The Supreme Court of India has held that the grant of specific performance was not an equitable relief after the lapse of more than seventeen years from the execution of an agreement to sell, reiterating that there is no fixed or straitjacket formula for determining readiness and willingness and that the issue must be examined on the facts and circumstances of each case. Modifying the Delhi High Court’s order, the Court directed payment of a lump sum of ₹3 crore to the plaintiff to adjust equities and prevent unjust enrichment.
The appeal arose from a judgment of the Delhi High Court dated September 3, 2025 in RFA (OS) No. 12 of 2021. The appellant, Subhash Aggarwal, had filed a suit for specific performance on the basis of an Agreement to Sell dated January 22, 2008 for purchase of a 300 square yards property bearing No. C-20, Ashok Vihar, Phase-I, Delhi, for a total sale consideration of ₹6.11 crore.
Under the agreement, ₹60 lakh was paid as earnest money on the date of execution, and a further sum of ₹30 lakh was paid on March 24, 2008. The respondents accepted receipt of a total amount of ₹90 lakh.
By judgment dated February 15, 2021, the Trial Court decreed the suit for specific performance, holding that the plaintiff had demonstrated readiness and willingness to perform the contract and that the defendants had defaulted in discharging their contractual obligations.
The defendants’ appeal was initially dismissed by the High Court on April 12, 2021, with the Court noting that the plaintiff had the wherewithal to make the balance payment. That order was later set aside by the Supreme Court in SLP No. 12465 of 2021, and the matter was remanded to the High Court for fresh consideration.
Upon rehearing, the High Court set aside the decree for specific performance, dismissed the suit, permitted forfeiture of the earnest money of ₹60 lakh, and directed refund of the additional ₹30 lakh along with interest at the rate of 9 percent per annum from March 24, 2008. Aggrieved by this decision, the plaintiff approached the Supreme Court.
A Bench comprising Justice Vikram Nath and Justice Sandeep Mehta examined whether the plaintiff had proved readiness and willingness to perform his part of the contract.
The Court agreed with the High Court’s finding that the plaintiff had failed to establish readiness and willingness, noting that he had not been able to demonstrate the necessary financial wherewithal to make payment of the balance consideration of ₹5.21 crore on the due date of May 10, 2008. It also recorded that the plaintiff did not visit the office of the Sub-Registrar on the said date.
At the same time, the Court observed that the respondents had also not fulfilled their contractual obligations, particularly with regard to obtaining mutation and securing conversion of the suit property from leasehold to freehold.
Reiterating settled law, the Court observed that there is no straitjacket formula with regard to readiness and willingness and that the same has to be construed with respect to the facts and circumstances of each case.
Considering the facts of the case and the passage of more than seventeen years since the execution of the agreement, the Court agreed that the grant of specific performance was not an equitable relief at this stage.
The Court further emphasized 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. It held that directing forfeiture of the earnest money would result in an equitable windfall to the respondents.
To do complete justice and adjust the equities between the parties, the Supreme Court modified the High Court’s judgment and directed the respondents to pay a lump sum amount of ₹3 crore to the appellant within four weeks from the date of the order. The Court observed that this would fully restitute the appellant, avoid further complications relating to the contract, and bring quietus to a dispute that had remained pending for over a decade.
The appeal was partly allowed. The judgment of the Delhi High Court was modified to the extent of directing payment of ₹3 crore to the appellant, and all pending applications stood disposed of.
