Ram Pal Saini agreed in 2007 to buy a 300-square-yard plot in Village Shalimar, Delhi, for ₹30 lakh. He paid ₹4.15 lakh in six instalments over four years. In 2013 he sued for specific performance, saying he had been "waiting after arranging huge money" and was "losing interest" on it. He never showed where that money was. On 16 October 2026 the Delhi High Court dismissed his appeal. It also held that the seller had no right to keep the ₹4.15 lakh, because the seller had never shown that he lost anything.
A sale agreed while the seller's own title was in litigation
The seller, Anil Kumar, held the plot under a will. When the agreement was signed, probate had already been granted to him (16 April 2007), but an objector, Beena Devi, was in possession. She appealed the probate and obtained an injunction against third-party dealings. The agreement recorded all this. It said possession would be delivered after the seller recovered it from Beena Devi "at his risk and responsibility". It also said he would get the property mutated after obtaining the letters of administration, and that the buyer would pay the balance within six months of mutation.
The buyer had three answers to the charge of delay. The property was never mutated. The seller had no possession until May 2013. And the seller kept asking for more time. The High Court rejected each one. After 14 December 2010 nothing stopped the sale, and the buyer knew it, because he made two payments in 2011. The possession clause made recovery from Beena Devi the seller's obligation, not a condition the sale deed had to wait for. On mutation, a buyer who wanted to complete could at least have called on the seller to complete it. There was not a single letter from the buyer asking for the sale deed.
"Losing interest on huge money": why that sentence failed
Section 16(c) of the Specific Relief Act bars specific performance for a plaintiff who fails to show that he "has performed or has always been ready and willing to perform" his essential terms. The law reports separate the two words. Willingness is a state of mind, read from the plaintiff's conduct. Readiness is financial capacity, and it has to be proved (J.P. Builders v. A. Ramadas Rao, (2011) 1 SCC 429). Both must continue from the date of the agreement to the date of the decree (N.P. Thirugnanam v. R. Jagan Mohan Rao, (1995) 5 SCC 115; H.P. Pyarejan v. Dasappa, (2006) 2 SCC 496).
The Court found the buyer short on every count:
- The plaint repeated the statutory phrase but gave no detail of where the ₹25.85 lakh balance was. Mechanically reproducing the statute, the Court said, does not suffice.
- The evidence was one bank statement for May–June 2013, around the time of the suit, produced only in cross-examination. There was nothing for 2011 or 2012, when the impediments had gone and the money was actually due.
- The conduct pointed the other way. A buyer who has the full balance does not pay ₹65,000 and then ₹1 lakh in instalments after the litigation has ended. He also does not wait from August 2011 to May 2013 without a word.
A purchaser need not "go about jingling money", but must prove the means to pay within the time the contract fixes.
That line paraphrases Sughar Singh v. Hari Singh, (2021) 17 SCC 705, and it marks the limit on the other side. Explanation (i) to Section 16 means the buyer need not tender the money or deposit it in court unless directed. Proof of capacity is still required, and the Supreme Court has refused to accept oral claims of funds without documents (Sukhwinder Singh v. Jagroop Singh, (2021) 20 SCC 245). Saini's claim to have money ready was exactly that kind of unsupported oral claim.
Old law or new: does the 2018 amendment matter here?
Exams tend to blur two changes made by the Specific Relief (Amendment) Act, 2018, which came into force on 1 October 2018:
| Before 1 Oct 2018 | After 1 Oct 2018 | |
|---|---|---|
| Nature of the remedy | Discretionary (old s.20). Courts could refuse on hardship or a rise in price. | Enforced as a rule (s.10), subject to ss.11(2), 14 and 16; the old s.20 discretion is gone |
| Section 16(c) | Plaintiff must aver and prove readiness and willingness | Plaintiff must prove it. Pleading is read as a whole, with no set formula (C. Haridasan, 2023). |
| Applies to | The amendment is prospective. Transactions and suits from before October 2018 stay under the old law (SC, 2025 INSC 1267, as noted in the SRA commentaries). | |
This agreement (2007) and suit (2013) fall under the old law, which is why the High Court spoke of the plaintiff having to "both plead and prove". The outcome would be the same under the new law. Readiness was not a question of the court's discretion or of how the plaint was worded. It was never proved, and Section 16(c) still demands proof after 2018.
