Specific performance requires a subsisting contract, proven readiness and willingness, and equitable entitlement before relief can be granted.

A suit for specific performance was held not maintainable where the agreement of sale had been validly terminated and no declaratory relief was sought to challenge that termination. The Court also found that the plaintiff failed to prove continuous readiness and willingness to perform, and treated the contractual time stipulation as binding on the facts. As specific performance is an equitable and discretionary remedy, relief was refused because the plaintiff had defaulted on the time-bound contract and had not satisfied the statutory prerequisites. The subsequent purchaser was not disqualified on the basis of the terminated prior agreement, and the High Court's reversal of the trial court was set aside.

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Issues: (i) Whether the suit for specific performance was maintainable without a declaratory prayer challenging termination of the agreement of sale; (ii) Whether the plaintiff had established readiness and willingness to perform the contract and whether time was of the essence; (iii) Whether the decree for specific performance could be sustained in the exercise of discretion under the Specific Relief Act; (iv) Whether the subsequent purchaser could be treated as a bona fide purchaser and whether the High Court was justified in reversing the trial court.

Issue (i): Whether the suit for specific performance was maintainable without a declaratory prayer challenging termination of the agreement of sale.

Analysis: The agreement contained a fixed period for completion, extended by a further limited period. The vendors issued notice terminating the agreement after the plaintiff failed to perform within the extended time. Since the plaintiff did not seek a declaration that the termination was bad in law, the agreement was treated as no longer subsisting for the purpose of a suit for specific performance.

Conclusion: The suit was not maintainable on the basis of the terminated agreement, and this issue was decided in favour of the appellant.

Issue (ii): Whether the plaintiff had established readiness and willingness to perform the contract and whether time was of the essence.

Analysis: The contractual stipulation required completion within the agreed period, and the Court treated the stipulation as binding in the facts of the case. The correspondence showed that the plaintiff sought repeated extensions and did not establish that he was ready with the balance consideration or that he had performed the agreed obligations within time. The conduct and surrounding circumstances did not support the necessary continuous readiness and willingness.

Conclusion: Readiness and willingness were not proved, and the time stipulation was enforced against the plaintiff. This issue was decided in favour of the appellant.

Issue (iii): Whether the decree for specific performance could be sustained in the exercise of discretion under the Specific Relief Act.

Analysis: Specific performance being an equitable and discretionary relief, the Court held that discretion could not be exercised in favour of a party who had not complied with the contractual timeline and had failed to establish the statutory prerequisites. The contractual forfeiture/compensation arrangement and the plaintiff's default were relevant to the refusal of relief.

Conclusion: The High Court erred in granting specific performance, and the discretionary relief was held unsustainable. This issue was decided in favour of the appellant.

Issue (iv): Whether the subsequent purchaser could be treated as a bona fide purchaser and whether the High Court was justified in reversing the trial court.

Analysis: Once the earlier agreement stood terminated and was not enforceable, the subsequent sale could not be defeated on the premise of the prior agreement. The High Court's view that the subsequent purchaser was not bona fide was rejected, and the trial court's findings were restored after holding that the High Court had erred in reappreciating the material.

Conclusion: The subsequent purchaser was not disqualified on the basis of the prior terminated agreement, and the High Court's reversal was set aside. This issue was decided in favour of the appellant.

Final Conclusion: The decree for specific performance granted by the High Court was set aside and the trial court's decree was restored, with the result that the appeal succeeded and the plaintiff was denied specific performance.

Ratio Decidendi: A suit for specific performance cannot succeed where the contract has been validly terminated, the plaintiff has not proved continuous readiness and willingness, and the equitable discretion under the Specific Relief Act does not favour enforcement of a defaulted and time-bound agreement.

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