Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | C.A. No.-000050-000050 – 2026 |
| Diary Number | 60800/2025 |
| Judge Name | HON’BLE MR. JUSTICE VIKRAM NATH |
| Bench |
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| Precedent Value | Binding |
| Overrules / Affirms | Affirms existing principles on “readiness and willingness” and equitable adjustment of deposits |
| Type of Law | Civil law – specific performance; equity |
| Questions of Law |
|
| Ratio Decidendi | The Court held that “readiness and willingness” for specific performance must be judged in light of each case’s facts and cannot follow a rigid formula. After a seventeen-year delay, equity precludes specific performance and prevents one party’s unjust enrichment. Rather than forfeiture of earnest money, equity requires adjusting deposits to restore parties to their original positions. |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | The Court applied established equity principles—no straitjacket formula for readiness and willingness; mutual defaults require restoring parties; unjust enrichment must be prevented. |
| Facts as Summarised by the Court |
|
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All courts |
What’s New / What Lawyers Should Note
- “Readiness and willingness” is a case-specific inquiry; no fixed checklist applies.
- Even where both parties default, equity demands restoration to original positions and disfavours forfeiture leading to unjust enrichment.
- After prolonged delays, courts may refuse specific performance yet adjust deposits to achieve fairness.
- Lump-sum adjustments of earnest money can replace forfeiture orders in appropriate cases.
Summary of Legal Reasoning
- Failure of Readiness and Willingness: Appellant could not show financial capacity to pay the balance on the due date nor appear before the Sub-Registrar.
- No Straitjacket Formula: Citing prior precedents, the Court reaffirmed that readiness and willingness must be judged on factual matrices, not a uniform test.
- Equity and Unjust Enrichment: Both parties defaulted; equity requires preventing unjust enrichment and restoring parties as far as possible.
- Adjustment of Deposits: Rather than outright forfeiture of earnest money, a lump-sum payment of Rs. 3 Crores was ordered to balance equities and end protracted litigation.
Arguments by the Parties
Appellant / Petitioner
- Demonstrated readiness and willingness through past payments and capacity.
- Respondents also defaulted, entitling appellant to specific performance.
Respondents
- Appellant lacked financial wherewithal and did not appear on the due date.
- Entitled to forfeit earnest money and refuse specific performance.
Factual Background
In January 2008, the appellant and respondents executed an Agreement to Sell a property in Delhi for Rs. 6.11 Crores, with Rs. 90 lakhs paid by the appellant. The Trial Court granted specific performance in February 2021. On first appeal, the High Court upheld that decree, but this Court remitted the matter for fresh consideration. In September 2025, the High Court set aside the decree, forfeited the earnest money, and ordered partial refund. The appellant’s further appeal led to the present decision.
Alert Indicators
- ✔ Precedent Followed