Holding

The ATS was non‑determinable, the unilateral termination was invalid, the original vendees were ready and willing to perform, and the subsequent purchasers were not bona fide purchasers, so the High Court’s judgment was set aside and the appeals dismissed.

Summary

The original vendors executed an unregistered agreement to sell (ATS) of 354 acres of land to the original vendees in 2000, but later issued a unilateral notice of termination in 2003 citing a pending suit and a vendor's death. The original vendees continued to perform their obligations and sued for specific performance against both the vendors and the subsequent purchasers who bought the land in 2007. The trial court held the termination invalid and dismissed the suit; the High Court reversed that decision, granting specific performance and finding the subsequent purchasers not bona fide. The Supreme Court examined whether a unilateral termination of a non‑determinable ATS is permissible, whether the ATS is determinable under Section 14 of the Specific Relief Act, and whether the subsequent purchasers qualify as bona fide purchasers under Section 19(b). It held that the ATS was non‑determinable, the termination was invalid, the original vendees were ready and willing to perform, and the subsequent purchasers had constructive notice and therefore were not bona fide. Consequently, the High Court’s order was set aside and the appeals were dismissed.

Issues considered

Whether the High Court erred in setting aside the trial court decree and granting specific performance to the original vendees
Whether a unilateral termination of an agreement to sell is permissible absent a determinable contract under Section 14 of the Specific Relief Act, 1963
Whether the ATS dated 28.04.2000 is a determinable contract
Whether a suit for specific performance is maintainable without a declaratory relief challenging the termination
Whether the subsequent purchasers are bona fide purchasers for value without notice under Section 19(b) of the Specific Relief Act
Whether the original vendees satisfied the readiness and willingness requirement under Section 16(c) of the Specific Relief Act
Whether the limitation period under the Limitation Act, 1963 bars the suit for specific performance

Legislation cited

Bhartiya Nyaya Sanhita, 2023s. 2(11)
General Clauses Act, 1897s. 3(22)
Limitation Act, 1963s. Article 54
Specific Relief Act, 1963s. 14, s. 16(c), s. 19(b), s. 27, s. 31

Headnote

Issue for Consideration Whether the High Court committed any error in passing the impugned judgment whereby it allowed the appeals filed by the vendees and set aside the decree passed by the Trial Court, while granting the relief of to Sell executed by the Original Vendors in favour of the Original Vendees and holding the Appellants-Subsequent Purchasers not to be the bona fide purchasers of the subject land for value without notice. Headnotes† Specific Relief Act, 1963 – Unilateral termination of the

Subjects

Specific performanceAgreement to SellUnilateral terminationDeterminable contractBona fide purchaserSection 19(b)Section 16(c)Good faithLimitation periodReadiness and willingness

Judgment

[2025] 12 S.C.R. 43 : 2025 INSC 1298

K.S. Manjunath and Others
v.
Moorasavirappa @ Muttanna Chennappa Batil,
Since Deceased by His Lrs and Other
(Civil Appeal No(s). 13507-13508 of 2025)
10 November 2025
[J.B. Pardiwala* and R. Mahadevan, JJ.]

Issue for Consideration
Whether the High Court committed any error in passing the
impugned judgment whereby it allowed the appeals filed by the
vendees and set aside the decree passed by the Trial Court, while
granting the relief of specific performance of Agreement to Sell
executed by the Original Vendors in favour of the Original Vendees
and holding the Appellants-Subsequent Purchasers not to be the
bona fide purchasers of the subject land for value without notice.

Headnotes†
Specific Relief Act, 1963 – Unilateral termination of the
agreement to sell by one party – Impermissible, except where
the agreement itself is determinable in nature in terms of s.14 –
Original vendors executed an unregistered Agreement to Sell
(ATS) in favour of the original vendees in respect of 354 Acres
of the Subject Land – However, later, they sent a Notice of
Termination to the original vendees thereby terminating the
ATS – Subsequently, original vendors sold the subject land to
the subsequent purchasers – Original vendees filed suit inter
alia seeking specific performance of the ATS against both the
original vendors and the subsequent purchasers – Trial Court
held that the original vendees failed to make good their case
for grant of relief of specific performance – In appeals by the
original vendees, High Court decreed the suit for specific
performance in their favour – Challenge to:
Held: Unilateral termination of the agreement to sell by one party
is impermissible in law except in cases where the agreement
itself is determinable in nature in terms of s.14 – If such unilateral
termination of a non-determinable agreement to sell is permitted

* Author
44 [2025] 12 S.C.R.

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as a defence, then virtually every suit for specific performance
can be frustrated by the defendant by placing an unfair burden
on the plaintiff, who despite performing his part of the obligations
and having showcased readiness and willingness, would require
to also seek a separate declaration that the termination was bad in
law – In such cases, the burden cannot be casted upon the plaintiff
to challenge the alleged termination of agreement – If a contract
itself gives no right to unilaterally terminate the contract, or such
right has been waived, and a party still terminates the contract
unilaterally then that termination would amount to a breach by
repudiation, and the non-terminating party can directly seek specific
performance without first seeking a declaration – In the event it is
found that the termination of agreement to sell by the defendant was
not valid, then such an agreement to sell will remain subsisting and
executable – In the present case, ATS was devoid of any clause
enabling termination for convenience or otherwise empowering
either party to terminate unilaterally – ATS being non-determinable
in nature, no unilateral expression of termination could have lawfully
extinguished the obligations undertaken thereunder – Neither of
the grounds assigned in the notice of termination constituted a
valid basis for terminating the ATS – Grounds cited in the notice of
termination, namely, the subsistence of a status quo order and the
death of one of the original vendors cannot be said to be based on
any default or breach by the original vendees – Original vendees
performed their part by paying a substantial amount and were
also ready and willing to perform the terms of ATS – Termination
of ATS vide notice of termination was unilateral and also not
bona fide – Termination was invalid – ATS continues to remain
alive, subsisting, and executable – Once the alleged termination
of agreement in question is found to be not bona fide and being
done in a unilateral manner, no declaration challenging the alleged
termination is required. [Paras 43, 54, 55, 61, 66]

Specific Relief Act, 1963 – s.19(b) – Requisites to claim
protection under – Bona fides of the subsequent purchasers
in purchasing the subject land – If can claim protection/s.19(b):
Held: To claim protection u/s.19(b), the purchaser must show
three things: (a) purchase for value, (b) payment in good faith,
and (c) absence of notice of the earlier contract – Subsequent
purchasers cannot take shelter u/s.19(b) – They had sufficient notice
of the facts that an ATS dated 28.04.2000 existed; the names and
[2025] 12 S.C.R. 45

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

addresses of the original vendees; that an earnest money amounting
to Rs.2,00,000/- had been paid by the original vendees to the
original vendors; that the original vendors had sought to terminate
the ATS due to their inability to execute the sale deed in favour
of the original vendees on account of a status quo order; that the
date of actual termination could not have coincided with the date of
notice; and that deemed termination would have arose only if the
original vendees had failed to claim the earnest money within one
month; and that despite the issuance of the notice of termination in
2003, the original vendees continued to contest the impleadment
application in the Original Suit No. 30 of 2001 until 2005 – These
circumstances should have reasonably aroused suspicion or at
the very least prompted further inquiry by any prudent bona fide
purchaser – Yet the subsequent purchasers despite having ample
opportunity to become aware of these facts abstained from making
any such inquiries – A subsequent purchaser who relies merely
on the assertions of the vendor or who chooses to remain content
with his own limited knowledge while consciously abstaining from
making further inquiry into the subsisting interests in the property
cannot escape the consequences of deemed notice – Thus, a
purchaser who has before him a document which on its very face
shows the termination to be unilateral and rooted in the vendors’
inconvenience cannot by shutting his eyes claim the benefit of
“good faith” – s.2(11) of the BNS. – s.3(22) of General Clauses
Act, 1897. [Paras 78, 81]

Specific Relief Act, 1963 – Unilateral termination of the
agreement to sell (ATS) by original vendors – If there was a
requirement of seeking a declaration from the court as regards
the legality and validity of the purported termination of the ATS
by the notice of termination issued by the original vendors:
Held: Once the alleged termination of a non-determinable
agreement in question is found to be not for bona fide reasons
and being done in a unilateral manner on part of the defendant,
it cannot be said that any declaration challenging the alleged
termination was required on part of plaintiff – In the present case,
the termination of ATS vide notice of termination was unilateral
and also not bona fide – Neither of the reasons assigned in the
notice of termination constituted a valid basis for terminating the
ATS – Termination was invalid – ATS continues to remain alive,
subsisting, and executable. [Paras 43, 54, 61]
46 [2025] 12 S.C.R.

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Specific Relief Act, 1963 – s.16 (c) – Readiness and willingness
of the Original Vendees to perform the Agreement to Sell (ATS):
Held: s.16(c) requires that a plaintiff must both plead and prove that
he has either performed, or has always been ready and willing to
perform, the essential terms of the contract incumbent upon him –
A party seeking enforcement of a contract must establish that all
conditions precedent have been satisfied, and that he has either
discharged or stood prepared and willing to discharge his obligations
under the contract – Original vendees had performed their part
of the contract to the extent required, and had consistently been
ready and willing to perform their remaining obligations under the
ATS – Appellants directed to execute a sale deed in respect of the
subject land in favour of the Respondent Nos. 15 to 22, respectively
& the Respondent Nos. 1 to 5, respectively, and also hand over
vacant and peaceful possession of the subject land to them within
six months from the date of this judgment, subject to the fulfilment
of directions issued – Further directions issued. [Paras 82, 86, 90]
Specific Relief Act, 1963 – Law on unilateral termination vis-
à-vis determinable contracts, discussed. [Paras 45-51]

Specific Relief Act, 1963 – Failure to challenge the legality
and validity of termination of ATS in the suit – Subsequent
purchasers argued that the Suit filed by the original vendees
inter alia seeking specific performance of ATS was not
maintainable because the original vendees failed to also seek
a declaration from the court in respect of whether the notice
of termination of the ATS was bad in law or invalid:
Held: The same would not preclude this Court to determine if the
suit for specific performance filed by the original vendees was not
maintainable for want of such declaration – Views adopted by the
High Courts on failure to seek declaration, discussed – Principles
of law enumerated. [Paras 30, 43]

Case Law Cited
I.S. Sikandar (Dead) by LRs v K. Subramani & Ors. [2013] 17
SCR 24 : 2013 (15) SCC 27; Sangita Sinha v. Bhawana Bhardwaj
[2025] 4 SCR 551 : 2025 SCC OnLine SC 723 – distinguished.
R. Kandasamy (since dead) & Ors. v T.R.K. Sarawathy & Anr.,
2024 SCC OnLine SC 3377; Annamalai v. Vasanthi, 2025 SCC
OnLine SC 2300; Indian Oil Corporation v. Amritsar Gas Service
[2025] 12 S.C.R. 47

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

and Ors. [1990] Supp. 3 SCR 196 : (1991) 1 SCC 533; Ram
Niwas v. Bano [2000] Supp. 2 SCR 39 : (2000) 6 SCC 685; JP
Builders v. A. Ramadas Rao [2010] 15 SCR 538 : (2011) 1 SCC
429; Satya Jain v. Anis Ahmed Rushdie [2013] 3 SCR 319 : (2013)
8 SCC 131; Manjit Singh v. Darshana Devi, 2024 SCC OnLine
3431 – referred to.
Brahm Dutt v. Sarabjit Singh, 2017 SCC OnLine P&H 5489; Brahm
Dutt v. Sarabjit Singh, 2018 SCC Online SC 3961; Balwinder
Sarpal v. Ram Kumar Bansal, 2022 SCC OnLine P&H 440; S.K.
Ravichandran v. M. Thanapathy, 2022 SCC OnLine Mad 9094;
S.K. Ravichandran v. M. Thanapathy, 2022 SCC Online SC 2369;
Rajesh Sethi S.C. v. P.C. Sethi, 2023 SCC OnLine Del 7010; Kavi
Ghei v. Rohit Vaid, 2024 SCC OnLine Del 6118; A. Kanthudu v.
S. Venkat Narayana, Appeal No. 678/2007; Ajay Narain v. Arti
Singh, (2025) 316 DLT 425; A Murugan and Others v Rainbow
Foundation Ltd. and Ors., 2019 SCC OnLine Mad 37961; Narendra
Hirawat & Co. v. Sholay Media Entertainment Pvt. Ltd., 2020 SCC
OnLine Bom 391; DLF Home Developers Limited v. Shipra Estate
Limited, 2021 SCC OnLine Del 4902; Affordable Infrastructure &
Housing Projects (P) Ltd. v. Segrow Bio Technics India (P) Ltd.,
2022 SCC OnLine Del 4436; Kheoni Ventures (P) Ltd. v. Rozeus
Airport Retail Ltd., 2024 SCC OnLine Bom 773; Durg Singh v.
Mahesh Singh, 2004 SCC OnLine MP 9; Jammula Rama Rao v.
Merla Krishnaveni, 2002 SCC OnLine AP 646 – referred to.
Jones v. Smith (1841) 1 Hare 43 – referred to.

Books and Periodicals Cited
Pollock & Mulla (17th Edition) – referred to.

List of Acts
Specific Relief Act, 1963; General Clauses Act, 1897; Bhartiya
Nyaya Sanhita, 2023.

List of Keywords
Suit for specific performance; Agreement to Sell (ATS); Notice of
termination; Unilateral termination of the agreement to sell by one
party; Unilateral termination of a non-determinable agreement to
sell; Subsequent Purchasers not to be the bona fide purchasers
of the subject land for value without notice; Termination of ATS
unilateral and not bona fide; Termination was invalid; Section 19 (b),
48 [2025] 12 S.C.R.

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Specific Relief Act, 1963; Section 16 (c), Specific Relief Act, 1963;
Readiness and willingness to perform the Agreement; Original
Vendors; Original Vendees; Subsequent Purchasers.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No(s).
13507-13508 of 2025
From the Judgment and Order dated 22.03.2017 of the High Court
of Karnataka Circuit Bench at Dharwad in RFA Nos. 4187 of 2013
and 4160 of 2012

Appearances for Parties
Advs. for the Appellants:
Dr. Aditya Sondhi, Dr. Joseph Aristotle S., Sr. Advs., Mr. Naveen
Nagarjuna, Ms. Priya Aristotle, Maeen Mavara M, Anubhav Kumar,
Ms. B. Lekshmi, Ms. Priya Aristotle.
Advs. for the Respondents:
Devadatt Kamat, Ms. Supreeta Sharanagouda, Sharanagouda
Patil, Mrs. Supreeta Sharanagouda, Yash S Tiwari, Nishanth
Patil, Rajesh Inamdar, Harsh Pandey, Arijit Dey, Abhishek Gupta,
Awanish Gupta, Ms. Bhumi Agrawal, Ms. Supreeta Sharanagouda.

Judgment / Order of the Supreme Court

Judgment

J.B. Pardiwala, J.

For the convenience of exposition, this judgment is divided into the
following parts:-
INDEX*

A. FACTUAL MATRIX .................................................................. 2
B. SUBMISSIONS OF THE PARTIES ......................................... 14
(i). Submissions on behalf of the Appellants / Subsequent
Purchasers ...................................................................... 14

* Ed. Note: Pagination as per the original Judgment.
[2025] 12 S.C.R. 49

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

(ii). Submissions on behalf of the Respondents / Original
Vendees .......................................................................... 17
C. ANALYSIS ................................................................................. 19
(I). Failure to challenge the legality and validity of
termination of ATS in the suit ........................................ 19
(a) Views adopted by the High Courts on failure to seek
declaration ................................................................ 28
(b) Whether the ATS dated 28.04.2000 was in nature
determinable? .......................................................... 53
(II). Bona fides of the subsequent purchasers in purchasing
the subject land ............................................................... 73
(III). Readiness and willingness of the Original Vendees to
perform the ATS ................................................................ 87
D. CONCLUSION ........................................................................... 95

1. Leave Granted.
2. Since the issues raised in both the captioned appeals are the same,
the parties are same, and the challenge is also to the self-same,
judgment and order passed by the High Court, those were taken up
for hearing analogously and are being disposed of by this common
judgment and order.
3. These appeals arise from the common judgment and order passed
by the High Court of Karnataka in the Regular First Appeal Nos.
4187 of 2013 and 4160 of 2012 respectively by which the High
Court allowed the two appeals filed by the vendees and thereby, set
aside the judgment and decree dated 21.07.2012 passed by the 2nd
Additional Senior Civil Judge at Haveri, Karnataka (“Trial Court”)
in Original Suit No. 36 of 2007, while granting the relief of specific
performance of Agreement to Sell dated 28.04.2000 (“ATS”) executed
by the Respondent Nos. 6 to 13 (“Original Vendors”) in favour of the
Respondent Nos. 15 to 22 respectively & the Respondent Nos. 1 to 5
respectively (“Original Vendees”) and holding the Appellants herein
50 [2025] 12 S.C.R.

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(“Subsequent Purchasers”) not to be the bona fide purchasers of
the subject land (as defined below) for value without notice.

A. FACTUAL MATRIX
4. For the sake of convenience, the respective positions of the contesting
parties to the present lis before the various courts leading upto this
Court is tabularly illustrated herein below:

Before This Before The Before The Particulars
Court High Court Trial Court
Appellants Respondent Defendant Subsequent Purchasers
Nos. 8 to 15 Nos. 9 to 16 of subject land
Respondent Appellants Defendant One of the Original
Nos. 1 to 5 No. 7 Vendees of the subject
land, however, he was
(Legal Heirs
arrayed as a defendant in
of Defendant
the suit. This defendant
No. 7 on
supported the case of
record)
plaintiffs.
Respondent Respondent Defendant Original Vendors of the
Nos. 6 to 13 Nos. 1 to 6 Nos. 1 to 6 subject land
(Legal Heirs
of Defendant
Nos. 4 and 6
on record)
Respondent Respondent Defendant One of the Original
No. 14 No. 7 No. 8 Vendees of the subject
land, however, he was
arrayed as a defendant in
the suit. This defendant
was proceeded ex-parte
by the Trial Court
Respondent Appellants Plaintiffs Original Vendees of the
Nos. 15 to 22 subject land
Respondent Nos. 15 to 22, Respondent Nos. 1 to 5, and Respondent
No. 14 being the original purchasers of subject land are also collectively
being referred to as “Original Vendees” in the present matter.
[2025] 12 S.C.R. 51

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

5. On 28.04.2000, the original vendors executed an unregistered
ATS in favour of the original vendees in respect of 354 Acres of
Agricultural Watan Land bearing survey no. 12/2 part 12/2A situated
in village Basavanakoppa, Taluk Shiggaon, District Haveri, Karnataka
(“Subject Land”) for a total sale consideration of Rs. 26,95,501/- out
of which the original vendees paid an amount of Rs. 2,00,000/- as
earnest money to the original vendors. It was agreed that an additional
amount of Rs. 5,00,000/- would be paid by the original vendees to
the original vendors at the time of registration of the ATS and the
balance sale amount would be paid at the time of registration of
the sale deed. It was also agreed that the original vendees would
execute the sale deed within two months of the original vendors,
informing them about the change of subject land from new tenure
to old tenure in the record of rights, surveying, measuring, fixing the
boundaries of subject land and shifting 19 tenants residing on the
subject land to one particular place. Between the years 2000 and
2001, the original vendees paid some further amount to the original
vendors, in all aggregating to Rs. 8,12,500/-.
6. On 24.03.2001, one Sunil Anand Rao Desai, nephew of the original
vendors, instituted the Original Suit No. 30 of 2001 in the court
of the Principal Senior Civil Judge at Haveri against the original
vendors herein inter alia seeking partition and possession of certain
properties including the subject land and revocation of a partition
deed dated 29.12.1996 (unrelated to the present case) to which
the original vendees were not parties. On 11.04.2001, an order of
status quo came to be passed by the Principal Senior Civil Judge.
When the original vendees came to know about the institution of the
Original Suit No. 30 of 2001, they took steps to enforce their rights
under the ATS and sought to implead themselves as parties in the
said suit by filing an impleadment application dated 27.08.2001.
The said application came to be rejected by the Principal Senior
Civil Judge vide its order dated 16.03.2005. Later, aggrieved by
rejection to impleadment application, the original vendees preferred
a Writ Petition being WP No. 17952 of 2005 before the High Court.
However, the same also came to be dismissed by the High Court
vide its order dated 18.07.2005.
7. In the interregnum and during the pendency of the aforementioned
Original Suit No. 30 of 2001, the original vendees got the subject
land converted from new tenure to old tenure on behalf of the original
52 [2025] 12 S.C.R.

