Advance Paid, Property Lost: Karnataka HC on Readiness and Willingness in Sale Agreements

On June 8, 2011, a buyer in Bhadravathi signed an agreement to purchase a property for Rs 7,50,000 and paid Rs 2,50,000 as advance. According to the buyer, the agreement fixed no date for completion: the seller was to get a survey sketch and other records, and the buyer would then pay the balance and take a sale deed. The sale never happened. Fifteen years later, on October 16, 2026, the Karnataka High Court confirmed that the buyer would get his advance back with 6 percent interest, but not the property.

The judgment, in Sri Hoor Pasha v. Sri Nagendra Rao and Others, Regular Second Appeal No. 638 of 2019, was delivered by Justice S.R. Krishna Kumar. The property is in Shivamogga district, but the rules it applies under the Specific Relief Act, 1963 are the same for anyone in Bengaluru who pays an advance on a site or house and later wants the court to force the sale.

The short answer. The High Court dismissed the buyer's second appeal, holding that "no question of law, much less substantial question of law arises". Both lower courts had found the sale agreement and the Rs 2,50,000 advance proved, but refused specific performance because the buyer had not proved he was ready and willing to complete the purchase, and because a decree would cause the seller "more comparative hardship" since the property was worth much more than Rs 7,50,000. The seller had already deposited Rs 3,83,750 in court, which the court ordered released to the buyer. The trade-off: proving the agreement was not enough; the buyer needed proof of his own readiness, and without it he got money, not land.

What happened between 2011 and 2026?

According to the judgment, the buyer said that since the seller did not come forward to complete the sale, he issued legal notices dated 26.07.2013 and 09.10.2014 and then filed a suit for specific performance. The seller denied the claim, contending that "the transaction between the parties was a loan transaction and not a sale transaction" and that the agreement was obtained by fraud and misrepresentation. The seller also disputed readiness and willingness and raised limitation.

The trial court at Bhadravathi decided on 27.04.2017 that the agreement and advance were proved, but refused specific performance and granted the alternative relief of refund with interest at 6 percent a year from the date of suit. The first appellate court dismissed the buyer's appeal on 19.11.2018. The buyer then filed a second appeal in the High Court.

The trial court had framed six issues, covering whether the agreement and advance were proved, whether the buyer proved readiness and willingness, limitation, whether specific performance should be granted, and whether the buyer was entitled to the alternative relief of recovering Rs 2,50,000 with interest. The buyer examined himself and two witnesses and produced 14 documents; the seller examined himself and two witnesses and produced three documents. On the first issue the buyer won; on readiness and specific performance he lost.

Why wasn't proving the agreement enough?

Because specific performance is discretionary, and the law requires the buyer to show continuous readiness and willingness to complete the purchase. The High Court said the requirement "to continuously perform his part of the contract and demonstrate continuous readiness and willingness in terms of Section 16(c) of the Act is no longer res integra".

On the facts, the court said that "except producing the legal notice issued almost after two years from the date of the alleged agreement of sale, the plaintiff had not demonstrated by legal and acceptable evidence that he had the balance sale consideration / requisite funds to pay the balance sale consideration or capacity to raise the funds nor any steps had been taken by him to call upon the respondent to perform his part of the contract by obtaining a survey sketch."

Didn't the seller's own delay help the buyer?

No. The buyer argued that the seller had a reciprocal obligation to obtain a survey sketch first. The court said that "merely because there was a mutual and reciprocal obligation cast upon the respondent-defendant to obtain a survey sketch", the seller's inaction could not lead to an inference that the buyer was ready and willing. Readiness and willingness "had to be pleaded and proved by him independent of the conduct of the respondent defendant."

That is an important point for buyers, and one that applies whether the property is a small town plot or a Bengaluru site. Even when a seller's step is pending under the agreement, a buyer who wants specific performance must keep showing, with evidence, that the buyer's side of the bargain is ready to go.

