Conduct Of Plaintiff Crucial In A Suit Of Specific Performance: Supreme Court

The Supreme Court observed that the conduct of a plaintiff is very crucial in a suit for specific performance and the same has to be assessed by the Courts.

In evaluating whether the plaintiff was ready and willing to perform his obligations under the contract, it is not only necessary to view whether he had the financial capacity to pay the balance consideration, but also assess his conduct throughout the transaction, the bench comprising Justices DY Chandrachud and AS Bopanna said.

The court observed thus while allowing an appeal filed against Madras High Court judgment that had confirmed the decree for specific performance.

The bench, referring to the Trial Court judgment, noticed that the trial court failed to frame an issue on whether the plaintiff was ready and willing to perform his obligations under the contract and instead assessed whether he is entitled to the relief of specific performance. 

On the question of non framing of issue regarding readiness and willingness, the bench observed thus:

"25...In doing so, the trial court viewed the legal issue from an incorrect lens. The foundation of a suit for specific performance lies in ascertaining whether the plaintiff has come to the court with clean hands and has, through his conduct, demonstrated that he has always been willing to perform the contract. There is a conspicuous absence in judgment of the trial court of any reference to evidence led by the respondent to indicate his willingness to perform the contract. The trial court merely adverted to "document produced on behalf of the plaintiff" and concluded that he had sufficient means to purchase the suit property. Apart from this observation, the judgment fails to analyse the terms of the agreement, the obligations of the parties and the conduct of the respondent or the appellant. In evaluating whether the respondent was ready and willing to perform his obligations under the contract, it is not only necessary to view whether he had the financial capacity to pay the balance consideration, but also assess his conduct throughout the transaction"

The court added that the plaintiff must prove that he is ready and willing to perform the contract. "The burden lies on the plaintiff. The respondent has not led any evidence that he was ready or willing to perform his obligations under the agreement", the court noted.

The court added that the remedy for specific performance is an equitable remedy and Section 20 of the Specific Relief Act confers a discretion on the Court. While allowing the appeal, the bench observed:

36..In deciding whether to grant the remedy of specific performance, specifically in suits relating to sale of immovable property, the courts must be cognizant of the conduct of the parties, the escalation of the price of the suit property, and whether one party will unfairly benefit from the decree. The remedy provided must not cause injustice to a party, specifically when they are not at fault. In the present case, three decades have passed since the agreement to sell was entered into between the parties. The price of the suit property would undoubtedly have escalated. Given the blemished conduct of the respondent-plaintiff in indicating his willingness to perform the contract, we decline in any event to grant the remedy of specific performance of the contract. However, we order a refund of the consideration together with interest at 6% per annum.