Supreme Court of India
VIJAY PRABHUversusS.T. LAJAPATHIE & ORS.
- Citation
- 2025 INSC 52
- Decided
- 8 January 2025
- Disposal
- Dismissed
Holding
A plaintiff who is not ready and willing to perform his part of the contract and whose contract does not allow segregation cannot invoke Section 12(3) for specific performance, although relinquishment of claim may be made at any stage of the proceedings.
Summary
The plaintiff filed a suit seeking specific performance of a 2005 sale agreement and delivery of possession of the property, alternatively claiming damages and refund of earnest money. The trial court denied specific performance and ordered refund of the earnest money with interest. On appeal, the High Court held that the plaintiff could not invoke Section 12(3) of the Specific Relief Act because he was not ready and willing to perform his part of the contract and the contract could not be segregated for partial performance. The petitioner argued that the benefit of Section 12(3) could be claimed at the appellate stage and that relinquishment of claims could be made at any stage of litigation. The Supreme Court affirmed that Section 12(3) is discretionary, requires the contract to permit segregation, and that a plaintiff in default cannot invoke it, but also held that relinquishment of claim can be made at any stage, so the High Court’s order was correct. Consequently, the Special Leave Petition was dismissed and the refund of earnest money with interest was ordered.
Issues considered
- Whether the plaintiff was ready and willing to perform his part of the contract and thus entitled to specific performance under Section 12 of the Specific Relief Act.
- Whether Section 12(3) of the Specific Relief Act can be invoked to grant specific performance of part of the contract when the contract does not permit segregation of rights.
- Whether a claim for benefit under Section 12(3) can be raised for the first time at the appellate stage.
- Whether relinquishment of claim to further performance of the remaining part of the contract can be made at any stage of litigation.
Legislation cited
Headnote
Issue for Consideration Whether the High Court was justified in finding that the original plaintiff was not entitled to discretionary relief of specific performance under Section 12 of the Specific Relief Act; whether the relinquishment of claim to further performance of the remaining part of made at any stage of litigation. Headnotes† Specific Relief Act 1963 – s.12 – Specific performance of part of contract – Petitioner/plaintiff instituted a suit seeking specific performance of agreement and delivery of possession of suit property; alternatively, he sought
Subjects
Suit for specific performanceSpecific performance of part of contractSection 12 of Specific Relief ActReady and willingPartial reliefDiscretionary powerRelinquishment of claimBenefit under Section 12(3) of the ActStage of making claim
Judgment
[2025] 1 S.C.R. 718 : 2025 INSC 52
Vijay Prabhu
v.
S.T. Lajapathie & Ors.
(Special Leave Petition (Civil) No. 25246 of 2023)
08 January 2025
[J.B. Pardiwala and R. Mahadevan, JJ.]
Issue for Consideration
Whether the High Court was justified in finding that the original
plaintiff was not entitled to discretionary relief of specific
performance under Section 12 of the Specific Relief Act; whether
the relinquishment of claim to further performance of the remaining
part of the contract can be made at any stage of litigation.
Headnotes†
Specific Relief Act 1963 – s.12 – Specific performance of
part of contract – Petitioner/plaintiff instituted a suit seeking
specific performance of agreement and delivery of possession
of suit property; alternatively, he sought damages – Trial Court
rejected prayer for specific performance – Directed refund of
earnest money to plaintiff – In appeal, High Court held plaintiff
could not claim specific performance under Section 12 – SLP
dismissed – Plaintiff not ready and willing to perform his part
of the contract – Cannot invoke Section 12(3) – Power to grant
partial relief under Section 12(3) discretionary – To be exercised
keeping in mind facts and circumstances of the case:
Held: Petitioner/plaintiff instituted a suit seeking specific performance
of the agreement to sell and for delivery of possession of the suit
property, seeking damages with interest in the alternative – Trial Court
rejected prayer for specific performance and directed refund of earnest
money with interest – High Court held plaintiff could not invoke Section
12(3), Specific Relief Act, to claim specific performance of part of the
agreement – SLP against impugned High Court order dismissed – It
is not open to the High Court to direct specific performance of a part
of contract except otherwise provided in sub-sections (2), (3) and (4)
of Section 12 – Power of the court to grant partial relief, from the very
language of Section 12(3) is discretionary, to be exercised keeping
in view the facts and circumstances of each case and the rights and
interests of the parties involved – Meaning of ‘unable to perform’
[2025] 1 S.C.R. 719
Vijay Prabhu v. S.T. Lajapathie & Ors.
and ‘considerable part’ in Section 12(3) discussed – Section 12(3)
can be invoked only where the terms of contract permit segregation
of rights and interests of parties in the property – In view of the
specific finding recorded by the courts below that the plaintiff was not
ready and willing to perform his part of the contract and the plaintiff
being in default – Plaintiff is not entitled to invoke Section 12(3) –
Amount deposited in Trial Court as refund of earnest money to be
refunded to the petitioner/plaintiff with the accumulated interest.