Why the seller couldn't keep the ₹4.15 lakh
The seller argued that the buyer's default entitled him to forfeit what he had received. The High Court rejected this in three steps.
First, earnest and advance are different things. Earnest is paid when the contract is made, to bind it. It counts towards the price if the deal goes through and is forfeited if it fails through the buyer's fault (Shree Hanuman Cotton Mills v. Tata Air Craft Ltd., (1969) 3 SCC 522). Part payments made later towards the price are an advance, and the buyer can ordinarily recover them. A three-judge bench restated the distinction in Central Bank of India v. Shanmugavelu, (2024) 6 SCC 641. Here, ₹2 lakh was earnest and ₹2.15 lakh was advance. Fateh Chand v. Balkishan Das had the same split: ₹1,000 described as earnest and ₹24,000 paid as the first instalment, which the seller could not keep without proof of loss.
Second, there was no forfeiture clause. The only breach clause ran one way. If the seller failed, he had to pay double the earnest. Nothing was named as payable by the buyer on his breach. So the seller's claim fell under Section 73, and Section 73 compensates only proved loss.
Third, even where there is a forfeiture clause, Section 74 controls it. The Constitution Bench in Fateh Chand held that Section 74 covers stipulations for forfeiting money already paid, not just sums payable in future. Kailash Nath Associates v. DDA, (2015) 4 SCC 136 held that loss is a sine qua non for Section 74. Where loss can be proved it must be proved, and Section 74 applies to the forfeiture of earnest under a contract. This seller pleaded the opposite of loss: he said land prices in the area had risen many times over, and he still had the plot.
The double-earnest clause, from both sides
- The buyer's claim to ₹8.30 lakh failed. The amount named in the contract is only the upper limit of reasonable compensation under Kailash Nath. The buyer's only proved loss was the money itself, and refund with interest made that good.
- The clause did not bar specific performance. A stipulation to pay double the earnest does not by itself exclude specific performance, as the SRA commentaries note under Section 10. The buyer lost on readiness, not because of the clause.
- The refund came through Section 22. Refund of earnest must be specifically claimed (Section 22(2)), and the buyer had pleaded it in the alternative. If it has not been pleaded, the court must allow an amendment to add it at any stage.
The trial court had also found it "probable" that the buyer orally terminated the agreement in January 2012. The High Court set that finding aside. There was no letter, no notice of forfeiture, and no claim for refund at the time. The finding did not change the result, but it is a useful reminder that a defence of oral termination still needs proof.
MCQs on readiness, earnest and forfeiture
- Willingness to accept a sale deed on the agreed terms
- Financial capacity to pay the balance consideration
- Tender of the balance consideration before filing suit
- Deposit of the balance in court with the plaint
Answer
(b). Willingness is the state of mind shown by conduct. Under Explanation (i) to Section 16, tender or deposit is not essential unless the court directs it.
- Forfeit the earnest but return the part payments
- Forfeit everything received, as the buyer was in breach
- Retain nothing, because compensation needs proof of loss
- Claim double the earnest by way of penalty
Answer
(c). With no named sum, Section 73 applies, and it compensates only loss actually caused. This is Ram Pal Saini (2026), following Kailash Nath.
- Prove readiness and willingness; the requirement to "aver" in set words was removed
- Aver and prove readiness and willingness in the words of Forms 47 and 48
- Prove only willingness, readiness being presumed
- Do nothing further, since specific performance is now mandatory
Answer
(a). The words "aver and" were deleted, but proof is still required. The mandatory character of the remedy under the new Section 10 remains subject to Section 16.