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vendors and also persuaded those 19 tenants who were residing on
the subject land to relocate themselves to some other portion of the
land. Meanwhile, one of the original vendees i.e. the Respondent
No. 14 herein entered into an agreement dated 28.12.2002 wherein
he released and relinquished his right under the ATS in favour of
the remaining original vendees.
8. On 10.03.2003, the original vendors sent a Legal Notice (“Notice of
Termination”) to the original vendees thereby terminating the ATS
and informing them of their inability to execute a sale deed inter alia
for two reasons – (i) Long pendency of the Original Suit No. 30 of
2001 and the status quo order in force therein, and (ii) The death of
one of the original vendors i.e., Smt. Godavari @ Mahalaxmi Kulkarni.
In the said notice of termination, the original vendors called upon
the original vendees to take back the earnest money paid by them
and treat the ATS as cancelled within one month from the date of
receipt of said notice, failing which the ATS would be “deemed to be
cancelled”. The relevant portion of the said notice reads as under:
“In view of the pending litigation and death of Smt. Godavari
urf Mahalakshmi G. Kulkarni, my clients are not in a
position to go ahead with the transaction as per agreement
of sale deed dt. 28.04.2000. My clients cannot wait for
an indefinite period. Furthermore they cannot be definite
about their share in the land in view of the litigation and
it is also subject to the decision of the court.
Hence, my clients are unable to execute a sale deed
in respect of the land in question as per agreement dt.
28.04.2000. Under the circumstances, you are hereby
called upon to take back your earnest money and to treat
the agreement of sale dt. 28.04.2000 as cancelled within
a period of one month from the date of receipt of this
notice. Failing which the agreement of sale dt. 28.04.2000
is deemed to be cancelled and the legal effects and rights
of my clients will take their own course and my clients will
be at liberty to deal with the above said land in accordance
with law.”
(Emphasis Supplied)

9. To the aforesaid, the original vendees on 21.03.2003 gave a reply
stating as follows:
[2025] 12 S.C.R. 53

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

(i). That they had fulfilled the terms of the ATS by getting the subject
land surveyed, measured, and boundaries fixed, and carrying
out the conversion of tenure of the subject land which otherwise
was the obligation of the original vendors under the ATS;
(ii). That they had time and again requested the original vendors to
perform their part of the obligation of executing the sale deed;
(iii). That they were always ready and willing to perform their part
of the contract;
(iv). That the further performance of the ATS had to be suspended
due to the order of status quo passed in the Original Suit No. 30
of 2001 and the same would not render the ATS unenforceable;
(v). That the original vendors were duty bound to execute the
sale deed in their favour after the disposal of the Original Suit
No. 30 of 2001;
(vi). That the death of one of the original vendors would not have
the effect of cancellation of the ATS because the legal heirs
would be bound to perform in that regard;
(vii). That for all the above grounds the question of taking back the
earnest money did not arise.
10. No further response was given by the original vendors to the aforesaid
reply to their notice of termination. On 10.02.2007, the plaintiff in
the Original Suit No. 30 of 2001 viz., Sunil Anand Rao Desai filed a
memo to withdraw the suit and get the status quo order vacated in
effect thereto. On the basis of the withdrawal memo, the Principal
Senior Civil Judge vide its order dated 14.02.2007 dismissed the
Original Suit No. 30 of 2001 as being withdrawn and thus, the status
quo order came to be vacated in effect thereto. Pursuant to the
withdrawal of the said suit, the original vendors executed the sale
deeds dated 20.02.2007 and 02.03.2007 respectively in favour of
the subsequent purchasers, selling the subject land for a total sale
consideration of Rs. 71,00,000/-.
11. Having obtained knowledge of the sale deeds executed in favour of
the subsequent purchasers, the original vendees instituted the Original
Suit No. 36 of 2007 in the Trial Court on 09.07.2007 inter alia the
relief of seeking specific performance of the ATS dated 28.04.2000
against both the original vendors and the subsequent purchasers.
54 [2025] 12 S.C.R.

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12. The original vendees prayed for the following reliefs:
“16. The plaintiffs pray: -
(a) That the defendants be specifically ordered to perform
the agreement dated 28.04.2000 and do all acts necessary
to put the plaintiffs in full possession of the suit property
as owners at the cost of the plaintiffs after receiving the
balance consideration from the plaintiffs;
(b) That the above acts be got done through Court
Commissioner in case defendant/s fail to execute and
register the sale deed;
(c) In case for any reason whatsoever the court comes
to the conclusion that the specific performance cannot be
ordered, then the court may be pleased to order refund
of amounts paid with damages and compensation which
is total sum of Rs. 26,95,501/-;
(d) Costs and such other reliefs as court deems fit and
proper.”
13. Pursuant to the above, the Trial Court framed the following issues:
“1. Whether plaintiffs prove that, defendants No. 1, 2, 4
and 6 and two others have agreed to sell the suit land
RS No. 12/2 i.e. 12/2A measuring 354 acres of village
Basasvanakoppa for a sum of Rs: 26,95,501/- on 28.4.2000
and paid Rs. 2,00,000/- as earnest money?
2. Whether plaintiffs prove that, defendants No. 1, 2, 4 and
6 and others have agreed to execute the sale deed within
one month after completion of the work of sub division.
3. Whether plaintiffs prove that they have paid amount of
Rs. 9,45,000/- as shown in schedule B?
4. Whether plaintiffs prove that, they are ready, ever ready
and always ready to perform their part of contract?
5. Whether defendants No.1 to 4 and 9 to 16 prove that
suit of the plaintiffs is hopelessly barred by them?
6. Whether defendant No. 1 to 4 prove that the suit of
the plaintiffs is not maintainable without seeking relief of
cancellation of sale deed?
[2025] 12 S.C.R. 55

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

7. Whether deft. No. 10 proves that, deft. No. 9 to 16 are
bonafide purchase of suit lands for valid consideration?
8. Whether plaintiffs are entitled to the relief of specific
performance of contract of sale?
9. What order or decree?”
14. The Trial Court answered the issues as under:
(a) Issue Nos. 1, 2, 4 and 7 respectively were answered in the
affirmative and the Issue No. 3 was answered partly in the
affirmative –
(i). That the original vendees successfully proved that the
original vendors had agreed to sell the subject land
for sale consideration of Rs. 26,95,501/- and had paid
Rs. 2,00,000/- as earnest money;
(ii). That the original vendees successfully proved that the
original vendors had agreed to register the sale deed
within one month after the completion of subdivision work;
(iii). That the original vendees claim to have paid Rs. 9,45,000/-
in overall to the original vendors yet the evidence indicates
that the original vendees had paid a total of Rs. 8,12,500/-
to the original vendors;
(iv). That the original vendees successfully proved that they
were always ready and willing to perform their part of the
contract;
(v). That the original vendees failed to prove that the
subsequent purchasers had prior knowledge of the ATS.
(vi). That the subsequent purchasers have proved that they
are bona fide purchasers of the subject land for valid
consideration without notice.
(b) Issue Nos. 5, 6, and 8 respectively were answered in the
negative –
(i). That the delay in filing the suit was caused due to the
pendency of the Original Suit No. 30 of 2001 and the original
vendees had filed the suit after the execution of the sale
deed by the original vendors in favour of the subsequent
purchasers. Thus, the suit filed by the original vendees
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was within limitation from the date of the disposal of the
Original Suit No. 30 of 2001 as well as the execution of
the sale deeds;
(ii). That the suit of the original vendees was maintainable
without seeking the relief of cancellation of the sale deeds.
This was because the original vendees were not party to
those sale deeds and they had filed the suit for specific
performance on the basis of ATS only;
(iii). That the original vendees failed to prove that they were
in actual possession of the subject land from the date of
execution of the ATS and that the subsequent purchasers
had bona fide purchased the subject land. Therefore, the
grant of relief of specific performance in favour of the
original vendees would cause hardship to the subsequent
purchasers.
(c) Issue No. 9 followed with the following order and direction –
(i). That the original vendees had failed to make good their
case for grant of relief of specific performance and that
in the alternative, the original vendees were entitled to
refund of an amount of Rs. 8,12,500/- alongwith damages
@9% p.a.
15. Aggrieved by the judgment and decree dated 21.07.2012 passed
by the Trial Court, the original vendees filed two separate appeals
i.e., the Regular First Appeal Nos. 4160 of 2012 and 4187 of 2013
respectively, before the High Court. As no cross objections were filed
by the subsequent purchasers, the High Court framed the following
point for its determination:
“1. Whether the defendant 9 to 16 had established that they
were bona fide purchasers for value of the suit property?”
16. The High Court allowed the two appeals by a common judgment
and order dated 22.03.2017. It was held that the subsequent
purchasers had been informed of the ATS by the original vendors
and a copy of the notice of termination of ATS was also shared
with the subsequent purchasers. This in High Court’s opinion would
indicate that the subsequent execution of sale deeds in favour of the
subsequent purchasers was a deliberate act and in plain disregard to
[2025] 12 S.C.R. 57

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

the subsisting ATS in favour of the original vendees. The High Court
also observed that as the original vendors had not responded to the
reply of original vendees to the notice of termination, the termination
of ATS could never be said to have reached to its logical end, and
that the ATS was still alive and binding.
17. Thus, the High Court held that the subsequent purchasers were not
bona fide purchasers of the subject land for value without notice as
they were aware of the earlier ATS executed in favour of the original
vendees. The High Court directed the subsequent purchasers to
execute the sale deeds in favour of the original vendees and put
them in physical possession of the subject land. The original vendees,
in turn, were directed to pay the balance sale consideration to the
subsequent purchasers. The relevant portions of the impugned
judgment at Page Nos. 29 to 31 are as under:
“Apparently, there was no rejoinder to the reply notice. It is
also not shown that the defendants had offered to return
the advance amount received, nor was it claimed to have
been returned. The termination of the agreement was hence
not taken to its logical end. The unilateral termination could
not therefore said to be valid and binding on the plaintiffs.
Defendants no.1 to 6 were therefore aware of the
circumstance that the advance amount paid by the
plaintiffs was not refunded nor was it claimed to have
been forfeited on any alleged breach of contract on the
part of the plaintiffs. In the face of which, the circumstance
that close on the heels of, the plaintiff in the civil suit in
OS 30/2001 having withdrawn the suit, that was claimed
as an impediment for completion of the sale transaction,
defendants no. I to 6 having sold the property in favour
of Defendants no.9 to 16, who in turn were said to have
been informed of the agreement of sale and the same
having been terminated under the notice dated 10-3-
2001 and a copy of the same also said to having been
furnished to the said defendants, would plainly indicate
that the sale transaction was carried out deliberately and
blatantly in the face of a subsisting agreement of sale in
favour of the plaintiffs, with a clear intention of defeating
the said agreement of sale in favour of the plaintiffs. Such
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a deliberate act on the part of Defendants no. I to 6 and
9 to 16 would not enable them to claim that as they have
achieved a fait accompli, though defendants may claim
to be innocent and bona fide purchasers for value, as it
is found that they were aware of the agreement of sale in
favour of the plaintiffs, it cannot be said that the contract is
no longer capable of ; performance as the property is now
in the hands of a third party. This may be true of genuinely
bona fide purchasers and not such third-party purchasers
who have brazenly entered into the transaction with eyes
wide open and with notice of the subsisting agreement.
The consequence would be that even defendants no. 9
to 16 would be obliged to complete the sale, as persons
claiming under Defendants no. 1 to 6 by the due execution
of a sale deed or sale deeds in favour of the plaintiffs and
to convey the suit property in favour of the plaintiffs.
Incidentally, it is our firm opinion that it would be unjust to
grant a lesser relief to the plaintiffs in directing the refund
of the earnest money or to embark upon an exercise of
determining any damages which the plaintiffs could very
well claim. Such an exercise would have been justified
if the defendants no. 9 to 16 had established their bona
fides, which they have not.
In the result, the appeals are allowed and the judgment of
the trial court is set aside. The suit for specific performance
is decreed. Defendants 9 to 16 shall execute sale deeds
in favour of the plaintiffs in respect of such portions of
the suit property that they may have purchased from
Defendants no. 1 to 6, in favour of the plaintiffs and put
them in physical possession of the same. The plaintiffs
shall pay the balance sale price in consideration thereof,
proportionately. The sale transactions shall be completed
within a period of three months, if not earlier. In the event
of default on the part of the said defendants in this regard,
the plaintiffs shall be entitled to have the sale deeds
executed through the court below, in the manner as may
be directed by it.”
(Emphasis Supplied)
[2025] 12 S.C.R. 59

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

18. In such circumstances referred to above, the subsequent purchasers
are here before us with the present appeals.

B. SUBMISSIONS OF THE PARTIES

(i). Submissions on behalf of the Appellants / Subsequent
Purchasers
19. Dr. Aditya Sondhi, the learned senior counsel appearing for the
subsequent purchasers would submit that the courts below committed
a serios error in decreeing the suit for specific performance filed by
the original vendees in as much as the same was barred by limitation.
The learned counsel argued that as per Article 54 of the Limitation
Act, 1963, the period of the limitation to institute a suit for specific
performance is 3 years from the date when a plaintiff has notice of
refusal of performance. According to the learned counsel, the ATS
was terminated by the original vendors vide notice of termination
dated 10.03.2003 and thus, the limitation period could be said to
have expired on 10.03.2006. However, the original vendees filed
the Original Suit No. 36 of 2007 on 09.04.2007 i.e. after a delay of
total 11 months.
20. He further submitted that the original vendees’ explanation as
regards delay in filing the Original Suit No. 36 of 2007 by relying on
the pendency of their impleadment application in the Original Suit
No. 30 of 2001 is misconceived in as much as: (a) the impleadment
application of the original vendees’ in the Original Suit No. 30 of 2001
was filed much prior to the notice of termination and on the basis of
a wholly different cause of action and (b) the notice of termination
was issued by the original vendors on 10.03.2003 i.e. later in time
to the filing of the impleadment application, giving rise to a fresh
cause of action in respect of specific performance.
21. The learned senior counsel further submitted that the Original Suit No.
36 of 2007 filed for seeking specific performance was not maintainable
in law in the absence of there being any prayer seeking declaration
in respect of the legality and validity of the termination of the ATS.
For this, the learned counsel placed reliance on the decisions of
this Court in I.S. Sikandar (Dead) by LRs v K. Subramani & Ors.,
reported in 2013 (15) SCC 27 and R. Kandasamy (since dead) &
Ors. v T.R.K. Sarawathy & Anr., reported in 2024 SCC OnLine
SC 3377 respectively wherein this Court had held that a suit for
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specific performance is not maintainable in the absence of a prayer
for declaration that the notice of termination of agreement of sale
is bad in law.
22. The learned senior counsel further submitted that his clients are
bona fide purchasers of the subject land for value without notice
and that too after 4 years of the termination of the ATS. He would
submit that at the time of the sale of the subject land there was no
suit pending. According to the learned counsel, the ATS being an
unregistered document and the same being terminated by the original
vendors, they had no occasion to have notice to anything contrary.
The learned counsel submitted that the subsequent purchasers
made bona fide enquires about the title of the original vendors and
all other necessary particulars before purchasing the subject land.
The subsequent purchasers were made aware by the original vendors
about the termination of the ATS vide the notice of termination prior
to the purchase of the suit property. It was argued that the title and
possession of the subject land was with the original vendors at the
time of the sale.
23. In the last, the learned senior counsel submitted that the ATS was
executed in favour of six different individuals who were joint vendees
and that there was no division of each person’s interest. Four of the
original vendees chose to file the Original Suit No. 36 of 2007 as
plaintiffs. Two of the original vendees i.e. the Respondent Nos. 1 to 5
herein and the Respondent No. 14 herein respectively, were arrayed
as the defendant no. 7 and defendant no. 8 respectively in the Original
Suit No. 36 of 2007, out of which the defendant no. 7 supported
the case of the original vendees, however, the defendant no. 8 was
proceeded ex-parte by the Trial Court. This defendant no. 8 chose
not to appear before the High Court. He has not appeared before
this Court as well. One of the original vendees i.e. defendant no. 7
never sought the relief of specific performance of the ATS. On such
premise, the learned counsel argued that the ATS being indivisible,
and in the absence of all the vendees seeking enforcement of the
same, the relief of specific performance is not enforceable in law.

