Ritu Saxena v. J.S. Grover & Anr.
Background
The appellant had entered into an agreement to purchase a Delhi flat for Rs. 50 lakh from the respondents, paying Rs. 1 lakh as advance. When the sale was not completed, she sued for specific performance (a court order forcing the sellers to complete the sale), claiming she had a bank loan approved and the financial capacity to pay the balance. The Trial Court and the High Court both found she had failed to execute the formal agreement needed for loan disbursal and had not proved she actually had the funds or genuine readiness and willingness to complete the purchase, though they awarded her a refund of the Rs. 1 lakh advance with interest.
Decision Breakdown
The Supreme Court held that the only real evidence of her financial capacity was a conditional loan sanction letter that was never acted upon because a required stamp-paper agreement was never executed, and that her and her husband's bare claims of having Rs. 80 lakh annual income were unsupported by any bank statements, income tax records, or other documents. The Court distinguished this from its earlier ruling in A. Kanthamani, where concurrent findings favoring the buyer had not been reappreciated: here, both lower courts had found against the buyer on facts, and self-serving oral statements alone could not establish readiness and willingness to pay. The appeals were accordingly dismissed, confirming that specific performance was rightly refused, with a separately deposited Rs. 3.5 crore (deposited under an earlier court order) to be returned to the appellant with interest.
Lesson Learnt
To win a claim for specific performance of a property sale agreement, a buyer must prove actual financial capacity and genuine readiness to pay with real documents (bank statements, completed loan paperwork, etc.): bare oral claims of having sufficient funds are not enough, even if a bank had tentatively approved a loan.