No Straitjacket Formula With Regard To Readiness & Willingness; Same Has To Be Construed With Respect to Facts & Circumstances Of Each Case: Supreme Court

The appellant approached the Apex Court challenging the Delhi High Court judgment setting aside the decree of specific performance granted in favour of the appellant by the Single Judge.

The Division Bench of Justice Vikram Nath and Justice Sandeep Mehta held, “As held by this Court in multiple cases, there is no straitjacket formula with regard to ‘readiness and willingness’. The same has to be construed with respect to the facts and circumstances of each case. In light of the facts of this case, and bearing in mind the passage of more than seventeen years since the execution of agreement, we agree with the view of the Division Bench that the grant of specific performance is not an equitable relief at this stage.”

AOR Aneesh Mittal represented the Appellant while AOR Siddharth Batra represented the Respondent.

Factual Background

The appellant had instituted a suit for specific performance for the execution of an Agreement to Sell for the purchase of 300 square yards of property. Out of the total sale consideration of Rs 6.11 crore, a sum of Rs 60 lakh was paid as earnest money on the date of agreement and Rs 30 lakh was further advanced as part payment. The receipt of Rs 90 lakh was duly accepted by the respondents. The Trial Court decreed the suit for specific performance, holding that the appellant had demonstrated readiness and willingness whereas the respondents had defaulted on their obligations. Aggrieved, respondents preferred an appeal before the High Court. The High Court dismissed the same, noting that the appellant had the wherewithal to make the balance payment.

Against this order, the respondents approached the Apex Court by way of a SLP The matter was remitted to the High Court and the impugned order setting aside the decree of specific performance was passed. The respondents were entitled to forfeit the earnest money of Rs 60 lakh. Aggrieved by such an order, the plaintiff approached the Apex Court.

Reasoning

On a perusal of the facts of the case, the Bench found merit in the finding of the High Court that the appellant failed to prove his readiness and willingness. He had not been able to demonstrate that he had the necessary financial wherewithal to make the balance payment of Rs 5.21 crore by the due date. In addition to that, he did not even visit the office of the Sub-Registrar on the decided date.

The Bench further noted that the respondents too did not fulfil their contractual obligations, particularly with respect to obtaining mutation and securing conversion of the suit property from leasehold to freehold. “It is a settled principle that equity must operate in a manner that prevents unjust enrichment and restores the parties to their original position, as far as possible, particularly where both parties are at fault. We, therefore, are of the view that directing forfeiture of the earnest money would result in an equitable windfall to the respondents”, the Bench added.

Thus, in order to do complete justice and adjust the equities between the parties, the Bench directed the respondents to pay a lump sum amount of Rs 3 crore to the appellant, within four weeks. “This would fully restitute the appellant while avoiding further complications relating to the contract and also bring quietus to a dispute that has been protracted for over a decade. The judgment of the High Court shall stand modified to the above extent”, it ordered.

Cause Title: Subhash Aggarwal v. Mahender Pal Chhabra (Neutral Citation: 2026 INSC 11)

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