(ii). Submissions on behalf of the Respondents / Original
Vendees
24. Mr. Devadatt Kamat, the learned senior counsel, appearing for the
original vendees vehemently submitted that no error not to speak of
[2025] 12 S.C.R. 61

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

any error of law could be said to have been committed by the High
Court in passing the impugned judgement and order. On the point of
limitation, the learned counsel argued that the Trial Court after due
consideration of the facts of the present matter and the evidence on
record rightly held that the Original Suit No. 36 of 2007 filed by the
original vendees was not time barred. He submitted that the appellant
herein / subsequent purchasers had not even challenge this finding
of limitation before the High Court and that the High Court limited its
adjudication only to the issue whether the subsequent purchasers
were bona fide purchasers or not. In arguendo, the learned counsel
argued that even otherwise the original vendees would be entitled
to seek the benefit of Section 14 of the Limitation Act, 1963 in as
much as they were seeking impleadment in the Original Suit No. 30
of 2001.
25. It was sought to be argued that the time consumed in impleading
themselves as parties in Original Suit No. 30 of 2001 and in the Writ
Petition No. 17952 of 2005 has to be excluded under Section 14 of
the Limitation Act, 1963 since: (1) both the Original Suit No. 30 of
2001 and the Original Suit No. 36 of 2007 were civil proceedings;
(2) the impleadment application filed by the original vendees was
dismissed by recording a finding that they were not a necessary
party; and (3) original vendees agitated their rights under the same
ATS in both the proceedings and that specific submissions regarding
their readiness and willingness to perform the contract were made
in both the proceedings.
26. The learned counsel further submitted that the High Court was
right in holding that the subsequent purchasers are not bona fide
purchasers of the subject land. He argued that it is evident from
the conduct and flow of events that the subsequent purchasers
are not bona fide purchasers. He pointed out that the subsequent
purchasers entered into sale deeds on 20.02.2007 and 02.03.2007
respectively i.e. within 6 (Six) days and 15 (Fifteen) days respectively
of the withdrawal order dated 14.02.2007 passed in the Original Suit
No. 30 of 2001. The timing of the execution clearly shows that the
sale deeds were executed with the sole intent to defeat the rights of
the original vendees. Developing this argument further, the learned
counsel submitted that the subsequent purchasers have admitted
that they were shown the notice of termination dated 10.03.2003
and had the subsequent purchasers not been negligent, they would
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have come to know the fact that the earnest money of the original
vendees was never returned by the original vendors and that the
original vendees had objected to the notice of termination vide their
reply dated 21.03.2003.
27. In the last, the learned senior counsel submitted that in so far as the
readiness and willingness of the original vendees is concerned, the
Trial Court and High Court have concurrently held that the original
vendees were always ready and ever willing to perform their part
of the ATS.
28. In such circumstance referred to above, the learned counsel prayed
that there being no merit in the present appeals those may be
dismissed.

C. ANALYSIS
29. Having heard the learned counsel appearing for the parties and
having gone through the materials on record, the only question that
falls for our consideration is whether the High Court committed any
error in passing the impugned judgment?

(I). Failure to challenge the legality and validity of termination
of ATS in the suit.
30. The subsequent purchasers have vehemently argued that the Original
Suit No. 36 of 2007 filed by the original vendees inter alia seeking
specific performance of ATS was not maintainable because the
original vendees failed to also seek a declaration from the court in
respect of whether the notice of termination of the ATS was bad in
law or invalid. We are aware that neither the subsequent purchasers
nor the original vendors had raised before the Trial Court the plea
that the suit for specific performance filed by the original vendees
was not maintainable in the absence of a declaration seeking the
invalidity of the termination of ATS, no issue came to be framed
by the Trial Court on this aspect. However, the same would not
preclude this Court to determine if the suit for specific performance
filed by the original vendees was not maintainable for want of such
declaration as this Court recently in R. Kandasamy (supra) had
held that an appellate court would not be precluded from examining
whether any jurisdictional fact exists for grant of relief of specific
performance notwithstanding the fact that the trial court omitted
[2025] 12 S.C.R. 63

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

or failed to frame issue on maintainability of the suit. The relevant
observation is as under:
“25. What follows from A. Kanthamani [A. Kanthamani v.
Nasreen Ahmed, (2017) 4 SCC 654: (2017) 2 SCC
(Civ) 596] is that unless an issue as to maintainability
is framed by the trial court, the suit cannot be held to
be not maintainable at the appellate stage only because
appropriate declaratory relief has not been prayed.

xxx xxx xxx
43. In Shrisht Dhawan v. Shaw Bros. [Shrisht Dhawan v.
Shaw Bros., (1992) 1 SCC 534], an interesting discussion
on “jurisdictional fact” is found in the concurring opinion
of Hon’ble R.M. Sahai, J. (as his Lordship then was). It
reads: (SCC pp. 551-52, para 19)
19. … What, then, is an error in respect of jurisdictional
fact? A jurisdictional fact is one on existence or non-
existence of which depends assumption or refusal to
assume jurisdiction by a court, tribunal or an authority.
In Black’s Legal Dictionary it is explained as a fact
which must exist before a court can properly assume
jurisdiction of a particular case. Mistake of fact in
relation to jurisdiction is an error of jurisdictional
fact. No statutory authority or tribunal can assume
jurisdiction in respect of subject-matter which the
statute does not confer on it and if by deciding
erroneously the fact on which jurisdiction depends
the court or tribunal exercises the jurisdiction then
the order is vitiated. Error of jurisdictional fact renders
the order ultra vires and bad. [Wade, Administrative
Law.] In Raza Textiles [Raza Textiles Ltd. v. CIT,
(1973) 1 SCC 633: (1973) 87 ITR 539] it was held
that a court or tribunal cannot confer jurisdiction on
itself by deciding a jurisdictional fact wrongly.
44. Borrowing wisdom from the aforesaid passage, our
deduction is this. An issue of maintainability of a suit strikes
at the root of the proceedings initiated by filing of the plaint
as per requirements of Order 7 Rule 1CPC. If a suit is
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barred by law, the trial court has absolutely no jurisdiction
to entertain and try it. However, even though a given case
might not attract the bar envisaged by Section 9 CPC, it
is obligatory for a trial court seized of a suit to inquire and
ascertain whether the jurisdictional fact does, in fact, exist
to enable it (the trial court) to proceed to trial and consider
granting relief to the plaintiff as claimed. No higher court,
much less the Supreme Court, should feel constrained
to interfere with a decree granting relief on the specious
ground that the parties were not put specifically on notice
in respect of a particular line of attack/defence on which
success/failure of the suit depends, more particularly an
issue touching the authority of the trial court to grant relief
if “the jurisdictional fact” imperative for granting relief had
not been satisfied. It is fundamental, as held in Shrisht
Dhawan [Shrisht Dhawan v. Shaw Bros., (1992) 1 SCC
534], that assumption of jurisdiction/refusal to assume
jurisdiction would depend on existence of the jurisdictional
fact. Irrespective of whether the parties have raised the
contention, it is for the trial court to satisfy itself that
adequate evidence has been led and all facts including
the jurisdictional fact stand proved for relief to be granted
and the suit to succeed. This is a duty the trial court has
to discharge in its pursuit for rendering substantive justice
to the parties, irrespective of whether any party to the lis
has raised or not. If the jurisdictional fact does not exist,
at the time of settling the issues, notice of the parties must
be invited to the trial court’s prima facie opinion of non-
existent jurisdictional fact touching its jurisdiction. However,
failure to determine the jurisdictional fact, or erroneously
determining it leading to conferment of jurisdiction, would
amount to wrongful assumption of jurisdiction and the
resultant order liable to be branded as ultra vires and bad.
45. Should the trial court not satisfy itself that the
jurisdictional fact for grant of relief does exist, nothing
prevents the court higher in the hierarchy from so satisfying
itself. It is true that the point of maintainability of a suit has
to be looked only through the prism of Section 9CPC, and
the court can rule on such point either upon framing of an
[2025] 12 S.C.R. 65

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

issue or even prior thereto if Order 7 Rule 11(d) thereof
is applicable. In a fit and proper case, notwithstanding
omission of the trial court to frame an issue touching
jurisdictional fact, the higher court would be justified in
pronouncing its verdict upon application of the test laid
down in Shrisht Dhawan [Shrisht Dhawan v. Shaw Bros.,
(1992) 1 SCC 534].
46. In this case, even though no issue as to maintainability
of the suit had been framed in the course of proceedings
before the trial court, there was an issue as to whether
the agreement is true, valid and enforceable which was
answered against the sellers. Obviously, owing to dismissal
of the suit, the sellers did not appeal. Nevertheless, having
regard to our findings on the point as to whether the buyer
was “ready and willing”, we do not see the necessity of
proceeding with any further discussion on the point of
jurisdictional fact here.
47. However, we clarify that any failure or omission on the
part of the trial court to frame an issue on maintainability
of a suit touching jurisdictional fact by itself cannot trim
the powers of the higher court to examine whether the
jurisdictional fact did exist for grant of relief as claimed,
provided no new facts were required to be pleaded and
no new evidence led.”
(Emphasis Supplied)

31. In order to fortify their submission, the subsequent purchasers have
relied upon the decision of this Court in I.S. Sikandar (supra) wherein
the plaintiff had instituted a suit for specific performance of agreement
of sale entered into with the defendants therein against the total sale
consideration of Rs. 45,000/- in the year 1983. The plaintiff had paid
Rs. 5,000 as part sale consideration. In 1985, the defendants issued a
legal notice and called upon the plaintiff to comply with his part of the
contract by paying the balance sale consideration against which the
plaintiff had issued a response calling upon the defendants to execute
a conveyance deed and receive the balance sale consideration. By
another letter, the plaintiff also requested the defendants to go to
the office of the Sub-Registrar for the purpose of execution of the
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conveyance deed. However, the defendants sent a notice declining
to accede to the plaintiff’s request and rescinded the agreement to
sell. This Court thus was seized with the question of whether the suit
for specific performance of agreement of sale filed by the plaintiff
therein against the defendants was maintainable without seeking a
declaratory relief with respect to the notice of termination vide which
the agreement of sale was terminated. This Court held that in the
absence of any prayer to declare the termination of agreement of sale
as bad in law, the suit for specific performance filed by the plaintiff
therein was not maintainable. The relevant observation is as under:
“36. Since the plaintiff did not perform his part of contract
within the extended period in the legal notice referred to
supra, the agreement of sale was terminated as per notice
dated 28-3-1985 and thus, there is termination of the
agreement of sale between the plaintiff and Defendants
1-4 w.e.f. 10-4-1985.
37. As could be seen from the prayer sought for in the
original suit, the plaintiff has not sought for declaratory
relief to declare the termination of agreement of sale as
bad in law. In the absence of such prayer by the plaintiff
the original suit filed by him before the trial court for grant
of decree for specific performance in respect of the suit
schedule property on the basis of agreement of sale and
consequential relief of decree for permanent injunction is
not maintainable in law.
38. Therefore, we have to hold that the relief sought
for by the plaintiff for grant of decree for specific
performance of execution of sale deed in respect of the
suit schedule property in his favour on the basis of non-
existing agreement of sale is wholly unsustainable in
law. Accordingly, Point (i) (see para 32.1) is answered in
favour of Defendant 5.”
(Emphasis Supplied)

32. Furthermore, in a recent decision of this Court in Sangita Sinha v.
Bhawana Bhardwaj, reported in 2025 SCC OnLine SC 723, this
Court had occasion to consider and deal with I.S. Sikander (supra)
and R. Kandasamy (supra) respectively. In the said case the suit
[2025] 12 S.C.R. 67

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

property that was allotted to the vendor by a cooperative society
under a registered sub-lease. Later, an unregistered agreement to
sell concerning the said property was executed between the vendors
and the vendee for a total sale consideration of Rs. 25,00,000/-.
At the time of the execution of the agreement to sell, the vendee
had paid a sum of Rs. 2,51,000/- in cash to the vendors and had
issued three post-dated cheques of the amount of Rs. 7,50,000/-.
When the vendee visited the property along with her husband, the
tenants of the vendors created a ruckus and drove them out. In
January 2008, the vendors issued a notice to the vendee cancelling
the agreement to sell and refunded to the vendee an amount of
Rs. 2,11,000/- through five demand drafts and also returned two of
the three post-dated cheques of Rs. 2,50,000/- each. It was the case
of the plaintiff that an advance amount of Rs. 40,000/- still remained
unpaid and that the agreement for sale was unilaterally terminated.
The abovementioned refunded amount was later encashed by the
vendee without any objection as regards the unpaid amount. When
the vendee instituted the suit for specific performance, they failed
to seek a declaration that the termination of agreement for sale
was invalid. In this backdrop, this Court deliberated upon the issue
of whether the suit filed by the vendee was maintainable in the
absence of the declaration that the notice of termination was invalid.
This Court while relying on the decisions in I.S. Sikander (supra)
and R. Kandasamy (supra) respectively, held that a suit for specific
performance is not maintainable in the absence of a declaratory
relief that the termination of agreement was bad in law. The relevant
observation is as under:
“THE AGREEMENT TO SELL DATED 25TH JANUARY
2008 STOOD CANCELLED/TERMINATED.
21. This Court is also of the view that the act of the
Respondent No. 1-buyer in encashing the demand drafts
leads to an irresistible conclusion that the agreement in
question stood cancelled.
22. The contention of the learned counsel for the
Respondent No. 1- buyer that the Agreement to Sell
dated 25th January 2008 could not have been cancelled
unilaterally is contrary to facts as the letter dated 07th
February 2008 along with the refund of the demand drafts
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and two post-dated cheques was nothing but repudiation
of the Agreement to Sell dated 25th January 2008 by
the seller and the encashment of the demand drafts
was acceptance of such repudiation by the Respondent
No. 1-buyer, leading to cancellation of the Agreement to
Sell dated 25th January 2008.
23. The contention that the demand drafts were encashed
under protest is misconceived on facts as there is nothing
on record to show that the demand drafts were encashed
under protest. In fact, PW-2, who is the husband of the
Respondent No. 1-buyer, has deposed that upon receipt
of the demand drafts and cheques, the Respondent No. 1-
buyer had not issued any letter to the seller stating that
the amounts received by them were less than the earnest
money paid by them.
ABSENT A PRAYER FOR DECLARATORY RELIEF THAT
CANCELLATION OF THE AGREEMENT IS BAD IN
LAW, A SUIT FOR SPECIFIC PERFORMANCE IS NOT
MAINTAINABLE
24. This Court further finds that the seller had admittedly
issued a letter dated 7th February 2008 cancelling the
Agreement to Sell dated 25th January 2008, prior to the
filing of the subject suit on 5th May 2008. Even though
the demand drafts enclosed with the letter dated 07th
February, 2008 were subsequently encashed in July, 2008,
yet this Court is of the view that it was incumbent upon
the Respondent No. 1- buyer to seek a declaratory relief
that the said cancellation is bad in law and not binding on
parties for the reason that existence of a valid agreement is
sine qua non for the grant of relief of specific performance.
25. This Court in I.S. Sikandar (Dead) By LRs. v.
K. Subramani, (2013) 15 SCC 27 has held that in absence
of a prayer for a declaratory relief that the termination of the
agreement is bad in law, the suit for specific performance of
that agreement is not maintainable. Though subsequently,
this Court in A. Kanthamani v. Nasreen Ahmed, (2017)
4 SCC 654 has held that the declaration of law in I.S.
Sikander (Dead) By LRs. v. K. Subramani (supra) regarding
[2025] 12 S.C.R. 69

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

non-maintainability of the suit in the absence of a challenge
to letter of termination is confined to the facts of the said
case, yet the aforesaid issue has been recently considered
in R. Kandasamy (Since Dead) v. T.R.K. Sarawathy (supra)
authored by brother Justice Dipankar Datta and the conflict
between the judgment of I.S. Sikander (Dead) By LRs. v. K.
Subramani (supra) and A. Kanthamani v. Nasreen Ahmed
(supra) has been deliberated upon. In R. Kandasamy
(Since Dead) v. T.R.K. Sarawathy (supra), it has been
clarified that the appellate court would not be precluded
from examining whether the jurisdictional fact exists for
grant of relief of specific performance, notwithstanding the
fact that the trial Court omitted or failed to frame an issue
on maintainability of the suit […]
26. Since in the present case, the seller had issued a letter
dated 07th February, 2008 cancelling the agreement to sell
prior to the institution of the suit, the same constitutes a
jurisdictional fact as till the said cancellation is set aside,
the respondent is not entitled to the relief of specific
performance.
27. Consequently, this Court is of the opinion that absent a
prayer for declaratory relief that termination/cancellation of
the agreement is bad in law, a suit for specific performance
is not maintainable.”
(Emphasis Supplied)

33. Before delving into the discussion of whether decisions of this Court
in I.S. Sikander (supra) and Sangita Sinha (supra) would be of
any help to subsequent purchasers herein, we deem it necessary
to look into the views adopted by various High Courts with respect
to the issue at hand.

