Mohammed Khaleel v. Jayamma (2026): why fixed deposits opened years after suit cannot prove readiness and willingness

The transaction and the twelve-year litigation

By an agreement to sell dated 20 December 1990, the original plaintiff, Mohammed Khaleel, agreed to buy from the defendant Jayamma a vacant site measuring 100 feet by 78 feet for a total consideration of ₹3,00,000. He paid ₹25,000 as earnest money, and it was agreed that the sale deed would be registered within four months, with the balance of ₹2,75,000 to be paid before the Sub-Registrar at the time of registration. The defendant handed over the original title documents.

The transaction never completed. A cluster of notices followed in 1991 and 1992 — the plaintiff pressing for demarcation, formation of an approach road, and permission under the Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA); the defendant, by reply dated 26 April 1991, rescinding the agreement. The plaintiff filed his suit for specific performance, O.S. No. 432 of 1993, before the Principal Civil Judge (Senior Division), Mysore, only on 20 December 1993. He died during the suit; his legal representatives carried it forward.

The Trial Court decreed specific performance on 31 January 2002, holding that possession had been delivered, that time was not of the essence, and that the plaintiff was ready and willing. The Karnataka High Court reversed on 9 December 2009, finding that the plaintiff had failed to prove readiness and willingness, that his failure to file the ULCRA affidavit told against him, and that his laches of two years and nine months in filing — though within limitation — was critical. The Supreme Court, in a judgment authored by Prashant Kumar Mishra, J. and concurred in by N.V. Anjaria, J., dismissed the appeal.

The statutory mandate: readiness and willingness as a continuing condition

The Court anchored its analysis in the pre-amendment Section 16(c). Because the agreement and the suit long predated the Specific Relief (Amendment) Act, 2018, the old regime governed — the one in which specific performance is an equitable, discretionary remedy rather than the near-mandatory entitlement the amendment later created.

Section 16(c), the Court explained, required a person seeking specific performance to specifically aver and prove continuous readiness and willingness to perform his obligations, failing which he is disentitled to the relief. The two limbs are distinct: "readiness" refers to financial capacity, and "willingness" reflects the conduct and intention of the party. Both must cumulatively be established.

The Court gathered the settled authorities. In N.P. Thirugnanam v. R. Jagan Mohan Rao (1995) 5 SCC 115 it had held that continuous readiness and willingness is a condition precedent, to be judged from the plaintiff's conduct both before and after the suit, and that "right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract." His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar (1996) 4 SCC 526 drew the readiness/willingness distinction and stressed that documentary proof of funds must exist. Umabai v. Nilkanth Dhondiba Chavan (2005) 6 SCC 243 treated the finding as a mandatory requirement. And Man Kaur v. Hartar Singh Sangha (2010) 10 SCC 512 made the point sharply: even a proven breach by the defendant will not rescue a plaintiff who cannot show he had the balance consideration, or the capacity to arrange it, when the contract had to be performed.

The fixed deposits that came too late

On the facts, the appellants' central plank was Exhibit-29 — four fixed deposit receipts of ₹70,000 each, totalling ₹2,80,000, said to be enough to meet the balance consideration of ₹2,75,000. The High Court had wrongly counted only two of them; but that arithmetic correction did not save the claim, because of the dates. The four FDRs were dated 4 October 1999, 22 November 1999, 3 April 2001 and 23 August 2001 — all created several years after the suit was instituted on 20 December 1993.

The relevant period, the Court held, ran from the date of the agreement to the filing of the suit. There was no material to show the plaintiff had the balance consideration available at the execution of the agreement, within the four-month performance window, or even at the suit's institution in 1993. Deposits opened between 1999 and 2001 could not be read back to establish readiness when it mattered. The Court added that a plaintiff need not physically deposit the money in court — but he must place reliable evidence showing he possessed sufficient funds to complete the transaction at the relevant time.

Willingness fared no better. On the ULCRA permission — required from both parties — even the testimony of PW-1 showed the plaintiff had not furnished the necessary affidavit or forms, remaining passive while he waited for the defendant to act. That conduct, the Court held, failed to establish continuous willingness.

Delay: within limitation is not the same as with promptitude

The second strand addresses the effect of delay on discretionary relief. Specific performance is equitable, and the conduct of the party seeking it must be beyond reproach — which means approaching the court not merely within the limitation period but promptly, with diligence.

Here the Court relied on Rajesh Kumar v. Anand Kumar (2024) 13 SCC 80 — a decision, it noted, delivered "speaking through one of us (Prashant Kumar Mishra, J.)" — which had gathered the line beginning with K.S. Vidyanadam v. Vairavan (1997) 3 SCC 1. The teaching is that the three-year limitation period does not convert every suit filed within it into a decree: courts frown on suits not filed soon after the breach or refusal, and a purchaser cannot sit on his rights for a year or two and still expect the discretionary remedy. Saradamani Kandappan v. S. Rajalakshmi (2011) 12 SCC 18 and Atma Ram v. Charanjit Singh (2020) 3 SCC 311 reinforced that unexplained delay tells against the plaintiff.

Applied to the facts, the defendant had given a categorical refusal by her reply of 26 April 1991, yet the plaintiff filed suit only on 20 December 1993 — after two years and nine months, at the fag end of the limitation period. That delay, combined with the absence of proven financial readiness and the passivity on ULCRA permission, sealed the outcome.

Why it matters

The judgment is a clean restatement of two connected principles under the pre-2018 law. First, readiness is a question of proof anchored to a period — from agreement to suit — and evidence of funds generated afterwards, however genuine, cannot be projected backwards to fill the gap. A litigant who assembles his financial position only once the case is on foot has, on the statute's own terms, missed the moment that counts. Second, limitation is a ceiling, not a licence: a plaintiff who waits, even inside the three-year window, exposes himself to the discretionary refusal that equity reserves for the tardy. For agreements predating 1 October 2018, both propositions remain live — the older, discretionary calculus of readiness, willingness and promptitude still decides who gets a decree.

Related on Valkya

• Katta Sujatha Reddy v. Siddamsetty Infra: the prospectivity of the 2018 amendment
• Satyabrata Ghose v. Mugneeram Bangur: frustration as a rule of positive law
• Esha Bhattacharjee: the condonation-of-delay checklist

Sources

• Supreme Court of India, judgment in Mohammed Khaleel (D) Thr. LRs & Ors. v. Jayamma, 2026 INSC 651 (23 June 2026)
• Specific Relief Act, 1963 (India Code)
• Urban Land (Ceiling and Regulation) Act, 1976 (India Code)