ELP Arbitration Weekly Update

This week, we have analyzed the Supreme Court’s ruling in Kalawati v. Rakesh Kumar[1].

In Kalawati, the Court examined the provisions of section 16 (c) of the Specific Relief Act, 1963, and shed light on the true meaning of “readiness and willingness” of a party to perform his obligations under an agreement when seeking specific performance of an agreement. The dispute arose out of an agreement to sell a plot of land in New Delhi, wherein the buyer instituted a suit for grant of a decree of specific performance of the seller’s obligations under the agreement and for possession of the suit property.

The Court examined the factual aspects and held that the party seeking specific relief did not have the necessary funds to perform his obligations under the agreement, and was therefore not ready and willing to perform under the agreement. In this decision, the Court has reiterated the settled position that while it may not be essential to deposit the consideration amount in court unless directed to do so, the party seeking specific performance must be able to prove that he has the financial means and capacity to perform his part of the contract.