(a) Views adopted by the High Courts on failure to seek
declaration.
34. The Punjab and Haryana High Court in Brahm Dutt v. Sarabjit
Singh, reported in 2017 SCC OnLine P&H 5489, had observed that
unilateral cancellation by one party is impermissible in law except in
cases where the agreement itself is determinable under Section 14
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of the Specific Relief Act, 1963 (for short, “the Act of 1963”). As
per the court, to hold otherwise would have enabled a defendant to
frustrate virtually every suit for specific performance by resorting to
unilateral cancellation. The court emphasized that the Act of 1963
had made elaborate provisions on this aspect under Chapter IV i.e.,
where a party seeks to rescind an agreement to sell, it is incumbent
upon such party to approach the court and obtain a declaration as
to the validity of such revocation or rescission. If a party claims that
he had valid reasons to terminate or rescind the contract, then such
terminating party should seek a declaration from the competent court,
as required under Sections 27 and 31 of the Act of 1963 respectively.
Therefore, in such a situation, the burden to seek a declaration
regarding the validity of cancellation or termination of the contract
would rest upon the defendant, who has raised such termination as
a defence to resist the suit for specific performance, and not upon
the plaintiff. The relevant observation is as under:
“17. However, otherwise also the defendant could not
have, unilaterally, cancelled the agreement in question.
Unilateral cancellation of agreement to sell by one party
is not permissible in law except where the agreement is
determinable in terms of Section 14 of this Specific Relief
Act. Such cancellation cannot be raised as a defence
in a suit for specific performance. If any such a plea of
cancellation/termination is raised by the defendant than
the Court can just ignore this and the plaintiff need not
challenge such an alleged cancellation. If such unilateral
cancellation of non-determinable agreement is permitted as
a defence then virtually every suit for specific performance
can be frustrated by the defendant. Therefore the Specific
Reliefs Act has made detailed provisions for this aspect.
The bare perusal of the provisions of the Specific Relief Act
shows that once a party claims the right of revocation or
rescission, of the agreement then such a party is required
to seek a declaration from the Court regarding the validity
of revocation or rescission, as the case may be. In the
present case also, it was not the duty cast upon the plaintiff
to challenge the alleged cancellation of agreement, which,
otherwise also, is not proved on record. On the contrary,
if the defendant so claimed that he had valid reasons to
[2025] 12 S.C.R. 71

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

terminate the contract or rescind the contract then he
should have sought a declaration from the competent
Court, as required under Sections 27 and 31 of Specific
Relief Act. Hence the plea of termination of agreement
raised by the defendant has rightly not been accepted by
the Courts below.
18. So far as the judgment of the Hon’ble Supreme Court
in case of I.S. Sikandar (supra) is concerned, there is no
dispute regarding the proposition laid down by the Hon’ble
Supreme Court. However, that judgment is distinguishable
on the facts of the present case. In the case before the
Hon’ble Supreme Court, the defendant had, in fact, asked
the plaintiff to make the payment of the money and to get
the sale deed executed. On failure of the plaintiff to make
the payment the agreement had become determinable
and the defendant had terminated the contract by specific
communication. This action of the defendant was within
the realm of the Contract Act, as provided under Sections
38 and 51 of the Contract Act and Section 14 of Specific
Relief Act, which provides that in case of the performance
which was required of the plaintiff/promisee is refused by
him then the defendant/promisor need not perform his
part of the agreement.”
(Emphasis Supplied)

35. The view taken in Brahm Dutt (supra) stood affirmed by this Court
in Brahm Dutt v. Sarabjit Singh, reported in 2018 SCC Online
SC 3961, wherein this Court found no good reason to interfere with
the view taken by the High court. The relevant portion of the order
is as under:
“3. We do not find any ground to interfere with the impugned
order. The special leave petition is, accordingly, dismissed.”
36. Later, in Balwinder Sarpal v. Ram Kumar Bansal, reported in
2022 SCC OnLine P&H 4408, the Punjab and Haryana High Court
was again confronted with a suit for possession by way of specific
performance. The case arose out of an agreement for sale where
the total sale consideration was fixed at Rs. 7,00,000/-, of which
Rs. 1,00,000/- was paid as earnest money, and the sale deed
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was to be executed on 05.07.2006 upon payment of the balance
consideration. On the appointed date, the plaintiff remained present
in the office of the Sub-Registrar with the requisite balance sale
consideration, for the purpose of execution and registration of the
sale deed. The defendants, however, failed to appear and the sale
deed could not be executed, thereby compelling the plaintiff to institute
the suit. The trial court noted that under a notice of termination, the
defendants purported to cancel the agreement and forfeit the earnest
money. Thus, the trial court, relying on the termination notice, held
that the agreement stood terminated and the earnest money stood
forfeited, and that in the absence of any declaratory relief sought,
the suit for specific performance was not maintainable. Aggrieved by
the decision of the trial court, the plaintiff preferred an appeal which
came to be allowed and thus, the suit for specific performance was
decreed in favour of plaintiff. In second appeal, the defendants placed
reliance upon I.S. Sikandar (supra) to contend that, since the plaintiff
had not sought a declaration challenging the termination, the suit
was not maintainable. The High court, however, distinguished I.S.
Sikandar (supra). It was observed that in I.S. Sikandar (supra), the
vendor had called upon the purchaser to complete the transaction
by paying the balance sale consideration, and even afforded him
a further opportunity with a caveat that failure would result in
termination. The purchaser defaulted despite such opportunity, and
in such circumstances, this Court upheld the termination. In other
words, it was under such circumstances that the failure to seek
a declaration that the termination was unilateral and void, was
considered to be detrimental to the suit for specific performance
instituted by the plaintiff therein. By contrast, in Balwinder Sarpal
(supra), the defendants had issued the notice of termination within
five days of the stipulated date, without granting any opportunity to
the plaintiff to tender the balance consideration and get the sale deed
executed. On these distinguishing facts, the High court held that I.S.
Sikandar (supra) could not be applied to the case at hand. Instead,
reliance was placed on Brahm Dutt (supra) to hold that a unilateral
termination of an agreement for sale, effected in such manner, is not
permissible. The High court observed that once it was found that
the termination was unilateral and without giving any opportunity
to the purchaser to perform his part of the contract, no separate
declaratory relief was required with respect to the termination. The
relevant observation is as under:
[2025] 12 S.C.R. 73

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“9. In the present facts and circumstances wherein, the
agreement in question is dated 05.04.2006 with 05.07.2006
being the target date, notice dated 10.07.2006 regarding
its termination and forfeiture of earnest money was issued
on 10.07.2006 whereas the suit for possession by way
of specific performance came to be filed at the instance
of respondent-plaintiff on 17.08.2006 i.e. without causing
any delay what so ever. This itself shows that in fact the
respondent/plaintiff was always ready and willing to perform
his part of agreement and the amazing swiftness shown
by the appellants/defendants was not at all bona fide
and the uncalled for. Before terminating the agreement in
question, the appellant/defendant never called upon the
respondent/plaintiff to come forward and execute the sale
deed in pursuance to the agreement in question which
happens to be the most relevant distinguishing factor as
compared to the facts in the case of I. S. Sikandar (D)
By LRs. v. K. Subramani, (2014) 1 RCR (Civil) 236. To
point out the same, relevant portion from paragraph No.
17 of the aforesaid judgment is reproduced as under:—
“…………. The period of five months stipulated under
clause 6 of the Agreement of Sale for execution
and registration of the sale deed in favour of the
plaintiff had expired. Despite the same, the defendant
Nos. 1-4 got issued legal notice dated 06.03.1985 to
the plaintiff pointing out that he has failed to perform
his part of the contract in terms of the Agreement
of Sale by not paying balance sale consideration
to them and getting the sale deed executed in his
favour and called upon him to pay the balance sale
consideration and get the sale deed executed on
or before 18.3.1985. The plaintiff had issued reply
letter dated 16.3.1985 to the advocates of defendant
Nos. 1-4, in which he had admitted his default in
performing his part of contract and prayed time till
23.05.1985 to get the sale deed executed in his favour.
Another legal notice dated 28.03.1985 was sent by
the first defendant to the plaintiff extending time to
the plaintiff asking him to pay the sale consideration
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amount and get the sale deed executed on or before
10.04.1985, and on failure to comply with the same,
the Agreement of Sale dated 25.12.1983 would be
terminated since the plaintiff did not avail the time
extended to him by defendant Nos. 1-4. Since the
plaintiff did not perform his part of contract within the
extended period in the legal notice referred to supra,
the Agreement of Sale was terminated as per notice
dated 28.03.1985 and thus, there is termination of
the Agreement of Sale between the plaintiff and
defendant Nos. 1-4 w.e.f. 10.04.1985. As could be
seen from the prayer sought for in the original suit,
the plaintiff has not sought for declaratory relief to
declare the termination of Agreement of Sale as bad in
law. In the absence of such prayer by the plaintiff the
original suit filed by him before the trial court for grant
of decree for specific performance in respect of the
suit schedule property on the basis of Agreement of
Sale and consequential relief of decree for permanent
injunction is not maintainable in law……….”.
10. From the portion reproduced hereinabove, it can be
easily traced out that in the case of I.S. Sikandar (Supra),
the purchaser was initially called upon by the vendor to
get the sale deed executed on payment of balance sale
consideration. The purchaser having failed to do so, another
opportunity was even granted to him to perform his part
of the agreement with a caveat that in case the purchaser
failed to do so by the stipulated date, the agreement would
stand terminated. It was under those circumstances, when
the purchaser failed to perform his part of obligation under
the agreement, the Hon’ble Supreme Court accepted the
plea of termination of the agreement. On the contrary,
in the present case, notice of termination was issued by
appellants/defendants merely within 5 days of the target
dates and that too without granting any opportunity to
the respondent/plaintiff to pay the balance consideration
and get the sale deed executed. In these distinguishing
circumstances, the judgment passed in the case of I. S.
Sakandar (supra) can’t be made applicable to the present
[2025] 12 S.C.R. 75

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case. More than that even the unilateral termination of
agreement in question could not be accepted, in view of
the law laid down by this Court in case of Brahm Dutt v.
Sarabjit Singh, 2018 (1) L.A.R. 119 […]
11. Once the alleged termination of agreement in question,
in the facts and circumstances of the present case has
not been found to be bona fide being done in a unilateral
manner without even calling upon the respondent/plaintiff
to perform their part of agreement and particularly under
the circumstances, wherein, the suit was filed promptly
thereafter, no declaration, challenging the alleged
termination was called for.”
(Emphasis Supplied)

37. In S.K. Ravichandran v. M. Thanapathy, reported in 2022 SCC
OnLine Mad 9094, the plaintiff had instituted a suit for specific
performance of an agreement for sale of immovable property owned
by the defendant. The parties had entered into a written agreement
for sale dated 19.08.2007 for a total consideration of Rs. 11,80,000/-,
out of which the plaintiff paid Rs. 1,50,000/- as advance on the very
same day. The agreement stipulated that upon payment of the balance
consideration of Rs. 10,30,000/- on or before 15.10.2007, the sale
deed would be executed and registered. The plaintiff tendered the
balance consideration and was assured by the defendant that he
would attend the office of the Sub-Registrar prior to the stipulated
date. It was further agreed that both the parties would appear before
the Sub-Registrar on 09.10.2007. While the plaintiff duly presented
himself on that date, the defendant failed to do so. Consequently,
on 12.10.2007, the plaintiff dispatched a telegram and a detailed
letter requesting the defendant to attend the Sub-Registrar’s office
on 15.10.2007. The plaintiff remained present on the appointed
day, but despite due receipt of the communication, the defendant
neither appeared nor responded. The plaintiff thereafter learnt that
the defendant was attempting to alienate the suit property to third
parties, compelling him to institute a suit for specific performance
and permanent injunction. The defendant by relying on I.S. Sikandar
(supra) resisted the suit on the ground that, in the absence of a specific
challenge to the alleged termination of the agreement, the suit was
not maintainable. The plaintiff, on the other hand, contended that the
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agreement did not contain any clause permitting termination in the
event of default, and that unilateral cancellation was impermissible in
law. Relying upon the decision in Brahm Dutt (supra), it was urged
that unilateral cancellation of a contract, except in cases where the
agreement is determinable under Section 14 of the Act of 1963 is
not sustainable in the eyes of law. Such a cancellation, if pleaded
as a defence, could be ignored by the court and the plaintiff did not
require to seek a separate declaratory relief. Relying on the dictum
as laid in Brahm Dutt (supra), the Madras High Court held that since
the agreement in question did not provide for termination upon the
purchaser’s failure to pay the balance consideration by a stipulated
date, the unilateral cancellation pleaded by the defendant was of no
legal effect. It was reiterated that law does not permit such unilateral
termination. The relevant observation is as under:
“15. He would further submit that since the appellant did
not come forward to get the sale deed by paying balance
sale consideration and he was not ready and willing to
perform his part of contract, the respondent cancelled the
sale agreement and when the respondent communicated
the appellant, regarding the cancellation of the deed, the
appellant has not challenged the cancellation of the sale
agreement. Without challenging the cancellation of the
sale agreement, the Suit is not maintainable.
16. In support of his contention, he relied on the following
Judgments:— (i) I.S. Sikandar (D) by LRS., v. K. Subramani,
(2013) 15 SCC 27; (ii) Ravindran v. Danton Shanmugam,
(2017) 3 Mad LJ 265; (iii) Mohinder Kaur v. Sant Paul
Singh, (2019) 9 SCC 358 and (iv) Prabakaran v. Geetha,
(2022) 3 CTC 650.

xxx xxx xxx
25. It is the contention of the learned counsel for the
respondent that the suit itself was not maintainable
on the ground that though the respondent cancelled
the agreement, the appellant has not challenged the
cancellation. In this regard, the learned counsel for the
appellant would submit that the sale agreement does not
speak about the termination of the contract. Unilateral
cancellation is not permissible under law, except where
[2025] 12 S.C.R. 77

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the agreement is determinable in terms of Section 14
of the Specific Relief Act. Such cancellation cannot be
raised as a defence in a suit for specific performance. If
any such plea is raised by the respondent, the Court can
just ignore the same and the plaintiff need not challenge
the unilateral cancellation separately. Further, the plea
regarding the maintainability of the suit is to be raised at
the first instance in the written statement. Therefore, the
said plea cannot be adjudicated in the appeal. The citation
referred to by the learned counsel for the respondent is
not applicable to the present case on hand.
26. A careful perusal of the sale agreement Ex.A.1
clearly shows that the time stipulated for the balance
sale consideration is on or before 15.10.2007, it does not
speak about the termination of the contract, in case the
appellant will not pay the balance sale consideration on
particular date. Therefore, the law does not permit unilateral
cancellation as referred to above.”
(Emphasis Supplied)

38. The view taken by the Madras High Court in S.K. Ravichandran
(supra) also came to be affirmed by this Court in S.K. Ravichandran v.
M. Thanapathy, reported in 2022 SCC Online SC 2369, wherein
one of us, J.B. Pardiwala, J., was a part of the Bench. This Court
found no good reason to interfere with the above decision. The
relevant portion is as under:
“2. We do not find any reason to interfere with the impugned
order. The Special Leave Petition is accordingly dismissed.”
39. The Delhi High Court was also seized of a similar issue in the
case of Rajesh Sethi S.C. v. P.C. Sethi, reported in 2023 SCC
OnLine Del 7010. In the said case, the plaintiff had filed a suit for
specific performance of agreement to sell. The agreement to sell
was terminated by the defendants on the ground that the property
was an HUF property. The High court observed that such unilateral
termination is not permissible under law, especially when the
defendant vendor neither had any valid reason nor had filed any suit
seeking a declaration that the agreement to sell was void. Thus, the
plea that the agreement to sell was unilaterally terminated by the
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defendant vendor as the suit property was an HUF property is not
valid. The relevant observation is as under:
“145. The question which now needs deliberation is whether
the Agreement to Sell dated 14.01.2004 Ex P-1/D-2 had
been validly terminated by Col. P.C. Sethi vide his Letter
dated 21.03.2004, before the expiry of the three month
period for execution as provided in the said Agreement.
146. To evaluate the validity of a unilateral rescission of
a contract it would be apposite to refer to the judgment
of the Madras High Court in Raja Rajeswara Dorai v.
A.L.A.R.R.M. Arunachellan Chettiar, 1913 SCC OnLine
Mad 276 where it was observed that a unilateral expression
of rescission of a contract by one of the parties to the
contact cannot be held to relieve him from his obligation
to have the contract rescinded by Court under the
substantive law and within the time allowed by statutory
law if he wants as a plaintiff the assistance of the Court
in obtaining certain reliefs on the basis that the contract
has ceased to exist. It was observed that repudiation of
a contract by one party alone cannot get the party any
relief except as consequent of getting a declaration and a
rescission by the Court. Thus, a contract can be properly
rescinded without the intervention of a Court only by the
act of both parties or, if the original contract or Deed itself,
by clauses of forfeiture or similar clauses, puts an end
to the contract or transaction. However, even the latter
case has to be determined by both the parties and only
then the aid of the Court is not required. Therefore, even
though a contract or transaction may be voidable at the
instance of one party, its rescission is effectuated, not by
the mere repudiation of one party, but by the decree of
declaration of this Court.
147. It has been further explained by Punjab and Haryana
High Court in the case of Brahm Dutt v. Sarabjit Singh,
2017 SCC OnLine P&H 5489 that unilateral cancellation
of Agreement to Sell by one party is not permissible in
law except where the agreement is determinable in terms
of Section 14 of this Specific Relief Act, 1963 and such
[2025] 12 S.C.R. 79

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cancellation cannot be raised as a defense in a suit for
Specific Performance. If any such plea of cancellation/
termination is raised by the defendant, the Court can
just ignore the same and the plaintiff is also not required
to challenge such a cancellation or revocation. It was
further observed that if such unilateral cancellation of
non-determinable agreements is permitted as a defense,
then virtually every suit for specific performance can
be frustrated by the defendant. On the contrary, if the
defendant so claimed that he had valid reasons to terminate
the contract or rescind the contract then he ought to have
sought a declaration from the competent Court, as required
under Sections 27 and 31 of Specific Relief Act, 1963.
148. Thus, once a party claims the right of revocation or
rescission of the Agreement, then such a party is required
to seek a declaration from the Court regarding the validity
of revocation or rescission, as the case may be.
149. In the present case, the Col. PC Sethi has given
contrary reasons in his Letter of Revocation dated
21.03.2004 to those which have been stated in his Written
Statement clearly reflecting that the reason for rescission
on the ground that the property was an HUF was an
after-thought. Be that as it may, the reason provided in
the Letter of Rescission dated 21.03.2004 cannot by any
means be construed as a valid one to unilaterally rescind
the Agreement to Sell even before the tenure of executing
the same had expired. Col. PC Sethi clearly had second-
thoughts about the sale and wanted to wriggle out of
this Agreement to Sell on one ground or the other. Such
unilateral rescission is not permissible under law, especially
when the Col. PC Sethi neither had any valid reason, nor
filed any suit for seeking a declaration that the Agreement
to Sell was void. Therefore, the plea that the Agreement
to Sell dated 14.01.2004 was unilaterally rescinded by
Col. PC Sethi as the suit property is an HUF asset is not
sustainable in the present case.
150. Thus, the cancellation/termination of Agreement by
Col. P.C. Sethi is not valid and the Agreement to Sell is
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held to be subsisting and executable to the extent of the
share of Col. P.C. Sethi.”
(Emphasis Supplied)

40. Further, in the case of Kavi Ghei v. Rohit Vaid, reported in 2024
SCC OnLine Del 6118, the plaintiff had filed a suit for specific
performance of agreement to sell executed by the defendant nos. 1
and 2 respectively therein and the cancellation of subsequent sale
deed executed by the defendant nos. 1 and 2 respectively in favour
of the defendant no. 3. The facts of the case were such that the
plaintiff and the defendant nos. 1 and 2 therein had entered into
an agreement to sell for the sale of property for a consideration of
Rs. 3,22,50,000/-. Pursuant to execution of the agreement to sell,
the plaintiff paid Rs. 21,00,000/- to the defendant nos. 1 and 2
respectively. In terms of the agreement to sell, the sale deed was
to be executed on or before 15.05.2004. For the purpose of raising
the funds for the purchase of suit property, the plaintiff had also
availed a loan of Rs. 2,00,00,000/- from a bank. However, the plaintiff
received a notice of termination from the defendant nos. 1 and 2
dated 21.04.2004, wherein they informed the plaintiff that they had
decided not to sell the suit property to the plaintiff. The reason for
such refusal was stated to be that the plaintiff himself had supposedly
reduced the sale consideration to Rs. 2,00,00,000/- from the agreed
sum of Rs. 3,22,50,000/- and informed the neighbours about the
sale even though sale had not been effected, and also attempted
to avoid the brokerage. The defendant nos. 1 and 2 respectively
further sought to refund the aforesaid amount paid by the plaintiff by
annexing cheques with the notice of termination. The High court found
that none of the reasons as assigned in the notice of termination
were acceptable as they did not reflect any dubious conduct on
part of the plaintiff which would justify a premature termination of
the agreement to sell. The High court while placing reliance on
Brahm Dutt (supra) held that the termination of agreement to sell
was not in accordance with any of the clauses of the agreement
and further it was not with the consent of the both parties. Thus, it
was held therein that the unilateral termination of agreement to sell
by the defendant nos. 1 and 2 was not valid and that agreement to
sell was still subsisting and executable. The relevant observation
is as under:
[2025] 12 S.C.R. 81

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
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“82. It is argued on behalf of Defendant 3 that without
challenging the termination of agreement to sell dated
21-3-2004, the present suit for Specific Performance is
not maintainable under the law.

