The Supreme Court has ruled that the remedy of specific performance is an equitable relief that can only be granted to a party that continuously demonstrates readiness, willingness and financial capacity to fulfil its contractual obligations.
In a detailed judgment approved for reporting, a two-member bench comprising Justice Shakeel Ahmad and Justice Mian Gul Hassan Aurangzeb disposed of civil appeals arising from a Lahore High Court judgment in a property dispute involving the sale of a five-kanal and four-marla property in Sialkot.
According to the judgment, an agreement executed on March 11, 2014, showed that purchaser Amjad Javed had paid Rs800,000 as earnest money, while the remaining sale consideration of Rs6.48 million was to be paid by July 27, 2014.
The court noted that the agreement expressly provided for forfeiture of the earnest money if the balance amount was not paid within the stipulated period. It held that this clause made time an essential term of the contract, rendering it mandatory for the purchaser to complete payment within the agreed timeframe.
The purchaser later filed a suit for specific performance, seeking enforcement of the agreement. However, despite being granted two opportunities by the trial court, he failed to deposit the remaining sale consideration and instead repeatedly sought further time. The trial court consequently dismissed the suit.
The apex court observed that had the purchaser genuinely been ready and willing to perform his part of the contract, he would have complied with the trial court’s directions and deposited the outstanding amount.
It emphasised that a mere assertion in pleadings that a party was ready and willing to perform its obligations was not sufficient. A claimant, the judgment said, must also establish actual financial ability and seriousness in completing the transaction.
The court further observed that, in present-day circumstances where property values rise rapidly, courts cannot mechanically apply the traditional principle that time is generally not of the essence in transactions involving immovable property.
It held that a purchaser could not keep a seller indefinitely bound to a contract without fulfilling his own obligations.
The judgment also noted that the purchaser deposited the balance amount nearly three and a half years later, but said this did not improve his position because both the contractual deadline and the timelines fixed by the court had long expired.
Concluding that the purchaser’s conduct did not reflect the diligence, readiness and willingness required for the grant of equitable relief, the Supreme Court held that he was not entitled to enforcement of the agreement.
Upholding the Lahore High Court’s judgment, the apex court dismissed the purchaser’s appeal.
