Suits for specific performance of agreements to sell live and die on a single statutory phrase: the plaintiff's continuous readiness and willingness to perform under Section 16(c) of the Specific Relief Act, 1963. In RFA 330/2021, decided on 16 October 2026, the Delhi High Court dismissed a buyer's appeal against the refusal of specific performance of a 2007 agreement for a Shalimar Village property priced at Rs 30 lakh, because the buyer's bank statements — produced only for a period after the suit was filed — did not show that he had the funds when performance fell due. But the judgment cuts both ways: the court held the agreement was never validly terminated, rejected the seller's claim to keep the Rs 4.15 lakh paid under it, and affirmed the refund with 6% interest, applying the settled rule that forfeiture beyond a reasonable amount requires proof of actual loss.
The transaction and the suit
By an Agreement to Sell dated 1 November 2007, the plaintiff agreed to purchase a 300 square yard property in Village Shalimar, Delhi for Rs 30 lakh, and paid Rs 4,15,000 in instalments between 2007 and 2011. The property was entangled in probate proceedings; Letters of Administration issued only in February 2011, and the seller received possession in May 2013. The buyer sent a legal notice in May 2013 and sued for specific performance in July 2013. The trial court refused specific performance for want of readiness and willingness but decreed refund of Rs 4,15,000 with 6% interest. Only the buyer appealed.
What the High Court decided
Capacity unproved
The only bank statement on record covered May–June 2013, after the suit was filed — confirming the absence of funds at the relevant time in 2010–2011. Specific performance was rightly refused.
Termination disproved
The seller's plea that the buyer terminated the agreement in January 2012 had no evidentiary support; the trial court's acceptance of it was reversed.
No forfeiture
With not an iota of evidence of loss, the seller could not retain the Rs 4.15 lakh. Sections 73–74 of the Contract Act and the Kailash Nath principle governed.
No windfall either
The buyer's claim to double the amount failed for want of pleaded and proved loss; refund with 6% interest from 30 May 2013 till realisation was adequate.
The legal architecture
| Provision | Role in the case |
|---|---|
| Section 16(c), Specific Relief Act | Bar on relief without proof of continuous readiness and willingness |
| Sections 20–22, Specific Relief Act | The discretionary and compensatory framework around specific performance (as it stood for this pre-2018 agreement) |
| Section 73, Contract Act | Compensation for loss actually suffered from breach |
| Section 74, Contract Act | Reasonable compensation where a sum is named — no penalty, no windfall; forfeiture needs proof of loss |
A note on timing: for agreements after the Specific Relief (Amendment) Act, 2018, specific performance is the rule rather than a discretion, but Section 16(c) readiness and willingness survives untouched — so the evidentiary discipline this judgment applies remains fully current.
Practical guidance
Buyers who intend to enforce an agreement to sell should build the financial record as the transaction runs: bank balances or sanction letters contemporaneous with each stage, written calls on the seller to perform, and prompt protest when the seller delays. Litigation reconstructed years later from a single post-suit bank statement will not carry Section 16(c). Sellers, conversely, should not assume that a failed specific performance suit converts the advance into their money: forfeiture requires a contractual stipulation, reasonableness, and — for anything beyond nominal earnest — proof of actual loss, such as a documented resale at a lower price.
The judgment also illustrates a quiet point of appellate strategy: the seller did not appeal the refund decree, yet the buyer's appeal allowed the court to correct the termination finding while affirming the outcome. Parties should assess, at the first-appeal stage, which findings — not just which outcomes — they can live with.
This article summarises a Delhi High Court first appeal for general information. Specific performance litigation is document-driven and outcome depends on the complete record; nothing here is legal advice.
Frequently Asked Questions
What does "readiness and willingness" actually require?
Readiness is financial capacity; willingness is conduct. A buyer must show, for the whole period from agreement to suit, that funds were available or arrangeable and that he pressed for performance. Producing bank statements only for the months after filing the suit, as here, invites the inference that the money was not there at the relevant time.
Why could the seller not forfeit the Rs 4.15 lakh?
Under Sections 73 and 74 of the Contract Act, compensation follows loss. Following the Supreme Court's rule in Kailash Nath Associates, earnest money can be forfeited only where the contract so provides and the forfeiture is reasonable, and amounts beyond nominal earnest cannot be retained without proof of actual loss. The seller led no evidence of any loss, so the refund with interest stood.
The buyer asked for double the amount — why was that refused?
The claim for Rs 8.30 lakh rested on no pleaded or proved loss beyond the deprivation of the money itself. The court held that a refund with interest adequately compensates that deprivation.
What is the scope of a Regular First Appeal?
An RFA under Section 96 CPC is a full rehearing on facts and law, and the Delhi High Court re-examined both the readiness finding and the termination finding — affirming one and reversing the other. That is the value of a first appeal: each finding of the trial court is open to challenge on the evidence.