xxx xxx xxx
115. The facts of the present case may thus, be analysed
to ascertain whether the unilateral termination of ATS, was
justified. Admittedly, the parties entered into an agreement
to sell dated 21-3-2004, Ext. PW 1/1 in regard to the suit
property for the sale consideration of Rs 3,22,50,000
and that a sum of Rs 21,00,000 was paid by the plaintiff
as advance money to the defendants and a balance
amount of Rs 3,01,50,000 remained to be paid at the
time of registration of the sale deed at which time the
physical vacant possession was to be handed over to
the plaintiff […]
116. this agreement to Sell was not only signed by the
plaintiff and the defendants but was also witnessed by
the two witnesses, namely, Colonel C.K. Vaid r/o B-1,
Sundar Nagar, New Delhi and by Ms Ranjana Ahuja r/o
903, Nirmal Towers, 26 Barakhamba Road. It was thus,
clearly stipulated in terms of the agreement to Sell that
the sale deed was required to be executed by 15-5-2004.
117. However, before the expiry of the stipulated period
for honouring the respective obligations, the defendant
has admittedly terminated the agreement on 20-4-2004
i.e. much prior to the date stipulated for completion of the
obligations under the agreement.

xxx xxx xxx
121. From the notice of termination, the three grounds
stated for premature cancellation are: (i) Renegotiations of
terms in regard to the cash competent of the agreed sale
consideration. (ii) Informing the neighbours even though
the sale had not been effected. (iii) The endeavour to
avoid the broker in order to save the brokerage amount.

xxx xxx xxx
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132. Any of the reasons as stated in this Letter of
Termination, Ext. DW 1/1, has not been proved or
established and it does not reflect to any conduct of
the plaintiff which justify premature termination of the
agreement to Sell.

xxx xxx xxx
152. It cannot be overlooked that even though Defendant 3
was being cautious in enter into this sale transaction and
had been conscious and aware of the earlier subsisting
Agreement to Sell, he has admitted that he did not in any
manner contact the plaintiff or otherwise satisfy himself about
the valid termination of the earlier Agreement to Sell. The
manner in which the entire transaction has been executed,
clearly establishes that Defendant 3 while has been a party
to the creation and execution of the documents and has even
mentioned about the earlier Agreement to Sell in the sale
deed, Ext. PW 1/1 but has deliberately not contacted the
plaintiff, to confirm from him about the alleged cancellation
of the earlier Agreement to Sell, as any prudent reasonable
person would do in the given circumstances especially when
the consequences of the earlier Agreement to Sell, were
well within the knowledge and of all the parties.
153. Defendant 3 has acted selectively and had chosen to
ensure that there was proper paper work done and has not
acted like a reasonable person, to ensure the cancellation
of earlier Agreement to Sell. Though he has claimed himself
to be a bona fide purchaser, but from the fact that earlier
ATS was well within the knowledge of the defendants,
manner in which the documents have been executed and
also the fact that the notice of termination of the agreement
to Sell has been served subsequently, the only inference
that can be drawn is that the subsequent sale in favour
of Defendant 3, has been made without there being any
valid termination of prior Agreement to Sell with the plaintiff.
The termination has neither been in accordance with any
Clause of ATS nor is it with the consent of both the parties.
154. Thus, the unilateral cancellation/termination of
agreement to sell dated 21-3-2024 Ext. PW 1/1 by
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Defendants 1 and 2 is not valid and the agreement to
Sell is held to be subsisting and executable. Moreover, it
is proved that Defendant 3 is not a bona fide purchaser
as claimed by him.
155. In conclusion, there being a valid subsisting
Agreement to Sell, which was well within the knowledge
of Defendant 3. He cannot defend the subsequent Sale
Deed executed in his favour. The plaintiff continues to
have a right to seek the execution of the agreement to
Sell, Ext. PW 1/1, in his favour.”
(Emphasis Supplied)

41. A similar view was taken by the Andhra Pradesh High Court in
A. Kanthudu v. S. Venkat Narayana, Appeal No. 678 of 2007 and
the Delhi High Court in Ajay Narain v. Arti Singh, reported in (2025)
316 DLT 425.
42. In addition to the views expressed by various High courts, as
discussed above, this Court, in the recent decision of Annamalai v.
Vasanthi, reported in 2025 SCC OnLine SC 2300, wherein one of
us, J.B. Pardiwala, J., was a member of the Bench, had the occasion
to consider whether a suit for specific performance is maintainable
without seeking a declaration that the termination of the agreement
was invalid in law. This Court held that where a contract confers
upon a party the right to terminate it under certain conditions, and
if such right is exercised, then the continued subsistence of the
contract becomes doubtful. In such cases, the plaintiff must first
obtain a declaration that the termination is invalid before seeking
specific performance. However, where no such contractual right to
terminate exists, or where the right has been waived, and a party
nevertheless proceeds to terminate the contract unilaterally, such
termination would amount to a repudiatory breach, in which event the
non-terminating party can directly seek specific performance without
first seeking a declaration as aforesaid. The relevant observation
is as under:
“Issues for consideration
12. Upon consideration of the rival submissions and having
regard to the facts of the case, in our view, following issues
arise for our consideration:
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A. Whether the High Court was justified in interfering
with the finding of the first appellate court qua payment
of additional amount of Rs. 1,95,000 by the plaintiff-
appellant? If receipt of additional payment by D-1 and
D-2 is proved, as found by the first appellate court,
whether it could be held that plaintiff was not ready
and willing to perform its part under the contract?
B. Whether the suit for specific performance was
maintainable without seeking a declaration that
termination of the agreement was invalid in law?
C. Whether in the facts of the case the plaintiff
was entitled to the discretionary relief of specific
performance?

xxx xxx xxx

When a declaratory relief is essential
25. A declaratory relief seeks to clear what is doubtful, and
which is necessary to make it clear. If there is a doubt
on the right of a plaintiff, and without the doubt being
cleared no further relief can be granted, a declaratory relief
becomes essential because without such a declaration the
consequential relief may not be available to the plaintiff.
For example, a doubt as to plaintiff’s title to a property may
arise because of existence of an instrument relating to that
property. If plaintiff is privy to that instrument, Section 31
of Specific Relief Act, 1963 enables him to institute a suit
for cancellation of the instrument which may be void or
voidable qua him. If plaintiff is not privy to the instrument,
he may seek a declaration that the same is void or does
not affect his rights. When a document is void ab initio, a
decree for setting aside the same is not necessary as the
same is non est in the eye of law, being a nullity. Therefore,
in such a case, if plaintiff is in possession of the property
which is subject matter of such a void instrument, he may
seek a declaration that the instrument is not binding on
him. However, if he is not in possession, he may sue for
possession and the limitation period applicable would be
that as applicable under Article 65 of the Limitation Act,
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1963 on a suit for possession. Rationale of the aforesaid
principle is that a void instrument/transaction can be
ignored by a court while granting the main relief based
on a subsisting right. But, where the plaintiff’s right falls
under a cloud, then a declaration affirming the right of the
plaintiff may be necessary for grant of a consequential
relief. However, whether such a declaration is required
for the consequential relief sought is to be assessed on
a case-to-case basis, dependent on its facts.
26. A breach of a contract may be by non-performance
or by repudiation, or by both. In Anson’s Law of Contract
(29th Oxford Edn.), under the heading “Forms of Breach
Which Justify Discharge”, it is stated thus:
“The right of a party to be treated as discharged
from further performance may arise in any one of
three ways: the other party to the contract (a) may
renounce its liabilities under it; (b) may by its own
conduct make it impossible to fulfill them, (c) may fail
to perform what it has promised. Of these forms of
breach, the first two may take place not only in the
course of performance but also while the contract
is still wholly executory i.e., before either party is
entitled to demand a performance by the other party
of the other’s promise. In such a case the breach is
usually termed an anticipatory breach. The last can
only take place at or during the time for performance
of the contract.”
27. Ordinarily, for a breach of contract, a party aggrieved
by the breach i.e., failure on the part of the other party to
perform its part under the contract can claim compensation
or damages by accepting the breach as a termination
of the contract, or/and, in certain cases, obtain specific
performance by not recognizing the breach as termination
of the contract. In a case where the contract between
the parties confers a right on a party to the contract to
unilaterally terminate the contract in certain circumstances,
and the contract is terminated exercising that right, a mere
suit for specific performance without seeking a declaration
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that such termination is invalid may not be maintainable.
This is so, because a doubt/cloud on subsistence of the
contract is created which needs to be cleared before grant
of a decree enforcing contractual obligations of the parties
to the contract.
28. Now we shall consider few decisions of this Court where
the question of grant of relief of specific performance of
a contract in teeth of termination of the contract without
seeking a declaration qua subsistence of the contract
was considered. In I.S. Sikandar v. K. Subramani, the
agreement for sale stipulated sale within a stipulated time
frame; on failure of the plaintiff to respond to the notice
seeking execution of sale, the agreement was terminated.
In that context, this Court held:
“36. Since the plaintiff did not perform his part of
contract within the extended period in the legal
notice referred to supra, the agreement of sale was
terminated as per notice dated 28-3-1985 and thus,
there is termination of the agreement of sale between
the plaintiff and defendants 1-4 w.e.f. 10-4-1985
37. As could be seen from the prayers sought for in the
original suit, the plaintiff has not sought for declaratory
relief to declare the termination of agreement of sale
as bad in law. In the absence of such prayer by the
plaintiff the original suit filed by him before the trial
court for grant of decree for specific performance in
respect of the suit scheduled property on the basis of
agreement of sale and consequential relief of decree
for permanent injunction is not maintainable in law.
38. Therefore, we have to hold that the relief sought
for by the plaintiff for the grant of decree for specific
performance of execution of sale deed in respect
of the suit scheduled property in his favor on the
basis of non-existing agreement of sale is wholly
unsustainable in law.”
29. In A. Kanthamani (supra), the decision in I.S. Sikandar
(supra) was considered, and it was held:
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“30.3. Third, it is a well settled principle of law that the
plea regarding the maintainability of suit is required to
be raised in the first instance in the pleading (written
statement) then only such plea can be adjudicated
by the trial court on its merits as a preliminary issue
under Order 14 Rule 2 CPC. Once the finding is
rendered on the plea, the same can be examined
by the first or/and second appellate court. It is only
in appropriate cases, where the court prima facie
finds by mere perusal of plaint allegations that the
suit is barred by any express provision of law or is
not legally maintainable due to any legal provision; a
judicial notice can be taken to avoid abuse of judicial
process in prosecuting such suit. Such is, however,
not the case here.
30.4. Fourth, the decision relied on by the learned
counsel for the appellant in I.S. Sikandar turns on the
facts involved therein and is thus distinguishable.”
30. In R. Kandasamy (since dead) v. T.R.K. Sarawathy,
this Court considered both I.S. Sikandar (supra) and A.
Kanthamani (supra), and clarified the law by observing
as under:
“47. However, we clarify that any failure or omission
on the part of the trial court to frame an issue on
maintainability of a suit touching jurisdictional fact
by itself cannot trim the powers of the higher court
to examine whether the jurisdictional fact did exist
for grant of relief as claimed, provided no new facts
were required to be pleaded and no new evidence
led.”
31. From the aforesaid decisions what is clear is that
though a plea regarding maintainability of the suit,
even if not raised in written statement, may be raised
in appeal, particularly when no new facts or evidence
is required to address the same, the issue whether
a declaratory relief is essential or not would have to
be addressed on the facts of each case.
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32. In our view, a declaratory relief would be required
where a doubt or a cloud is there on the right of the
plaintiff and grant of relief to the plaintiff is dependent on
removal of that doubt or cloud. However, whether there
is a doubt or cloud on the right of the plaintiff to seek
consequential relief, the same is to be determined on
the facts of each case. For example, a contract may give
right to the parties, or any one of the parties, to terminate
the contract on existence of certain conditions. In terms
thereof, the contract is terminated, a doubt over subsistence
of the contract is created and, therefore, without seeking
a declaration that termination is bad in law, a decree for
specific performance may not be available. However, where
there is no such right conferred on any party to terminate
the contract, or the right so conferred is waived, yet the
contract is terminated unilaterally, such termination may
be taken as a breach of contract by repudiation and the
party aggrieved may, by treating the contract as subsisting,
sue for specific performance without seeking a declaratory
relief qua validity of such termination.
(Emphasis Supplied)

43. Thus, in view of the above discussion, the following principles of
law are discernible:
(i). Unilateral termination of the agreement to sell by one party is
impermissible in law except in cases where the agreement itself is
determinable in nature in terms of Section 14 of the Act of 1963;
(ii). If such unilateral termination of a non-determinable agreement
to sell is permitted as a defence, then virtually every suit for
specific performance can be frustrated by the defendant by
placing an unfair burden on the plaintiff, who despite performing
his part of the obligations and having showcased readiness and
willingness, would require to also seek a separate declaration
that the termination was bad in law. In such cases, the burden
cannot be casted upon the plaintiff to challenge the alleged
termination of agreement;
(iii). Where a party claims to have valid reasons to terminate or
rescind a non-determinable agreement to sell, with a view to
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err on the side of caution, it should be such terminating party,
if at all, who ideally should approach the court and obtain a
declaration as to the validity of such termination or rescission,
and not the non-terminating party. However, this must not
mean that the defendant (the terminating party) in such cases
would mandatorily be required to seek a declaration because
Sections 27 and 31 of the Act of 1963 respectively, while using
the phrase “may sue” merely give an option to any person to
have the contract rescinded or adjudged as void or voidable;
(iv). Once the alleged termination of a non-determinable agreement
in question is found to be not for bona fide reasons and being
done in a unilateral manner on part of the defendant, it cannot
be said that any declaration challenging the alleged termination
was required on part of plaintiff;
(v). If a contract itself gives no right to unilaterally terminate the
contract, or such right has been waived, and a party still
terminates the contract unilaterally then that termination would
amount to a breach by repudiation, and the non-terminating party
can directly seek specific performance without first seeking a
declaration; and
(vi). In the event it is found that the termination of agreement to sell
by the defendant was not valid, then such an agreement to sell
will remain subsisting and executable.
44. Before applying the aforesaid principles of law to the facts of the
present case, and bearing in mind that unilateral termination of
an agreement to sell by one party is impermissible in law except
where the agreement is by its very nature determinable, it is, as a
necessary corollary, essential to also determine whether the ATS
dated 28.04.2000 was determinable in nature or not.

(b) Whether the ATS dated 28.04.2000 was in nature
determinable?
45. The Commentary on the Indian Contract Act and Specific Relief Act
authored by Pollock & Mulla (17th Edition) states that determinable
contracts derive their existence from the determination clause
envisaged in the contract and there are essentially three types of
determination clauses, viz. (i) termination for cause that allows a party
to terminate the contract if the other party breaches a specific term
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or if a specified event occurs, (ii) termination for convenience that
allows a party to end the contract without having to give a reason
and (iii) termination upon expiry of the term of the contract.
46. The law regarding the contracts that are determinable first came
up before this Court in Indian Oil Corporation v. Amritsar Gas
Service and Ors., reported in (1991) 1 SCC 533, wherein this Court
had held the contract to be determinable in nature because one of
the clauses of the contract permitted either parties to terminate the
same without assigning any reason and by sending a 30 day notice
to the other party. The relevant paragraph is reproduced as follows:
“12. The arbitrator recorded finding on Issue No. 1 that
termination of distributorship by the appellant-Corporation
was not validly made under clause 27. Thereafter, he
proceeded to record the finding on Issue No. 2 relating
to grant of relief and held that the plaintiff-respondent 1
was entitled to compensation flowing from the breach of
contract till the breach was remedied by restoration of
distributorship. Restoration of distributorship was granted in
view of the peculiar facts of the case on the basis of which
it was treated to be an exceptional case for the reasons
given. The reasons given state that the Distributorship
Agreement was for an indefinite period till terminated in
accordance with the terms of the agreement and, therefore,
the plaintiff-respondent 1 was entitled to continuance of
the distributorship till it was terminated in accordance with
the agreed terms. The award further says as under:
“This award will, however, not fetter the right of the
defendant Corporation to terminate the distributorship
of the plaintiff in accordance with the terms of the
agreement dated April 1, 1976, if and when an
occasion arises.”
This finding read along with the reasons given in the
award clearly accepts that the distributorship could
be terminated in accordance with the terms of the
agreement dated April 1, 1976, which contains the
aforesaid clauses 27 and 28. Having said so in the
award itself, it is obvious that the arbitrator held the
distributorship to be revokable in accordance with
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clauses 27 and 28 of the agreement. It is in this
sense that the award describes the Distributorship
Agreement as one for an indefinite period, that is,
till terminated in accordance with clauses 27 and 28.
The finding in the award being that the Distributorship
Agreement was revokable and the same being
admittedly for rendering personal service, the relevant
provisions of the Specific Relief Act were automatically
attracted. Sub-section (1) of Section 14 of the Specific
Relief Act specifies the contracts which cannot be
specifically enforced, one of which is ‘a contract which
is in its nature determinable’. In the present case, it
is not necessary to refer to the other clauses of sub-
section (1) of Section 14, which also may be attracted
in the present case since clause (c) clearly applies
on the finding read with reasons given in the award
itself that the contract by its nature is determinable.
This being so granting the relief of restoration of the
distributorship even on the finding that the breach was
committed by the appellant-Corporation is contrary to
the mandate in Section 14(1) of the Specific Relief
Act and there is an error of law apparent on the face
of the award which is stated to be made according
to ‘the law governing such cases’. The grant of this
relief in the award cannot, therefore, be sustained.”
(Emphasis Supplied)