What is comparative hardship, and why did it matter?

Under Section 20 of the Specific Relief Act, as applied by the lower courts in this case, a court can weigh which side would suffer more if specific performance is granted or refused. The trial court found that "the suit property was valued much more than Rs.7,50,000/- as on the date of the agreement", so the seller would be put to "more comparative hardship" by a decree.

The High Court agreed that granting specific performance "would result in more comparative hardship as against the respondent-defendant", while the buyer "would not be put to similar hardship if specific performance was refused" and the advance was refunded with interest. PropNewz has covered another recent Karnataka ruling on refunds in its report on a KIADB payment that did not amount to allotment.

What happens to the money now?

The court noted that "it is an undisputed fact" that the seller deposited Rs 3,83,750 before the trial court on 05.01.2024, together with interest as directed. It said the amount would have been invested in a fixed deposit by the trial court, for the buyer's benefit. It directed the trial court registry to release the entire sum "immediately upon receipt of a copy of this order."

One detail is worth noting. The trial court awarded interest at 6 percent a year from the date of suit, not from the date the advance was paid. The suit was numbered O.S. No. 99/2014, so the period between the 2011 payment and the filing of the suit did not earn interest under the decree. For a buyer, every year of delay before going to court can therefore cost money as well as weaken a claim for the property.

For the buyer, the outcome is a return of the advance with modest interest after fifteen years, rather than the property. For buyers weighing whether to sue for specific performance or accept a refund, the case shows how the evidence of readiness, and the gap between the agreed price and the property's value, can decide which way a court goes. For a contrasting case where good documentation protected a buyer, see PropNewz's report on a Pattanagere site owner's injunction.

What should Bengaluru buyers paying an advance do?

Treat the sale agreement as the start of a record you may need in court. In this case, the seller argued the whole transaction was really a loan, and the buyer was able to defeat that argument because the agreement and payment were proved. The same discipline about evidence would have been needed on readiness. A buyer who wants the property, not a refund, should be able to show at every stage that the money for the balance was available and that the buyer pressed for completion.

1. Insist on a completion date and clear steps for both sides in the sale agreement.
2. Keep bank statements or a loan sanction showing you can pay the balance.
3. Write to the seller promptly, and repeatedly if needed, asking them to complete their steps.
4. Do not wait years before sending a legal notice if the seller stalls.
5. File suit within the limitation period and plead readiness and willingness with evidence.
6. Keep proof of the property's value at the time of the agreement.
7. Take legal advice on whether to seek specific performance or a refund with interest.

Frequently asked questions

What did the Karnataka High Court decide in Hoor Pasha v. Nagendra Rao on October 16, 2026?

Justice S.R. Krishna Kumar dismissed the buyer's second appeal. The trial court and first appellate court had refused specific performance of a 2011 sale agreement and ordered refund of the Rs 2,50,000 advance with 6 percent interest from the date of suit. The High Court found no substantial question of law and confirmed both decrees.

Why did the buyer not get the sale deed despite proving the agreement?

The courts found the agreement and the advance were proved, but held the buyer had not shown he was ready and willing to perform his part. The High Court said that apart from a legal notice issued almost two years later, there was no acceptable evidence that he had or could raise the balance consideration.

What does comparative hardship mean in this case?

The courts found that the property was worth much more than Rs 7,50,000 on the date of the agreement, so granting specific performance would cause more hardship to the seller than refusing it would cause the buyer, who would receive a refund with interest. They relied on Section 20 of the Specific Relief Act.

What should a buyer do after paying an advance under a sale agreement?

Keep proof that you have the balance funds or a loan sanction, respond promptly in writing to every step in the agreement, ask the seller in writing to complete their obligations such as survey sketches, and if the seller delays, take legal advice quickly rather than waiting years before issuing notice or filing suit.

This article summarises a court judgment for general information and is not legal advice.

Last updated 2026-11-07. PropNewz Team.