High Court Upholds Trial Court's Dismissal in Property Contract Dispute
Madhya Pradesh High Court affirms lower court's decision citing lack of readiness and willingness by appellant to fulfill contract obligations.
In a notable judgment delivered on September 8, 2025, the Madhya Pradesh High Court at Gwalior, presided by Justice G. S. Ahluwalia, upheld the decision of the 1st Additional District Judge, Dabra, which dismissed a suit for specific performance filed by Manoj Kumar Ahuja against the legal representatives of Gurmej Singh, among others. The case revolved around a dispute concerning a contract for the sale of a substantial tract of land in Dabra, District Gwalior.
The appellant, Manoj Kumar Ahuja, had sought specific performance of a contract asserting that he had entered into an agreement with the defendants to purchase the land at a predetermined rate, having already paid an advance sum of Rs. 50,000. Ahuja claimed readiness and willingness to perform his part of the contract, offering to redeem a mortgage on the property which had been undisclosed by the sellers at the time of the agreement.
The crux of the appeal hinged on whether Ahuja demonstrated both readiness and willingness to execute his contractual obligations. The judgment meticulously examined the evidence and arguments presented by both parties. Justice Ahluwalia noted that Ahuja failed to provide sufficient documentary evidence, such as bank statements or income tax returns, to substantiate his financial capacity to pay the remaining consideration amount and cover registration charges. Furthermore, the court observed discrepancies in Ahuja's claims regarding the purchase of stamp papers for the execution of the sale deed, suggesting inconsistencies in his preparedness to finalize the transaction.
The defendants countered Ahuja's claims, maintaining that they were ready and willing to execute the sale deed, but it was Ahuja who lacked the necessary funds and failed to appear at the Sub-Registrar's office on the stipulated dates. The court found these contentions supported by the evidence, including applications made by the defendants to the Sub-Registrar expressing their readiness to proceed with the sale.
Additionally, the judgment addressed the issue of misrepresentation. Ahuja alleged that the defendants misrepresented the status of the property, concealing its encumbrance. While the court acknowledged this claim, it emphasized that Ahuja's decision to continue pursuing the agreement despite the alleged misrepresentation negated his ability to void the contract under Section 19 of the Indian Contract Act, 1872.
Ultimately, the High Court affirmed the trial court's findings, concluding that Ahuja did not sufficiently prove his readiness and willingness to perform his contractual obligations, thereby rendering the suit for specific performance untenable. The judgment underscored the necessity for plaintiffs in specific performance suits to unequivocally demonstrate both financial capability and genuine intent to complete the transaction.
The appellate court's decision to dismiss the appeal serves as a reminder of the stringent requirements placed on parties seeking specific performance in property contracts, highlighting the importance of unequivocal evidence of readiness and willingness to fulfill contractual obligations.
Bottom Line:
Specific Performance of Contract - Plaintiff must prove readiness and willingness to perform his part of the contract. Readiness refers to financial capability, while willingness indicates intent to perform the agreement. Failure to demonstrate both elements results in dismissal of the suit for specific performance.
Statutory provision(s): Civil Procedure Code, 1908 Section 96, Contract Act, 1872 Section 19, Income Tax Act Section 269SS