47. The High Court of Madras in A Murugan and Others v Rainbow
Foundation Ltd and Ors., reported in 2019 SCC OnLine Mad 37961,
had further elaborated on the aspect of determinable contracts.
For the purpose of ascertaining determinability, the court bifurcated
contracts into several categories: (i) contracts that are unilaterally
and inherently revocable or capable of being dissolved such as
licenses and partnerships at will; (ii) contracts that are terminable
unilaterally on a “without cause” or “no fault” basis; (iii) contracts
that are terminable forthwith for cause or that cease to subsist “for
cause”, without a provision for remedying the breach; (iv) contracts
which are terminable for cause subject to a breach notice being
issued and an opportunity to cure the breach being given, and; (v)
contracts without a termination clause, which could be terminated for
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breach of a condition but not a warranty, as per applicable common
law principles. The court held that the abovementioned (iii), (iv)
and (v) categories of contract are not determinable contracts. The
court further observed that although the (iv) and (v) categories are
terminable yet the same cannot be said to be in nature determinable.
The relevant observations are as under:
“17. On examining the judgments on Section 21(d) of
SRA 1877 and Section 14(c) of the Specific Relief Act, as
applicable to this case, i.e. before Act 18 of 2018, I am
of the view that Section 14(c) does not mandate that all
contracts that could be terminated are not specifically
unenforceable. If so, no commercial contract would be
specifically enforceable. Instead, Section 14(c) applies to
contracts that are by nature determinable and not to all
contracts that may be determined. If one were to classify
contracts by placing them in categories on the basis of
ease of determinability, about five broad categories can
be envisaged, which are not necessarily exhaustive.
Out of these, undoubtedly, two categories of contract
would be considered as determinable by nature and,
consequently, not specifically enforceable : (i) contracts
that are unilaterally and inherently revocable or capable
of being dissolved such as licences and partnerships at
will; and (ii) contracts that are terminable unilaterally on
“without cause” or “no fault” basis. Contracts that are
terminable forthwith for cause or that cease to subsist
“for cause” without provision for remedying the breach
would constitute a third category. In my view, although
the Indian Oil case referred to clause 27 thereof, which
provided for termination forthwith “for cause”, the decision
turned on clause 28 thereof, which provided for “no fault”
termination, as discussed earlier. Thus, the third category
of contract is not determinable by nature; nonetheless,
the relative ease of determinability may be a relevant
factor in deciding whether to grant specific performance
as regards this category. The fourth category would be of
contracts that are terminable for cause subject to a breach
notice and an opportunity to cure the breach and the fifth
category would be contracts without a termination clause,
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which could be terminated for breach of a condition but
not a warranty as per applicable common law principles.
The said fourth and fifth categories of contract would,
certainly, not be determinable in nature although they
could be terminated under specific circumstances.
Needless to say, the rationale for Section 14(c) is that
the grant of specific performance of contracts that are
by nature determinable would be an empty formality
and the effectiveness of the order could be nullified by
subsequent termination.”
(Emphasis Supplied)

48. In Narendra Hirawat & Co. v. Sholay Media Entertainment Pvt. Ltd.,
reported in (2020) SCC OnLine Bom 391, the Bombay High Court
observed that the phrase “a contract which is in its nature determinable”
would mean a contract which is determinable at the sweet will of a
party to it, without reference to the other party or without reference to
any breach committed by the other party or without any eventuality
or circumstance. In other words, the phrase would contemplate a
unilateral right in a party to a contract to determine the contract without
assigning any reason. The relevant observation is as under:
“8. […] When the relevant provision [section 14(d) of the
Specific Relief Act] uses the words “a contract which is in
its nature determinable”, what it means is that the contract
is determinable at the sweet will of a party to it, that is
to say, without reference to the other party or without
reference to any breach committed by the other party or
without reference to any eventuality or circumstance. In
other words, it contemplates a unilateral right in a party
to a contract to determine the contract without assigning
any reason or, for that matter, without having any reason.
The contract in the present case is not so determinable; it
is determinable only in the event of the other party to the
contract committing a breach of the agreement. In other
words, its determination depends on an eventuality, which
may or may not occur, and if that is so, the contract clearly
is not “in its nature determinable”.”
(Emphasis Supplied)
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49. The Delhi High Court in DLF Home Developers Limited v. Shipra
Estate Limited, reported in 2021 SCC OnLine Del 4902, while
considering an agreement to sell a property held that the question
whether a contract is in its nature determinable must be answered
by ascertaining whether the party against whom it is sought to be
enforced would otherwise have the right to terminate or determine
the contract when the other party is willing to perform and is not in
default. In other words, where a contract cannot be terminated so
long as the other party remains willing to perform its part, such a
contract is not determinable and, in equity, is specifically enforceable.
The relevant observation is as under:
“78. Section 14 of the Specific Relief Act, 1963 sets
out certain classes of contracts that are not specifically
enforceable. One such class of contracts comprises
of contracts, which are in their nature determinable.
Clause (d) of Section 21 of the Specific Relief Act, 1877
expressly provided that contracts which are in their
nature ‘revocable’ are unenforceable. The said statute
was repealed and replaced by the Specific Relief Act,
1963. Clause (c) of Section 14(1) of the Specific Relief
Act, 1963, as was in force prior to Specific Relief Act,
1877, expressly provided that contracts, which are in the
nature determinable, were not specifically enforceable.
The word ‘revocable’ as used in Clause (d) of Section
21 of the Specific Relief Act, 1877 was replaced by the
word ‘determinable’. The rationale for excluding such
contracts, which are in their nature determinable, from
the ambit of those contracts which may be specifically
enforced, is apparent. There would be little purpose in
granting the relief of specific performance of a contract,
which the parties were entitled to terminate or otherwise
determine. The relief of specific performance is an
equitable relief. It is founded on the principle that the
parties to a contract must be entitled to the benefits
from the contracts entered into by them. However, if the
terms or the nature of that contract entitles the parties
to terminate the contract, there would be little purpose
in directing specific performance of that contract. Plainly,
no such relief can be granted in equity.
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⁠79. Viewed in the aforesaid perspective, it is at once
apparent that the contract is in its nature determinable if
the same can be terminated or its specific performance
can be avoided by the parties. Thus, contracts that can
be terminated by the parties at will or are in respect of
relationships, which either party can terminate; would be
contracts that in their nature are determinable. If a party
can repudiate the contract at its will, it is obvious that the
same cannot be enforced against the said party.
80. However, if a party cannot terminate the contract as
long as the other party is willing to perform its obligations,
the contract cannot be considered as determinable and it
would, in equity, be liable to be enforced against a party
that fails to perform the same. Almost all contracts can
be terminated by a party if the other party fails to perform
its obligations. Such a contract cannot be stated to be
determinable solely because it can be terminated by a
party if the other ⁠party is in breach of its obligations. The
party who is not in default would, in equity, be entitled to
seek performance of that contract. In such cases, it cannot
be an answer to the non-defaulting party’s claim that the
other party could avoid the contract of the party seeking
specific performance, had breached the contract; therefore,
the same is not specifically enforceable. Thus, the question
whether a contract is in its nature determinable, must be
answered by ascertaining whether the party against whom
it is sought to be enforced would otherwise have the right
to terminate or determine the contract even though the
other party are ready and willing to perform the contract
and are not in default.
81. The contention advanced on behalf of Indiabulls that
the ATS is in its nature determinable as Indiabulls could
terminate it on failure of ⁠the other parties to perform
their obligations is, plainly, unmerited. This contention
is premised on the basis that Indiabulls is correct in its
assumption that the other parties had breached the terms
of their obligation. Concededly, if the other parties were
ready and willing to fully perform their obligations, Indiabulls
would not have any recourse to the termination clause.
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Such recourse is contingent on the failure of the other
parties to perform the contract. It cannot be stated that the
contract by its very nature is not specifically enforceable
because it entitles a party to terminate the contract if the
other parties have failed to perform their obligations.

xxx xxx xxx
94. The question whether the contract by its very
nature is determinable is required to be answered by
ascertaining the nature of the contract. Contracts of agency,
partnerships, contracts to provide service, employment
contracts, contracts of personal service, contracts where
the standards of performance are subjective, contracts
that require a high degree of supervision to enforce, and
contracts in perpetuity are, subject to exceptions, in their
nature determinable. These contracts can be terminated
by either party by a reasonable notice.
(Emphasis Supplied)

50. In Affordable Infrastructure & Housing Projects (P) Ltd. v.
Segrow Bio Technics India (P) Ltd., reported 2022 SCC OnLine
Del 4436, the lease deed provided for a termination clause. Under
the termination clause, the respondent had an option to terminate
the lease deed by serving a 15 days’ written notice in case the
petitioner failed to make the payment for two consecutive months.
The Delhi High Court on the strength of DLF Home (supra) observed
that almost all contracts can be terminated by a party, if the other
party fails to perform its obligations and that such contracts cannot
be stated to be determinable solely because it can be terminated
by a party if the other party is in breach of an obligation. The non-
defaulting party would in equity be entitled to seek performance of
that contract. The court held that the question whether a contract is
in its nature determinable must be answered by ascertaining whether
the party against whom it is sought to be enforced would otherwise
have a right to terminate or determine the contract even though the
other party is ready and willing to perform the contract and is not in
default. The relevant observation is as under:
“37. The law as stated above mandates against grant of
stay against Termination Notice in respect of the Contracts
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which are determinable. The petitioner has relied upon
DLF Home Developers Limited v. Shipra Estate Limited,
(2022) 286 DLT 100, wherein it was observed that a party
cannot terminate the Contract so long as the other party
is willing to perform its obligations. The Contract cannot
be considered as determinable as it would in equity be
liable to be enforced against a party that fails to perform
the same. Almost all Contracts can be terminated by a
party, if the other party fails to perform its obligations. Such
a Contract cannot be stated to be determinable solely
because it can be terminated by a party if the other party
is in breach of the obligations. The party who is not in
default would in equity be entitled to seek performance of
that Contract. In such cases, it cannot be an answer to a
non-defaulting party’s claim that the other party could avoid
the Contract of the party seeking specific performance and
the same is not specifically enforceable. Thus, the question
whether the Contract is in its nature determinable must
be answered by ascertaining whether the party against
whom it is sought to be enforced would otherwise have a
right to terminate or determine the Contract even though
the other party is ready and willing to perform the Contract
and is not in default.”
(Emphasis Supplied)

51. The Bombay High Court in Kheoni Ventures (P) Ltd. v. Rozeus
Airport Retail Ltd., reported in 2024 SCC OnLine Bom 773, also
observed that in order to arrive at a conclusion whether a contract
is determinable or not, it is to be ascertained whether the parties
have a right to terminate it on their own, without the stipulation of
any contingency and without assigning any reason. The relevant
observation is as under:
“11. In order to infer whether a contract is determinable
or otherwise, it is to be ascertained, whether the parties
have a right to terminate it on their own, without stipulation
of any contingency and without assigning any reason. An
inherently determinable contract would permit either party
to terminate it without assigning any reason and merely by
indicating, that the contract shall come to an end, either
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by giving a notice for specified period, if stipulated or even
without such a notice.”
(Emphasis Supplied)

52. Having discussed the law on unilateral termination vis-a-vis
determinable contracts as above, we now advert to the facts of
the present matter. The existence of the ATS executed between
the original vendors and the original vendees is not in dispute.
The question that falls for our consideration is with respect to the
requirement of seeking a declaration from the court as regards the
legality and validity of the purported termination of the said ATS by
the notice of termination dated 10.03.2003 issued by the original
vendors. It may not be out of place to state at this stage that the
ATS in question does not contain any clause enumerating the events
of default under which the ATS could be terminated. Nor is it the
case of the parties that time was made the essence of contract. In
fact, the Trial Court has already gone into this issue and held that
the terms of the ATS did not reflect any intention to make time the
essence of the contract as no specific date for execution of the sale
deed is to be found in the ATS. Clause 7 of the ATS clearly provides
that upon change of entries in the record of rights from new tenure
to old tenure, the sale deed would be executed. Clause 11 further
provides that it was for the original vendors to intimate the original
vendees upon completion of the work of sub-division, survey, and
fixation of boundary of the subject land, and only thereafter the sale
deed was to be executed within one month of such intimation. Thus,
the execution of the sale deed was pegged not to a fixed date but to
future contingencies dependent upon the acts of the original vendors
themselves. There is nothing on record to indicate that the original
vendors had performed their part of the obligation by informing the
original vendees about the completion of the work of sub-division,
survey, and fixation of boundary of the subject land.
53. Despite such stipulations, the original vendors issued the notice of
termination dated 10.03.2003 upon the original vendees purporting
to terminate the ATS on two grounds, namely, (i) the pendency of
Original Suit No. 30 of 2001 and the order of status quo therein,
and (ii) the death of one of the original vendors, i.e. Late Smt.
Godavari @ Mahalaxmi Kulkarni. The notice also called upon the
original vendees to take back the earnest money paid and to treat
[2025] 12 S.C.R. 99

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

the ATS as cancelled within one month, failing which the ATS would
be deemed to have been cancelled and the original vendors would
be at liberty to deal with the land.
54. We have given our thoughtful consideration to the reasons so assigned
in the notice of termination. We find it difficult to accept that either of
the grounds could constitute a valid basis for terminating the ATS.
The pendency of a civil suit and an order of status quo therein cannot
by itself frustrate the ATS. At the highest, the performance of the
ATS could have stood suspended pending the disposal of the said
proceedings. Since the original vendees had no role to play in the
institution or continuance of the Original Suit No. 30 of 2001, they
could not have been made to suffer the consequences of a litigation
to which they were complete strangers. Likewise, the death of one
of the original vendors did not and could not have absolved the
other remaining vendors of their obligations. The legal heirs could
have very well stepped into the shoes of the deceased vendor and
performed the contract. The reasons assigned, therefore, appears
not only tenuous but also wholly extraneous to the obligations of the
original vendors. It is also pertinent to note that the original vendees
immediately responded to the notice of termination by way of their
detailed reply dated 21.03.2003. In the said reply, the original vendees
categorically denied the validity of the termination and refuted the
grounds stated therein. In the reply, the original vendees asserted that
they had already performed their obligations by making substantial
payments of Rs. 8,12,500/- out of the total sale consideration of
Rs. 26,95,501/-, by getting the land surveyed, measured, boundaries
fixed, and the tenure converted on the original vendors’ behalf. The
original vendees also asserted that the performance of ATS was only
suspended by virtue of the status quo order which could not have
rendered the ATS impossible of performance and that the death
of one of the vendors did not in law affect the enforceability, and
thus, the ATS remained subsisting. They further made it clear that
in such circumstances there was no question of refund of earnest
money at all.
55. Despite such a categorical stance of the original vendees, no
response was sent by the original vendors to further assign reasons
or substantiate the termination. The original vendors chose to remain
silent, content to live off their unilateral notice without taking the
termination to its logical conclusion. This conduct on the part of the
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original vendors cannot be countenanced as a bona fide exercise. We
are of the firm view that the ATS being non-determinable in nature
(as discussed below), no unilateral expression of termination could
have lawfully extinguished the obligations undertaken thereunder.
What emerges from the record is that the grounds cited in the
notice of termination were pressed into service more as a matter of
convenience to the original vendors rather than as a consequence
of any breach or failure attributable to the original vendees. The
pendency of an earlier suit and the death of one of the vendors
were circumstances wholly extraneous to the performance of the
ATS and incapable in themselves of furnishing a lawful foundation
for termination. Such grounds merely afforded a convenient pretext
to the original vendors to disown their obligations. We are of the
firm view that the law ought not be read in a manner to permit the
original vendors to invoke convenience as a cloak for such unilateral
cancellation of the ATS.
56. It is further significant to note that in the notice of termination dated
10.03.2003, the original vendors purported to call upon the original
vendees to “take back” the earnest money and other amounts
already paid under the ATS. However, the record reveals that even
after issuance of the said notice and despite original vendees
having immediately repudiated the termination of ATS through their
reply dated 21.03.2003, no steps whatsoever were taken by the
original vendors to actually effectuate the refund. No draft, cheque,
or any other mode of repayment was tendered at any point of
time. In substance, therefore, the recital in the notice asking the
original vendees to “take back” the money was nothing more than
an empty formality, bereft of any real intent to restore the parties
to their respective original positions. This conduct of the original
vendors assumes significance for more than one reason. First,
none of the clauses of the ATS empowered the original vendors to
either terminate the agreement unilaterally or to forfeit the earnest
money. Secondly, if the original vendors were genuinely desirous
of putting an end to the ATS, the natural and necessary corollary of
such termination would have been to refund the amounts received
without casting upon the original vendees the burden of physically
claiming or taking back what was rightfully theirs. It appears from the
conduct of the original vendors that by seeking to shift the burden
in this manner, the original vendors sought to cloak their inaction
[2025] 12 S.C.R. 101

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Batil, Since Deceased by His Lrs and Other

and conveniently get rid of themselves of the obligations flowing
from the ATS, while continuing to retain the monies that had been
paid towards part performance of the ATS by the original vendees.
Termination, if at all validly effected, requires both relinquishment of
rights under the contract and restitution of benefits already received.
In failing to refund the earnest money, the original vendors not only
acted contrary to the terms of the ATS which contained no clause
of forfeiture but also demonstrated the lack of bona fide intention
to truly rescind the agreement. If indeed the original vendors were
assiduous in their attempt to bring the ATS to an end, in principle
they should have approached a competent court to seek a declaration
as to the termination of contract as observed by various precedents
as above-mentioned.
57. We are of the view, having regard to the peculiar and distinguishable
facts of the present case, that the decisions of this Court in
I.S. Sikander (supra) and Sangita Sinha (supra) would not be of any
help to the subsequent purchasers as both of them are distinguishable
as far as the present case is concerned.
58. The reliance placed by the subsequent purchasers upon the decision
of this Court in I.S. Sikandar (supra), in our considered view, is
wholly misconceived. The factual foundation of I.S. Sikandar (supra)
was materially distinct from the circumstances of the present case
and therefore, the ratio thereof cannot be invoked to the aid of the
subsequent purchasers herein. In I.S. Sikandar (supra), the purchaser
had defaulted in performing his part of the contract despite being
afforded multiple opportunities by the vendors. The vendors therein
had, by way of a legal notice, specifically called upon the purchaser
to tender the balance sale consideration and complete the execution
of the sale deed within a stipulated period. Upon the purchaser’s
failure to comply, the vendors further extended the time, coupled
with a caveat that if the purchaser did not perform his obligations
by the extended date, the agreement would stand terminated. It
was only after the purchaser again defaulted, despite such repeated
opportunities, that the vendors terminated the agreement. In such
circumstances, this Court held that the purchaser could not maintain
a suit for specific performance without first seeking a declaration
that the termination was invalid, since by his own conduct he had
allowed the agreement to become determinable and its termination
was rooted in his own breach. However, the present case stands on
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an entirely different footing. The alleged termination was not preceded
by any call upon the original vendees to perform their obligations
nor was any opportunity granted to the original vendees to tender
the balance sale consideration or secure execution of the sale deed.
On the contrary, the original vendors sought to terminate the ATS
citing reasons entirely extraneous to the performance of the original
vendees. In I.S. Sikandar (supra), the termination was an outcome of
the purchaser’s repeated failure to perform his contractual obligations
despite reminders and extensions, thereby rendering the agreement
determinable. In contrast, the termination in the present case was
a unilateral act of convenience on the part of the original vendors
unconnected with any default on the part of the original vendees in the
performance of ATS. This unilateral termination was effected without
any preceding notice, without opportunity to the original vendees of
further performance, and without refund of earnest money.
59. Further, the decision in Sangita Sinha (supra) is also distinguishable
for in that case this Court held the suit for specific performance to
be not maintainable owing to the absence of a declaratory relief,
since the vendee’s act of encashing the demand drafts amounted to
acceptance of the vendor’s repudiation and having no readiness and
willingness to perform the contract, thereby effectively cancelling the
agreement to sell, whereas, in the present case, the termination was
effected by the original vendors despite the readiness and willingness
of original vendees, which we shall discuss below, and despite the
fact that no part of the earnest money or any further sums paid by
the original vendees was ever refunded by the original vendors while
terminating the ATS.
60. In fact, as explained in Brahm Dutt (supra), the unilateral cancellation
of an agreement to sell is impermissible except where the agreement
is determinable within the meaning of Section 14 of the Act of 1963.
This principle now stands affirmed by this Court also in Brahm Dutt
(supra), Balwinder Sarpal (supra) and S.K. Ravichandran (supra)
respectively.
61. In view of the above discussion, it is as clear as a noon day that
as far as the facts of present case are concerned, the notice of
termination dated 10.03.2003 was nothing but a unilateral act of
repudiation by the original vendors. As discussed above, the ATS
contained no clause permitting termination in the circumstances cited.
The reasons relied upon by the original vendors for termination were
[2025] 12 S.C.R. 103

