Buyer Can’t Claim Property if Full Payment Is Not Made on Time: SC

The Supreme Court has held that specific performance, being an equitable relief, can only be granted to a party that consistently demonstrates readiness, willingness and financial capacity to fulfil its contractual obligations, ruling that a purchaser who fails to pay the balance sale consideration within the agreed time cannot seek enforcement of the agreement.

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 filed against a Lahore High Court ruling in a dispute over the sale of a five-kanal and four-marla property in Sialkot.

According to the judgment, under an agreement executed on March 11, 2014, purchaser Amjad Javed had paid Rs. 800,000 as earnest money, while the remaining sale consideration of Rs. 6.48 million was to be paid by July 27, 2014.

The court observed that the agreement expressly provided that the earnest money would be liable to forfeiture if the balance amount was not paid within the stipulated period. It held that such a clause made time an essential term of the contract, making 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 balance sale consideration in court and repeatedly sought more time. The trial court eventually dismissed the suit.

The apex court held that had the purchaser genuinely been ready and willing to perform his part of the contract, he would have complied with the court’s directions and deposited the outstanding amount.

It emphasised that a mere assertion in pleadings of readiness and willingness was not enough. 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.

According to the judgment, a purchaser cannot keep a seller indefinitely bound to a contract while failing to fulfil his own obligations.

The court also noted that the purchaser deposited the balance amount nearly three and a half years later, but held that this did not improve his case because both the contractual deadline and the timelines fixed by the court had long expired.

Concluding that the purchaser’s conduct reflected a lack of 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.