[Paras 10, 11, 12, 13, 14 and 15]
Claim for grant of benefit under Section 12(3) – Raised for the
first time before High Court in first appeal – Held, relinquishment
of claim to further performance of the remaining part of the
contract and all rights to compensation can be made at any
stage of litigation:
Held: Claim for grant of benefit under Section 12(3) of the Act
rightly not rejected by High Court on the simple ground that it
was not made at the trial stage and had been made for the first
time at the appellate stage – Relinquishment can be made at any
stage of the litigation including the appellate stage – Claim cannot
also be rejected on the short ground that it was not incorporated
in the plaint or was not set forth in writing before the Trial Court.
[Paras 18, 19, 20 and 21]
Case Law Cited
Jaswinder Kaur (Now Deceased) through her Legal Representatives
and Others v. Gurmeet Singh and Others reported [2017] 5 SCR
430 : (2017) 12 SCC 810; Kalyanpur Lime Works v. State of Bihar
reported [1954] 1 SCR 958 : AIR 1954 SC 165; Waryam Singh v.
Gopi Chand, AIR 1930 Lah 34; Ram Niwas v. Smt. Omkari and
Another, AIR 1983 All 310 – relied on.
List of Acts
Specific Relief Act, 1963.
List of Keywords
Suit for specific performance; Specific performance of part of
contract; Section 12 of Specific Relief Act; Ready and willing; Partial
relief; Discretionary power; Relinquishment of claim; Benefit under
Section 12(3) of the Act; Stage of making claim.
720 [2025] 1 S.C.R.
Supreme Court Reports
Case Arising From
EXTRAORDINARY APPELLATE JURISDICTION: Petition for
Special Leave To Appeal (C) No. 25246 of 2023
From the Judgment and Order dated 24.03.2023 of the High Court
of Judicature at Madras in AS No. 211 of 2013
Appearances for Parties
S Nagamuthu, Sr. Adv., Namit Saxena, Advs. for the Petitioner.
Balaji Srinivasan, Ms. Harsha Tripathi, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Order
1. We have heard Mr. S. Nagamuthu, the learned Senior counsel
appearing for the petitioner (original plaintiff) and Mr. Balaji Srinivasan,
the learned counsel appearing for the respondents (original
defendants).
2. This petition arises from the judgment and order passed by the High
Court of Judicature at Madras dated 24.03.2023 in Appeal Suit No.
211 of 2013 by which the High Court dismissed the appeal and
thereby affirmed the judgment and decree passed by the District
Judge of Nilgiris at Udhagamandalam dated 18.02.2010 in Original
Suit No. 45 of 2008. It appears from the materials on record that
the petitioner herein (original plaintiff) instituted Original Suit No.
45 of 2008 seeking specific performance of the agreement dated
07.11.2005 and for delivery of possession of the suit property. In the
alternative, he prayed for Rs. 60,00,000/- with interest at 12 per cent
per annum towards the damages from the date of filing of the suit.
3. The Trial Court rejected the prayer for specific performance and
directed that the amount of Rs. 20,00,000/- paid by the plaintiff to
the defendants towards the earnest money be refunded with interest
at 12 per cent per annum.
4. The Trial Court framed the following issues:
“1. Whether the plaintiff is entitled to the relief of specific
performance of sale agreement dated 07.11.2005 with
modifications as prayed by him?
[2025] 1 S.C.R. 721
Vijay Prabhu v. S.T. Lajapathie & Ors.
2. Whether the plaintiff is entitled to possession of the suit
property described in the plaint schedule excluding the
portion in the possession of the tenants?
3. In the alternative, whether the plaintiff is entitled to
refund of the advance amount of Rs.20,00,000/- and for
damages to a tune of Rs.40,00,000/- from the defendants?
4. Whether the plaintiff is entitled to claim interest at the
rate of 12% p.a. on the above amounts? (end of the 6th
page in original)
5. Whether the plaintiff is entitled to charge over the suit
property for the above amounts as claimed by him?
6. To what other reliefs the plaintiff is entitled?”
5. The Trial Court recorded a finding that the plaintiff was not ready
and willing to perform his part of the contract. Besides, the plaintiff
had failed to plead and prove that he has suffered damages.
6. The High Court while deciding the appeals framed the following
points for its determination:
“(1) Whether the plaintiff was ready and willing to perform
his part of the agreement of sale dated 07.11.2005?