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

matters over which the original vendees had no control. Further, the
act of the original vendors merely asking the original vendees to “take
back” the monies paid, while never actually refunding it, reinstates
that the alleged termination was not genuine on their part but rather
a device of convenience to escape their contractual obligations
under the ATS. Moreover, there is no evidence on record to indicate
that the original vendors ever called upon the original vendees to
perform their part of the contract prior to such termination. In view
of all that is stated above, the termination of ATS vide notice of
termination dated 10.03.2003 was not only unilateral but also not
bona fide and cannot be sustained. Once such termination is found
to be invalid, what next follows is that the ATS continues to remain
alive, subsisting, and executable. Further, as the law subsists, once
the alleged termination of agreement in question is found to be not
bona fide and being done in a unilateral manner, no declaration
challenging the alleged termination is required.
62. Since in principle unilateral termination of the contract is impermissible
except where the agreement is determinable within the meaning
of Section 14 of Act of 1963, it also becomes necessary, at this
juncture, to examine whether the ATS dated 28.04.2000 was in its
nature determinable. This question requires to be answered on a
scrutiny of the terms of the ATS and the nature of the rights and
obligations flowing therefrom.
63. On perusal of the clauses of the ATS, it becomes clear that none
of the terms thereof conferred upon either party any right to
unilaterally terminate or rescind the contract, whether for cause, for
convenience, or on the happening of any contingency. The scheme
of the contract, as discernible from its clauses, particularly clauses 7
and 11 respectively, indicate that the execution of the sale deed was
made conditional upon the fulfilment of certain antecedent events,
namely, the conversion of the subject land from new tenure to old
tenure and the completion of the work of sub-division. Clause 7 of
the ATS contemplated that upon change of entries in the record of
rights from new tenure to old tenure, the sale deed would be executed
whereas clause 11 provided that it was for the original vendors to
intimate the original vendees about the completion of the work of
sub-division, survey, and fixation of boundary of the subject land,
and only thereafter the sale deed was to be executed within one
month of such intimation. It is therefore clear that the ATS was not
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a contract conferring any right upon either party to bring it to an end
at will. Its life and performance were tethered to the completion of
certain obligations. None of the clauses of the ATS envisaged that
the same could be terminated on any cause or no-cause basis, much
less that the original vendors could retain the amounts already paid
by the original vendees.
64. In this backdrop, it would be useful to advert to the classification
set out in A. Murugan (supra), wherein the Madras High Court
categorised contracts into five broad classes depending on their
ease of determinability. Out of those, the first two i.e., (i) contracts
inherently revocable such as licences and partnerships at will,
and (ii) contracts terminable unilaterally on a “without-cause” basis,
were held to be determinable in nature. The remaining classes,
namely, (iii) contracts terminable for cause without provision for cure,
(iv) contracts terminable for cause with notice and opportunity to cure,
and (v) contracts without a termination clause but terminable only
for breach of a condition, were all held not determinable in nature.
65. Further, as laid down in DLF Home (supra), the question whether a
contract is in its nature determinable lies in ascertaining whether the
party against whom specific performance is sought has the right to
terminate the contract even when the other party is ready and willing
to perform. This means if the contract cannot be terminated so long
as the other party stands willing to perform, it is not determinable
in its nature and would, in equity, be specifically enforceable. The
same reasoning was followed in Affordable Infrastructure (supra),
where it was held that a contract terminable for breach cannot merely
for that reason be regarded as determinable, otherwise, no contract
could ever be specifically enforced.
66. Applying these principles, the ATS in the present case cannot be said
to be a determinable contract. Viewed in light of the classification as
set out in A. Murugan (supra), the ATS would squarely fall within
category (v) as mentioned above. The ATS was devoid of any clause
enabling termination for convenience or otherwise empowering either
party to terminate unilaterally. The only conceivable circumstance in
which ATS could be brought to an end in the present case was upon
a breach of a condition by either of the parties. Thus, the original
vendors did not possess any contractual right to terminate the ATS in
the absence of default by the original vendees. The grounds cited in
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K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

the notice of termination dated 10.03.2003, namely, the subsistence
of a status quo order and the death of one of the original vendors
cannot be said to be based on any default or breach by the original
vendees. The original vendees had performed their part by paying
a substantial amount and were also ready and willing to perform
the terms of ATS.

(II). Bona fides of the subsequent purchasers in purchasing
the subject land
67. The counsel for subsequent purchasers submitted that appellants /
subsequent purchasers are bona fide purchasers of the subject land
for value without the notice of the prior ATS. It is the case of the
subsequent purchasers that they made bona fide enquires about the
title of the original vendors and all other particulars that they could
enquire upon. The case of the subsequent purchasers before the
Trial Court and High Court respectively was that they had purchased
the subject land on the information and instructions furnished by the
original vendors wherein the subsequent purchasers were informed
that the original vendors had a clear and alienable title on the subject
land and that the ATS executed in favour of the original vendees
had been terminated by the original vendors by issuing the notice
of termination dated 10.03.2003. The subsequent purchasers have
admitted that they were made aware of the termination of the ATS
by the original vendors and were handed over a copy of the notice
of termination by the original vendors prior to their purchase of the
subject land. It is also the case of the subsequent purchasers that
they had verified the documents of title of the original vendors and
had also ascertained that the Original Suit No. 30 of 2001 had been
withdrawn and the status quo order has come to an end due to such
withdrawal. The subsequent purchasers have further submitted that
from the date of execution of sale deeds dated 20.02.2007 and
02.03.2007 executed by the original vendors in their favour, they
are in physical possession of the subject land and their names have
been mutated in the revenue records.
68. In such circumstances referred to above, the subsequent purchasers
are seeking to bring themselves within the status of a bona fide
purchaser under Section 19(b) of the Act of 1963. Section 19 provides
for the categories of persons against whom specific performance
of a contract may be enforced. Amidst all, Clause (b) of Section 19
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states that specific performance may be enforced against any
other person claiming under him by a title arising subsequently to
the contract except a transferee for value who has paid his money
in good faith and without notice of the original contract. Thus, a
transferee for value who has paid his money in good faith and
without notice of the original contract is excluded from the purview
of the said clause. In the case of Ram Niwas v. Bano, reported
in (2000) 6 SCC 685, this Court had set out three factors that a
subsequent transferee must show to fall within the excluded class:
(a) he has purchased for value the property, which is the subject
matter of the suit for specific performance; (b) he has paid his
money to the vendor in good faith; and (c) he had no notice of the
earlier contract for sale specific performance of which is sought to
be enforced against him. The court observed that “notice” can be
(i) actual notice or (ii) constructive notice, or (iii) imputed notice. As
per Section 3 of Transfer of Property Act, 1882, a person is said to
have notice of a fact when he actually knows that fact or when but
for wilful abstention from inquiry or search which he ought to have
made, or gross negligence, he would have known it. The relevant
observation is as under:
“3. Section 19 provides the categories of persons against
whom specific performance of a contract may be enforced.
Among them is included, under clause (b), any transferee
claiming under the vendor by a title arising subsequently
to the contract of which specific performance is sought.
However, a transferee for value, who has paid his money
in good faith and without notice of the original contract,
is excluded from the purview of the said clause. To fall
within the excluded class, a transferee must show that:
(a) he has purchased for value the property (which is
the subject- matter of the suit for specific performance of
the contract); (b) he has paid his money to the vendor in
good faith; and (c) he had no notice of the earlier contract
for sale (specific performance of which is sought to be
enforced against him).
4. The said provision is based on the principle of English
law which fixes priority between a legal right and an
equitable right. If ‘A’ purchases any property from ‘B’ and
thereafter ‘B’ sells the same to ‘C’ the sale in favour of ‘A’,
[2025] 12 S.C.R. 107

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being prior in time, prevails over the sale in favour of ‘C’
as both ‘A’ and ‘C’ acquired legal rights. But where one is
a legal right and the other is an equitable right
“a bona fide purchaser for valuable consideration
who obtains a legal estate at the time of his purchase
without notice of a prior equitable right is entitled to
priority in equity as well as at law”. (Snell’s Equity —
13th Edn., p. 48.)
This principle is embodied in Section 19(b) of the Specific
Relief Act.
5. It may be noted here that “notice” may be (i) actual, (ii)
constructive, or (iii) imputed.”
(Emphasis Supplied)

69. Similarly, in Durg Singh v. Mahesh Singh, reported in 2004 SCC
OnLine MP 9, the Madhya Pradesh High Court had observed that
there are two factors that are necessary for the adjudication of suit
for specific performance of the contract where the subject matter
property has been sold to a subsequent purchaser: (i) that whether
the plaintiff remained always ready and willing to perform his part
of the contract to purchase the suit property and the readiness and
willingness should exist till the date of the passing of the decree, and
(ii) that whether subsequent transferee was having prior knowledge
of the earlier agreement executed in favour plaintiff. Both these
factors need to have nexus with the facts of each case and conduct
of parties. The relevant observation is as under:
“11. In a suit of specific performance of the contract where
the property in dispute has been sold to the subsequent
purchaser, two things are necessary for the adjudication,
they are; (i) that whether the plaintiff remained always ready
and willing to perform his part of the contract to purchase
the suit property and the readiness and willingness should
exist till the date of the passing of the decree; and (ii)
whether the subsequent transferee was haying prior
knowledge of the earlier agreement executed in favour
of plaintiff. In other words, we may say that if plaintiff
fails to plead and prove by his conduct the readiness
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and willingness to purchase the suit property and if the
subsequent purchaser was a bona fide purchaser without
prior notice of the original contract who had paid the value
of the suit property to the vendor, the suit of specific
performance cannot be decreed. Both these essential
ingredients are having nexus with the facts of each case
as well as the conduct of the parties of that case. No
straight-jacket formula can be framed in this regard and
each case should be tested on the touchstone of its own
facts and circumstances coupled with the evidence. Thus,
I shall now examine the present case in that regard.”
(Emphasis Supplied)

70. The expression “wilful abstention from inquiry or search” recalls the
expression used by Sir James Wigram VC in the case of Jones v.
Smith, reported in (1841) 1 Hare 43, wherein the High Court of
Chancery of England & Wales had held that constructive notice is
basically a manifestation of equity which treats a man who ought to
have known a fact, as if he had actually known it. The court noted that:
“It is, indeed, scarcely possible to declare a priori what shall
be deemed constructive notice, because, unquestionably,
that which would not affect one man may be abundantly
sufficient to affect another. But I believe, I may, with
sufficient accuracy for my present purpose and without
danger assert that the cases in which constructive notice
has been established resolve themselves in two classes:
First, cases in which the party charged has had actual
notice that the property in dispute was in fact charged,
encumbered or in some way affected, and the court has
thereupon bound him with constructive notice of facts and
instruments, to a knowledge of which he would have been
(sic) led by an enquiry after the charge, encumbrance or
other circumstances affecting the property of which he had
actual notice; and secondly, cases in which the court has
been satisfied from the evidence before it that the party
charged had designedly abstained from enquiry for the
very purpose of avoiding notice [...]”
(Emphasis Supplied)
[2025] 12 S.C.R. 109

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Batil, Since Deceased by His Lrs and Other

71. Similar to the importance of the term “notice” used in Section 19(b)
of the Act of 1963, the term “good faith” which is also used in
Section 19(b) is equally important. The term “good faith” is defined
in Section 3(22) of the General Clauses Act, 1897 (for short, “GC
Act”) as well as Section 2(11) of the Bhartiya Nyaya Sanhita, 2023
(for short, “BNS”). Section 3(22) of GC Act defines “good faith” is
defined in the following terms:
“3(22). A thing shall be deemed to be done in good
faith where it is in fact done honestly whether it is done
negligently or not.”
72. Section 2(11) of the BNS defines “good faith” in the following terms:
“2(11). “Good faith - Nothing is said to be done or believed
in “good faith” which is done or believed without due care
and attention”
73. Therefore, in order to come to a conclusion that an act was done in
good faith it must have been done with (i) due care and attention, and
(ii) there should not be any dishonesty. This Court recently in case
of Manjit Singh v. Darshana Devi, reported in 2024 SCC OnLine
3431, wherein one of us, J.B. Pardiwala, J., forming a part of the
Bench, construed the usage of the term “good faith” under Section
19(b) of the Act of 1963 in the above sense and held that each of
the abovementioned aspects is a complement to the other and not
an exclusion of the other. This Court observed that the definition of
the BNS emphasizes due care and attention whereas the definition
of the GC Act emphasizes honesty. The relevant observation is as
under:
“13. Section 3(2) of the General Clauses Act defines ‘good
faith’ as follows:—
3(22). A thing shall be deemed to be done in good
faith where it is in fact done honestly whether it is
done negligently or not.
14. Section 2(11) of the Bhartiya Nyaya Sanhita, 2023
defines “good faith”, as follows:—
2(11). “Good faith- Nothing is said to be done or
believed in “good faith” which is done or believed
without due care and attention;
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15. The abovesaid definitions and the meaning of the term
‘good faith” indicate that in order to come to a conclusion
that an act was done in good faith it must have been done
with due care and attention and there should not be any
negligence or dishonesty. Each aspect is a complement to
the other and not an exclusion of the other. The definition of
the Penal Code, 1860 emphasises due care and attention
whereas General Clauses Act emphasises honesty.
16. The effect of abstention on the part of a subsequent
purchaser, to make enquiries with regard to the possession
of a tenant, was considered in Ram Niwas v. Bano, (2000)
6 SCC 685 […]
17. In the case reported in Kailas Sizing, Works v.
Municipality, B. & N., reported in 1968 Bombay Law
Reporter 554, the Bombay High Court observed as
follows:—
A person cannot be said to act honestly unless he acts
with fairness and uprightness. A person who acts in
a particular manner in the discharge of his duties in
spite of the knowledge and consciousness that injury to
someone or group of persons is likely to result from his
act or omission or acts with wanton or wilful negligence
in spite of such knowledge or consciousness cannot
be said to act with fairness or uprightness and,
therefore, he cannot be said to act with honesty or
in good faith. Whether in a particular case a person
acted with honesty or not will depend on the facts of
each case. Good faith implies upright mental attitude
and clear conscience. It contemplates an honest effort
to ascertain the facts upon which the exercise of the
power must rest. It is an honest determination from
ascertained facts. Good faith precludes pretence,
deceit or lack of fairness and uprightness and also
precludes wanton or wilful negligence.”
(Emphasis Supplied)

74. This aspect also deserves a reference to the case of Jammula Rama
Rao v. Merla Krishnaveni, reported in 2002 SCC OnLine AP 646,
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wherein the Andhra Pradesh High Court while holding that honesty is
the essential condition in ‘good faith’ observed that when subsequent
purchasers were informed about the existence of the agreement in
favour of the prior vendee, then the subsequent purchasers should
have made enquiries from the prior vendee to satisfy themselves
whether the agreement in favour of prior vendee is only a nominal
one as alleged by the vendors. The court held that the failure on
the part of the subsequent purchasers in not conducting such an
enquiry with the prior vendee would render them susceptible to the
complaint that subsequent purchasers had not acted honestly and
in good faith. The relevant observation is as under:
“7. In view of the language employed in Sec. 19(b) of
Specific Relief Act, the subsequent purchaser has to
establish that he paid money in good faith, without notice
of the original contract. Since ‘good faith’ is not defined in
Specific Relief Act, its meaning has to be understood from
the definition of ‘good faith’ in General Clauses Act, 1897,
Sub-sec. 22 of Sec. 3 of General Clauses Act, defined
‘good faith’ as “a thing shall be deemed to be done in ‘good
faith’ if it is done honestly”. So, honesty is the essential
condition in ‘good faith’. When appellants, were informed
about the existence of the suit agreement in favour of the
1st respondent, appellants should have made enquiries
from the 1st respondent to satisfy themselves whether the
agreement in favour of 1st respondent is only a nominal
one, as alleged by respondents 2 to 5. If they have not
done so, it cannot be said that they acted honestly, and
consequently it cannot be said that appellants acted in
good faith.”
(Emphasis Supplied)

