC 355, the Supreme Court held that the 2018 amendments are substantive and prospective. Transactions entered into before October 1, 2018, such as the one in Mohammed Khaleel, are therefore still governed by the old text.
Readiness and Willingness Are Separate Requirements
The Court repeated the settled distinction between the two limbs. “Readiness” means financial capacity, that is, the plaintiff’s ability to pay the balance consideration. “Willingness” means the plaintiff’s conduct and intention to go ahead with the contract. Both must be shown together. A buyer who has the money but keeps raising new conditions fails on willingness, and a buyer who is eager to complete but cannot pay fails on readiness.
Deposit Is Not Mandatory, but Proof of Funds Is
Explanation (i) to Section 16 provides that, in a contract involving payment of money, the plaintiff need not actually tender the money to the defendant or deposit it in court unless the court directs him to do so. The Court accepted this in paragraph 36 of the judgment, observing that the appellants did not have to deposit the consideration physically. It added that they still had to place reliable and acceptable evidence on record showing that they had enough money to complete the transaction at the relevant time. The Explanation relieves the plaintiff only of the obligation to tender or deposit. It does not relieve him of the burden of proving that he had the funds.
Precedents Relied Upon by the Supreme Court
The Bench grounded its reasoning in a consistent line of Supreme Court decisions on continuous readiness and willingness.
In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao, (1995) 5 SCC 115, the Court held that continuous readiness and willingness is a condition precedent to relief. It also held that the plaintiff must prove the availability of the consideration from the date of execution of the agreement until the date of the decree, and that the court must look at the plaintiff’s conduct before and after the filing of the suit. His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar, (1996) 4 SCC 526, drew the distinction between readiness as financial capacity and willingness as conduct. In Umabai v. Nilkanth Dhondiba Chavan, (2005) 6 SCC 243, the Court held that a finding on whether the plaintiffs were all along and still ready and willing is mandatory under Section 16(c) and must rest on the pleadings and evidence as a whole.
Man Kaur v. Hartar Singh Sangha, (2010) 10 SCC 512, speaks most directly to the facts of this case. There the Court explained that even where the seller has clearly committed breach, for instance by demanding more money than agreed, a buyer who did not have the balance consideration, or the means to arrange it, when the contract had to be performed cannot obtain specific performance. Proving the defendant’s breach does not relieve the plaintiff of proving his own readiness.
The Supreme Court’s Analysis
Fixed Deposits Created After the Suit Could Not Prove Readiness
The appellants argued that the High Court had wrongly counted only two FDRs, when Exhibit 29 showed four FDRs totalling ₹2,80,000, which was more than the ₹2,75,000 balance. The Supreme Court accepted the arithmetic but held that it did not help the appellants. The four FDRs were dated October 4, 1999, November 22, 1999, April 3, 2001 and August 23, 2001. All of them were created several years after the suit was filed on December 20, 1993, and nearly a decade after the agreement.
The Court found no material at all showing that the buyer had the balance consideration when the agreement was executed, during the four months fixed for performance, or when the suit was filed. It approved the High Court’s view that the availability of funds must be proved with reference to the relevant point of time and not by relying on financial documents generated long after the filing of the suit. This is the central holding of the judgment. Readiness is tested from the date of the agreement onward, and a plaintiff cannot fill the gap for the years that matter by showing funds arranged during the trial.
Passivity Over ULCRA Permission Showed Lack of Willingness
The appellants argued that, as the transferor, the seller had the main responsibility for obtaining ULCRA permission, and that the buyer had offered in his reply of April 30, 1991 to sign whatever was needed. The Court rejected this argument on the evidence. The record showed that both parties had to obtain the permission. PW-1, the plaintiff’s own son, admitted in his testimony that the plaintiff had not furnished the necessary affidavit or forms. The Court held that the buyer had remained passive and waited for the seller to act, and that this conduct showed a failure to prove continuous readiness and willingness.
The finding shows that willingness is judged by what a party does and not by what he says in correspondence. Where a statutory clearance needs action from both parties, a buyer who blames the seller while taking no step himself will struggle to establish willingness under Section 16(c).
Delay Within Limitation Can Still Defeat the Equitable Relief
The appellants argued that the suit was within limitation and that delay had not been framed as an issue before the Trial Court. Under Article 54 of the Schedule to the Limitation Act, 1963, a suit for specific performance must be filed within three years from the date fixed for performance or, if no date is fixed, from the date on which the plaintiff has notice that performance is refused. The suit here fell within that period.
The Supreme Court held that compliance with limitation does not end the inquiry. A party claiming an equitable relief such as specific performance must have conduct beyond reproach, and this includes approaching the court promptly and with diligence, not merely within limitation. The Court relied on its earlier decision in Rajesh Kumar v. Anand Kumar, (2024) 13 SCC 80, also authored by Justice Mishra, which in turn drew on K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1, Azhar Sultana v. B. Rajamani, (2009) 17 SCC 27, Saradamani Kandappan v. S. Rajalakshmi, (2011) 12 SCC 18, and Atma Ram v. Charanjit Singh, (2020) 3 SCC 311. Those cases establish that the time limits agreed by the parties keep their relevance even when time is not of the essence, that courts disapprove of suits not filed soon after breach or refusal, and that a three-year limitation period does not entitle a buyer to wait one or two years before suing.
On the facts, the seller clearly refused to perform by her notice of April 26, 1991. The time fixed for completing the sale had expired, and the buyer had neither tendered the balance nor started proceedings promptly. He filed suit only on December 20, 1993, roughly two years and nine months later. The Court held that this conduct reflected a lack of continuous readiness and willingness, which is a sine qua non for specific performance.
Conclusion of the Court
The Supreme Court held that this was not a fit case for granting the discretionary relief of specific performance. The appellants had failed to prove readiness and willingness and had failed to approach the court with promptitude. The appeal was dismissed and the High Court’s judgment was upheld. The fact that the defendant never entered the witness box did not help the plaintiff, because the burden under Section 16(c) rests on the plaintiff and is not discharged merely because the defendant leads no evidence.
How the Ruling Fits With the Post-2018 Specific Relief Regime
The 2018 amendment made significant changes to the Specific Relief Act. The substituted Section 10 now provides that specific performance “shall be enforced” by the court, subject to Section 11(2), Section 14 and Section 16. The old discretionary power under Section 20 was removed, and that section now deals with substituted performance. Some have read these changes as making specific performance close to a matter of right.
Mohammed Khaleel is a reminder that this entitlement is expressly subject to Section 16. Even for contracts governed by the amended Act, a plaintiff who cannot prove that he has always been ready and willing is barred by Section 16(c) itself, so the analysis in this judgment remains relevant after 2018. The Court’s reasoning on delay rests on the equitable nature of the remedy, and litigants can expect it to be raised in post-amendment cases as well, particularly where the plaintiff’s conduct suggests he was waiting to see how the market moved rather than seeking to complete the transaction.
Conclusion
Mohammed Khaleel v. Jayamma confirms that a plaintiff’s readiness and willingness in a specific performance suit is judged over the whole life of the transaction and not only once litigation begins. Fixed deposits opened years after the suit, reliance on the seller to take steps both parties had to take, and a delay of almost three years before going to court together led the Supreme Court to refuse relief, even though the defendant had led no evidence and the Trial Court had decreed the suit. Anyone entering into an agreement to sell immovable property should read the ruling as a clear message that they must keep their funds in place, record what they do to perform, and move quickly when the other side refuses to perform.
The principles of NCLAT on Settlement and Personal Guarantor Discharge can be considered alongside the Supreme Court’s approach to proving readiness and willingness from the date of an agreement.
