Apex court rules specific performance cannot be granted to purchasers who fail to demonstrate timely payment and financial readiness
ISLAMABAD: The Supreme Court of Pakistan has reaffirmed that buyers seeking enforcement of property agreements must strictly comply with contractual obligations, ruling that a purchaser who failed to pay the agreed sale consideration within the stipulated period cannot claim the equitable relief of specific performance.
In a significant judgment involving a property dispute in Sialkot, the apex court dismissed an appeal filed by purchaser Amjad Javed and upheld the decision of the Lahore High Court (LHC), holding that specific performance is available only to parties who continuously demonstrate readiness, willingness and financial capacity to fulfil their contractual commitments.
According to the detailed judgment approved for reporting, a two-member bench comprising Justice Shakeel Ahmad and Justice Mian Gul Hassan Aurangzeb observed that courts exercising equitable jurisdiction must examine not only the contractual terms but also the conduct of the parties seeking relief.
The dispute centred on a property measuring five kanals and four marlas. Under a sale agreement executed on March 11, 2014, the purchaser paid Rs800,000 as earnest money and agreed to pay the remaining Rs6.48 million by July 27, 2014.
The Supreme Court noted that the agreement expressly provided for forfeiture of the earnest money in case the purchaser failed to pay the balance amount within the agreed timeframe. The presence of such a clause clearly established that time was an essential component of the contract, requiring strict adherence to the payment schedule.
After failing to make the remaining payment, the purchaser approached the court seeking specific performance of the agreement. During the proceedings, the trial court granted him two opportunities to deposit the outstanding amount. However, he failed to comply on both occasions and instead sought repeated extensions, eventually leading to the dismissal of his suit.
The apex court observed that a genuinely willing and financially capable purchaser would have complied with the court’s directions and deposited the balance sale consideration without delay. The bench stressed that merely asserting readiness and willingness in legal pleadings is not enough to obtain equitable relief.
“The claimant must establish actual financial capability and demonstrate a genuine intention to perform the contract,” the judgment stated.
The court also took note of evolving realities in Pakistan’s property market, observing that rapidly increasing real estate prices make it unreasonable to keep sellers indefinitely bound by agreements where purchasers fail to honour their commitments within agreed timelines.
Rejecting the purchaser’s argument that he had eventually deposited the amount nearly three and a half years later, the court ruled that such a delayed payment could not revive contractual rights that had already lapsed due to the expiry of both contractual and court-imposed deadlines.
The judgment concluded that the purchaser’s conduct reflected a lack of diligence, financial readiness and willingness to perform his obligations, making him ineligible for the equitable remedy of specific performance.
By dismissing the appeal and affirming the Lahore High Court’s ruling, the Supreme Court reinforced the principle that parties seeking enforcement of contracts must not only express willingness to perform but must also demonstrate timely compliance and financial capability throughout the transaction and subsequent legal proceedings.
The ruling is expected to serve as an important precedent in property disputes, particularly in cases involving delayed payments and claims for specific performance of sale agreements.
