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Kalawati (D) Thr.LRs. v. Rakesh Kumar

Civil Appeal · 2018 INSC 161Decided 16 Feb 2018
Civil Appeal No. 2244 of 2018
Justice Madan B. Lokur · Justice Deepak Gupta

Background

In 1986, Rakesh Kumar entered into an agreement to purchase land in Mehrauli, Delhi from Kalawati and others for Rs.1,32,000 per acre, paying Rs.30,000 as advance. When the sellers allegedly failed to obtain a required "no objection certificate," he sued for specific performance in 1987; the trial court dismissed the suit in 2013 (after decades of delay) on the ground that Rakesh Kumar lacked the funds to pay the balance and was therefore not "ready and willing" to perform, but the Delhi High Court reversed this and decreed specific performance in his favour.

Decision Breakdown

The Supreme Court restored the trial court's view, holding that a plaintiff seeking specific performance must prove continuous readiness and willingness, including financial capacity, throughout the litigation, not merely good intentions. The evidence showed Rakesh Kumar had low income, a modest bank balance, and had borrowed money only for his business rather than for the land purchase, showing he could not have afforded both. The Court found the contractual clause about a "no objection certificate" too vague to excuse the buyer's own lack of readiness, and held the High Court erred in overturning the trial court's factual finding. The appeal was allowed, the High Court's decree set aside, and the original dismissal of the suit restored, with no costs awarded.

Lesson Learnt

In a suit for specific performance of a contract to sell property, merely wanting to go through with the deal is not enough: the buyer must prove they actually had the financial means to pay the balance price at all relevant times, from the agreement date right up to the court's decision.

Official source (sci.gov.in)View Judgment (PDF)

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