75. At the outset, it must be noted that the subsequent purchasers have
themselves admitted that prior to their purchase they were handed
over a copy of the notice of termination dated 10.03.2003 by the
original vendors and were also specifically informed that the ATS
stood terminated by virtue of the said notice. This single fact is of
decisive importance. The said notice of termination in the present
case is not a peripheral document, rather, it is a self-contained
recital of the very material terms of the contract. The said notice
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of termination makes a clear reference to the fact of existing ATS
dated 28.04.2004 and the material terms agreed therein including
but not limited to the description of subject land, area of the subject
land agreed to be sold, sale consideration, payment of earnest
money and payment stages thereafter, and names and residential
addresses of the original vendees. Thus, by their own admission,
the subsequent purchasers were put in possession of all material
particulars of the ATS. Having been confronted with a document
of this character, no prudent purchaser acting in good faith could
have remained passive. The subsequent purchasers had at their
disposal clear and concrete means to demand from the original
vendors a copy of the ATS itself or at the very least verify from the
original vendees the correctness of the assertions contained in the
notice of termination, however, the subsequent purchasers chose
not to pursue either course.
76. Further, the operative portion of the notice of termination itself ought
to have aroused curiosity in the mind of any bona fide purchaser. The
said notice did not state that the ATS stood terminated on 10.03.2003.
Instead, in the notice of termination, the original vendees were called
upon by the original vendors to “take back” their earnest money within
a period of one month from the date of the notice of termination
and upon their failure to take the earnest money back in one month
the ATS would be ‘deemed’ cancelled. The plain implication of this
stipulation is that the ATS did not in fact stand terminated on the
date of notice of termination i.e., 10.03.2003, rather any effective
termination of the ATS would have arose, if at all, only a month later,
that too, in the event of inaction by the original vendees. This aspect
alone should have been a giveaway to the subsequent purchasers
when they came to purchase the subject land in 2007 because a bona
fide purchaser acting with due care and attention would necessarily
have inquired whether the earnest money had in fact been refunded
by the original vendors and accepted by the original vendees with or
without protest, or whether the original vendees had contested the
termination or what had transpired after the period of one month. This
is especially so because the date of notice of termination could not
have been the date of actual termination and deemed termination
would have followed only if no response was afforded by the original
vendees within one month. Had the subsequent purchasers made
such an inquiry, it would have been revealed to them that not only
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K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

was no refund ever made by the original vendors but that the original
vendees had immediately repudiated the validity of the termination
by their reply dated 21.03.2003.
77. Moreover, the sequence of events in and around the notice of
termination and the impleadment application filed by the original
vendees in the Original Suit No. 30 of 2001 also carries considerable
weight. The subsequent purchasers have admitted that they had
ascertained that the original vendees had moved an application
for impleadment in the Original Suit No. 30 of 2001 on 02.05.2001
which came to be dismissed only on 16.03.2005. Significantly, the
alleged termination of the ATS by the original vendors was during
this very interregnum i.e., on 10.03.2003. This sequence of events
was sufficient to raise a suspicion in the mind of any prudent bona
fide purchaser that if the said ATS is said to have been terminated
on 10.03.2003 by the original vendors then what were the original
vendees trying to achieve by seeking to implead themselves in the
Original Suit No. 30 of 2001 until 2005. In other words, a reasonable
man, apprised of both these events, would have asked that if the
ATS stood cancelled in 2003 what then were the original vendees
still seeking in the Original Suit No. 30 of 2001 until 2005. This
glaring inconsistency ought to have raised a suspicion. Instead, the
subsequent purchasers ignored everything and confined themselves
to the ipse dixit of the original vendors.
78. The language of the termination notice itself discloses the unilateral
and self-serving character of the so-called termination. A bare
reading of the notice of termination shows that the original vendors
had stated therein that due to the status quo order in effect and the
death of one of the original vendors, they were “unable to execute
a regular sale deed in respect of land in question” and that they
“cannot wait for an indefinite period”. Thus, the original vendors cited
their own inability to execute a sale deed in view of the status quo
order operating in the Original Suit No. 30 of 2001 and the death of
one of the original vendors. Such grounds, as already discussed,
were matters of inconvenience very much personal to the original
vendors and not the breaches attributable to the original vendees.
The subsequent purchasers, upon a bare reading of the said notice
of termination, ought to have made inquiries to ascertain whether
the original vendees had challenged the factum of termination by
any subsequent communication. This was all the more necessary
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because the language employed by the original vendors in the
notice of termination itself clearly gave away that what was being
asserted was not a termination arising out of any breach or default
attributable to the original vendees but rather a unilateral act
grounded in the original vendors’ own inability and inconvenience.
It is a trite law that a subsequent purchaser who relies merely on
the assertions of the vendor or who chooses to remain content
with his own limited knowledge while consciously abstaining from
making further inquiry into the subsisting interests in the property
cannot escape the consequences of deemed notice. Equity ought not
assist a transferee who deliberately avoids the truth that lies open to
discovery. Thus, a purchaser who has before him a document which
on its very face shows the termination to be unilateral and rooted in
the vendors’ inconvenience cannot by shutting his eyes claim the
benefit of “good faith”.
79. Even more significant is the fact that the subsequent purchasers had
sufficient means to unearth the prudent queries as the same notice of
termination that subsequent purchasers have gone through provided
all means to them to contact the original vendees. This is because
the notice of termination itself provided the names and addresses
of all the original vendees. Thus, the subsequent purchasers had in
their hands the most direct and reliable means of verifying the truth
of the assertions made by the original vendors. They could, with little
effort, have contacted the original vendees to ascertain whether the
ATS had indeed been terminated or whether any amount had been
refunded. Their deliberate abstention from this inquiry despite having
the means readily available cannot be dismissed as mere oversight.
It would constitute in the words of Sir James Wigram VC “designed
abstention for the very purpose of avoiding notice”.
80. The law as stated above is unequivocal on this point. In Ram Niwas
(supra), this Court laid down that to claim protection under Section
19(b) of the Act of 1963, the purchaser must show three things: (a)
purchase for value, (b) payment in good faith, and (c) absence of
notice of the earlier contract. “Notice”, it was emphasized, includes
not merely actual knowledge but also constructive and imputed
knowledge. In Durg Singh (supra), the Madhya Pradesh High
Court reiterated that bona fide purchase depends inter alia on the
purchaser’s knowledge of the prior agreement. In Jammula Rama
Rao (supra), the Andhra Pradesh High Court went further and held
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that where subsequent purchasers were aware of the existence
of a prior agreement, their failure to make inquiries from the prior
vendees negated both honesty and good faith.
81. From the discussion as above, what can be deduced is that the
subsequent purchasers had sufficient notice of the facts that an ATS
dated 28.04.2000 existed; the names and addresses of the original
vendees; that an earnest money amounting to Rs. 2,00,000/- had
been paid by the original vendees to the original vendors; that the
original vendors had sought to terminate the ATS due to their inability
to execute the sale deed in favour of the original vendees on account
of a status quo order; that the date of actual termination could not
have coincided with the date of notice; and that deemed termination
would have arose only if the original vendees had failed to claim
the earnest money within one month; and that despite the issuance
of the notice of termination in 2003, the original vendees continued
to contest the impleadment application in the Original Suit No. 30
of 2001 until 2005. These circumstances should have reasonably
aroused suspicion or at the very least prompted further inquiry by
any prudent bona fide purchaser. Yet the subsequent purchasers
despite having ample opportunity to become aware of these facts
abstained from making any such inquiries. It is therefore beyond cavil
that the subsequent purchasers cannot take shelter under Section
19(b) of the Act of 1963. Far from showing honesty and due care,
their conduct reveals studied indifference to facts which were staring
them in the face.

(III). Readiness and willingness of the Original Vendees to
perform the ATS
82. Section 16(c) of the Act of 1963 requires that a plaintiff must both plead
and prove that he has either performed, or has always been ready
and willing to perform, the essential terms of the contract incumbent
upon him. It is now a settled law that a party seeking enforcement
of a contract must establish that all conditions precedent have been
satisfied, and that he has either discharged or stood prepared and
willing to discharge his obligations under the contract. The expressions
“ready” and “willing” under Section 16(c) carry distinct connotations.
In JP Builders v. A. Ramadas Rao, reported in (2011) 1 SCC 429,
this Court clarified this distinction, holding that “readiness” relates to
the plaintiff’s capacity to perform the contract, including his financial
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ability to pay the consideration, whereas “willingness” is demonstrated
through the plaintiff’s conduct, evidencing his genuine intent to perform
the contract. The relevant observation is as under:
“22. The words “ready” and “willing” imply that the person
was prepared to carry out the terms of the contract. The
distinction between “readiness” and “willingness” is that
the former refers to financial capacity and the latter to the
conduct of the plaintiff wanting performance. Generally,
readiness is backed by willingness.
23. In N.P. Thirugnanam v. Dr. R. Jagan Mohan Roo at
SCC para 5, this Court held: (SCC pp. 117-18)
5.... Section 16(c) of the Act envisages that the plaintiff
must plead and prove that he had performed or has
always been ready and willing to perform the essential
terms of the contract which are to be performed by
him, other than those terms the performance of which
has been prevented or waived by the defendant. The
continuous readiness and willingness on the part
of the plaintiff is a condition precedent to grant the
relief of specific performance. This circumstance is
material and relevant and is required to be considered
by the court while granting or refusing to grant the
relief. If the plaintiff fails to either aver or prove the
same, he must fail. To adjudge whether the plaintiff is
ready and willing to perform his part of the contract,
the court must take into consideration the conduct
of the plaintiff prior and subsequent to the filing of
the suit along with other attending circumstances.
The amount of consideration which he has to pay
to the defendant must of necessity be proved to be
available. 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. As stated, the factum of his readiness
and willingness to perform his part of the contract is
to be adjudged with reference to the conduct of the
party and the attending circumstances. The court may
infer from the facts and circumstances whether the
[2025] 12 S.C.R. 117

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
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plaintiff was ready and was always ready and willing
to perform his part of the contract.”
(Emphasis Supplied)

83. Further, in the case of Satya Jain v. Anis Ahmed Rushdie, reported
in (2013) 8 SCC 131, this Court had further observed that the test
of readiness and willingness would depend on the overall conduct
of the plaintiff both prior to and subsequent to the filing of the suit
for specific performance and such conduct of the plaintiff has to
be viewed in light of the conduct of the defendant. The relevant
observation is as under:
“36. The principles of law on the basis of which the
readiness and willingness of the plaintiff in a suit for
specific performance is to be judged finds an elaborate
enumeration in a recent decision of this Court in J.P.
Builders v. A. Ramadas Rao [(2011) 1 SCC 429: (2011) 1
SCC (Civ) 227]. In the said decision several earlier cases
i.e. R.C. Chandiok v. Chuni Lal Sabharwal [(1970) 3 SCC
140], N.P. Thirugnanam v. R. Jagan Mohan Rao [(1995)
5 SCC 115] and P. D’Souza v. Shondrilo Naidu [(2004) 6
SCC 649] have been noticed. To sum up, no straitjacket
formula can be laid down and the test of readiness and
willingness of the plaintiff would depend on his overall
conduct i.e. prior and subsequent to the filing of the suit
which has also to be viewed in the light of the conduct of
the defendant. Having considered the matter in the above
perspective we are left with no doubt whatsoever that in
the present case Plaintiff 1 was, at all times, ready and
willing to perform his part of the contract. On the contrary
it is the defendant who had defaulted in the execution of
the sale document. The insistence of the defendant on
further payments by the plaintiff directly to him and not to
the Income Tax Authorities as agreed upon was not at all
justified and no blame can be attributed to the plaintiff for
not complying with the said demand(s) of the defendant.”
(Emphasis Supplied)

84. At the outset, it is significant to note that the Trial Court, upon examining
the peculiar facts of the case and the evidence on record, held that
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the original vendees had established their continuous readiness and
willingness to perform the ATS. Relying on this finding and further
satisfying itself that the subsequent purchasers are not bona fide
purchasers, the High Court decreed the suit for specific performance
in favour of the original vendees. The Trial Court observed that the
original vendees had successfully demonstrated: (i) that the original
vendors had undertaken to execute the sale deed within one month
of completing the subdivision work; (ii) that the original vendors failed
to inform the original vendees about the completion of the subdivision,
thereby preventing execution of the sale deed and payment of the
balance consideration; (iii) that the original vendees had already paid
a total sum of Rs. 8,12,500/-, inclusive of Rs. 2,00,000/- as earnest
money; and (iv) that they had, at all material times, remained ready
and willing to perform their obligations under the contract. The Trial
Court’s finding on this issue is as under:
“[…] Ex. P.35 proves that defendants No.1 to 6 have
admitted the contents of Ex. P.31. I perused Ex. P.31 and
35: Ex. P.35 shown that defendants No. 1 to 6 are unable
to execute the sale deed on the ground that OS No.
30/2001 was pending and prohibitory order was passed.
Further proves that one Mahalaxmi (Godavari was died.
These are only two grounds shown for cancellation of
agreement. In Ex. P.35 does not disclose that plaintiffs
have not paid the amount as per the terms of agreement
and further Ex. P.35 does not disclose that defendants
No. 1 to 6 have intimated to the plaintiffs as per para No.
11 of agreement. In para No. 11 of the agreement shown
defendants No. 1 to 6 agreed to intimate to the plaintiffs
after measurement and fixation of boundaries. The para
No.11 of agreement is very relevant to decide the facts in
issue. So, I am of the opinion that defendants have not
intimated to the plaintiffs as per contents of para No. 11
of Ex. P.31 […]
[…] So I am of the opinion that as peer the contents of Ex.
P.35 there is no refusal on the part of the defendants No. 1
to 6 for execution of sale deed but only shown inability to
execute sale deed on the ground of status quo order. So,
I am of the opinion that plaintiffs successfully to prove that
defendants No. 1, 2, 4, 6 and two others have agreed to
[2025] 12 S.C.R. 119

K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa
Batil, Since Deceased by His Lrs and Other

sell suit land for Rs. 26,95,501/- and paid Rs. 2,00,000/- as
earnest money on 28.4.2000. Further plaintiffs successful
to prove defendants No. 1, 2, 4, 6. and others have agreed
to execute sale deed within 1 month after completion of
work of sub division. The plaintiffs claim that they have
paid amount of Rs. 9,45,000/-. I perused contents of Ex.
P.31, 39 and 47. So documents proves that plaintiffs
have paid sum of Rs. 8, 12,500/-. So plaintiffs failed to
prove that they have paid amount of Rs. 9,45,000/- to the
owners. So, I am of the opinion that plaintiffs successful
to prove that they have paid amount of Rs. 8,12,500/- to
the defendants No. 1, 2, 4, deceased Neelakanthrao and
Godavari and others. So plaintiffs failed to prove that they
have paid amount i of Rs. 9,45,000/- and defendants failed
to rebut the claim of the plaintiffs in respect of issues No.
1 to 3. Further plaintiffs successful to prove that they are
ready ever ready and always ready to perform their part
of contract after disposal of OS No. 30/2001 […]
[…] So, I am of the opinion that defendants: No. 1 to 6 failed
to perform their part of contract and plaintiffs immediately
after disposal of the suit taken steps to perform of their
part of contract and immediately defendants No. 1 to 6
have executed sale deed in favour of the defendants
No. 9 to 16 […]”
(Emphasis Supplied)

85. As per the terms of the ATS, the original vendees had agreed
to purchase the subject land for a total sale consideration of
Rs. 26,95,501/- out of which the they had already paid an amount
of Rs. 2,00,000/- as earnest money to the original vendors. Under
Clause 7 of the ATS, the original vendees were required to pay an
additional amount of Rs. 5,00,000/- to the original vendors at the
time of registration of ATS or within two months from the date of
execution of ATS and the balance amount was to be paid at the
time of registration of the sale deed. It was the case of the original
vendors in their notice of termination that the original vendees did not
come forward to pay the said amount of Rs. 5,00,000/- to the original
vendors nor did the original vendees get the ATS registered. The
original vendees vehemently denied the allegation of non-payment
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of Rs. 5,00,000/- in its reply. In fact, the receipts of payment to the
tune of Rs. 8,12,500/- were placed on record before the Trial Court
and relying on the same the Trial Court reached the conclusion that
payments were made to the original vendors from time to time to
the tune of Rs. 8,12,500/-. No evidence was adduced by the original
vendors to prove that such amount was not paid or was not accepted
by them. In fact, it appears from the record that the original vendees
had assisted the original vendors in the process of conversion of land
and shifting of 19 tenants to one particular place. The averments
made by the original vendees in their impleadment application in
the Original Suit No. 30 of 2001, and the averments before the Trial
Court, the High Court and now before this Court all show that they
were always ready and willing to pay the balance consideration and
execute the sale deed with respect to the subject land. The conduct
of the original vendees, both prior to and subsequent to the filing of
the Original Suit No. 36 of 2007, like payment of substantial sums,
their active assistance to original vendors in completing the necessary
formalities, their categorical refutation of the termination notice, and
their continuous pursuit of legal remedies, all directs towards the
conclusion that they have at all times remained compliant with the
mandate of Section 16(c) of the Act of 1963. The findings of Trial
Court being a finding on facts cannot be said to be perverse.
86. Accordingly, we find no infirmity in the conclusion reached by the Trial
Court, which after a detailed examination of the evidence, rightly held
that the original vendees had performed their part of the contract to
the extent required, and had consistently been ready and willing to
perform their remaining obligations under the ATS.
87. In such circumstances referred to above, we find no good reason to
re-examine the question of limitation at this stage. The Trial Court,
while deciding the issues as framed had specifically considered
whether the suit for specific performance instituted by the original
vendees was barred by limitation and upon a detailed assessment
returned a finding that the suit was well within the prescribed
period. Significantly, when the subsequent purchasers carried the
matter in appeal before the High Court, no ground of challenge was
raised against the said finding. The subsequent purchasers, having
consciously chosen not to assail the finding on limitation, must be
deemed to have acquiesced therein. Once the finding of the Trial
Court on the question of limitation attained finality, re-agitation of the
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same before this Court ought not be entertained. Accordingly, we
hold that the issue of limitation raised by the subsequent purchasers
is untenable and stands concluded against them.
88. In so far as the contention of the subsequent purchasers that since
one of the original vendees i.e., the Respondent No. 14 (defendant
no. 8) neither entered appearance before the Trial Court or appeared
before this Court nor contested the relief of specific performance and
that the ATS being indivisible cannot be enforced in the absence of
all parties seeking enforcement is concerned, we see no force in
the argument in as much as the Respondent No. 14 had released
and relinquished his rights and interest under the ATS in favour of
the remaining original vendees i.e., the Respondent Nos. 15 to 22
(plaintiffs) and the Respondent Nos. 1 to 5 (defendant nos. 7)
respectively by executing an agreement dated 28.12.2002. In view
of such relinquishment, the Respondent No. 14 ceased to have any
subsisting claim or obligation under the ATS. Consequently, the right
to seek enforcement validly vested in the remaining vendees, who
alone pursued the remedy of specific performance.

D. CONCLUSION
89. In view of the foregoing, the appeals fail and are hereby dismissed.
90. The Appellants are hereby directed to execute a sale deed in
respect of the subject land in favour of the Respondent Nos. 15 to
22, respectively & the Respondent Nos. 1 to 5, respectively, and
also hand over vacant and peaceful possession of the subject land
to them within six months from the date of this judgment, subject to
the fulfilment of directions issued by us in paragraphs 91 and 92,
respectively, of this judgment.
91. In the peculiar facts of the present case, we deem it fit to direct
the Respondent Nos. 15 to 22, respectively & the Respondent
Nos. 1 to 5, respectively, to pay the balance sale consideration of
Rs. 18,83,001/- with an interest at the rate of 16% p.a. from the date
of the execution of the ATS, to the Appellants within a period of six
months from the date of this judgment.
92. Further, having regard to the fact that almost 18 years have passed
by since the sale deeds in favour of the Appellants were executed,
and with a view to do substantial justice, we direct the original
vendees, i.e., the Respondent Nos. 15 to 22, respectively & the
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Respondent Nos. 1 to 5, respectively, to pay to the Appellants an
additional amount of Rs. 5,00,00,000/- over and above the balance
sale consideration with interest referred to above within a period of
six months from the date of this judgment.
93. It is only after the balance sale consideration of Rs. 18,83,001/-
with interest at the rate of 16% p.a. from the date of the execution
of the ATS and the additional amount of Rs. 5,00,00,000/- is paid
to the Appellants, that they shall proceed to execute the sale deed
and handover vacant and peaceful possession of the subject land
to the Respondent Nos. 15 to 22, respectively & the Respondent
Nos. 1 to 5, respectively.
94. In the event of any default on either side to comply with our aforesaid
directions or in case of any other difficulty, the parties are at liberty
to move to this Court.
95. The pending applications, if any, shall stand disposed of.

Result of the case: Appeals dismissed.

†
Headnotes prepared by: Divya Pandey