(2) Whether the plaintiff can seek to invoke Sec.12 of the
Specific Relief Act, 1963?
(3) Whether the plaintiff is entitled to the discretionary and
equitable relief of specific performance?
(4) Whether the plaintiff, in the event of not being entitled
to the relief of specific performance, would be alternatively
entitled to the relief of damages and refund of advance to
the tune Rs.40,00,000/- and Rs.20,00,000/- respectively?”
7. The High Court in Para 35 while discussing Section 12 of the Specific
Relief Act (for short, “the Act”) has observed as under:-
“35. Thus, when the plaintiff has chosen to waive only one
of the obligations that remained unfulfilled at the end of
the defendants, it is not open to the plaintiff to seek shelter
U/s.12 and claim specific performance of the part of the
agreement of sale in his favour. Interestingly, it is also
seen that apart from seeking relief of specific performance,
722 [2025] 1 S.C.R.
Supreme Court Reports
the plaintiff has also made a claim for damages besides
refund of advance. Thus, the plaintiff does not qualify
to invoke clause (ii) of Sub-Section (3) to Sec.12, when
admittedly, he has not relinquished “all claims” and when
he approaches the Court seeking damages. This Court
also holds that Sec.12(3) is only a discretionary relief,
which can be granted to the plaintiff, depending on peculiar
facts and circumstances of the case. In the opinion of
this Court, Sec.12(3) cannot be invoked where the terms
of the contract are not capable of being segregated. In
the instant case, we do not find that the agreement of
sale can be compartmentalised in order to grant specific
performance of only a part of the agreement of sale. It
is also seen that A.S.Nos.211 and 355 of 2013 mandate
of Sec.12 is very clear in so far as payment of the whole
of the consideration. Admittedly, in the instant case, the
plaintiff has paid only a sum of Rs.20,00,000/- and a
sum of Rs.64,00,000/- was still outstanding. Unless the
plaintiff’s pay or has paid the sum of Rs.64,00,000/- he
was not even justified in invoking the part performance of
the agreement of sale by resorting to Sec.12 of the Act.”
8. The learned Senior counsel appearing for the petitioner (plaintiff)
reiterated that his client is entitled to the benefit of the provisions
of Section 12(3) of the Specific Relief Act (for short, “the Act”) and
the High Court has not appreciated this aspect of the matter in its
true perspective.
9. Section 12 of the Act:
“12. Specific performance of part of contract.—(1) Except
as otherwise hereinafter provided in this section, the court
shall not direct the specific performance of a part of a
contract.
(2) Where a party to a contract is unable to perform the
whole of his part of it, but the part which must be left
unperformed by only a small proportion to the whole in
value and admits of compensation in money, the court may,
at the suit of either party, direct the specific performance of
so much of the contract as can be performed, and award
compensation in money for the deficiency.
[2025] 1 S.C.R. 723
Vijay Prabhu v. S.T. Lajapathie & Ors.
(3) Where a party to a contract is unable to perform the
whole of his part of it, and the part which must be left
unperformed either—
(a) forms a considerable part of the whole, though
admitting of compensation in money; or
(b) does not admit of compensation in money;
he is not entitled to obtain a decree for specific
performance; but the court may, at the suit of other
party, direct the party in default to perform specifically
so much of his part of the contract as he can perform,
if the other party—
(i) in a case falling under clause (a), pays or
has paid the agreed consideration for the whole
of the contract reduced by the consideration for
the part which must be left unperformed and in
a case falling under clause (b), pays or has paid
the consideration for the whole of the contract
without any abatement; and
(ii) in either case, relinquishes all claims to the
performance of the remaining part of the contract
and all right to compensation, either for the
deficiency or for the loss or damage sustained
by him through the default of the defendant.
(4) When a part of a contract which, taken by itself, can
and ought to be specifically performed, stands on a
separate and independent footing from another part of the
same contract which cannot or ought not to be specifically
performed, the court may direct specific performance of
the former part.
Explanation.—For the purposes of this section, a party
to a contract shall be deemed to be unable to perform
the whole of his part of it if a portion of its subject-matter
existing at the date of the contract has ceased to exist at
the time of its performance.”
10. A bare perusal of the aforesaid provision contained in Section 12 of
the Act makes it clear that it is not open to the High Court to direct
724 [2025] 1 S.C.R.
Supreme Court Reports
specific performance of a part of contract except otherwise provided
in the section in absence of any of the exigencies available under
the provisions of sub-sections (2), (3) and (4) of Section 12 so as
to decree the suit.
11. The words ‘unable to perform’ suggest that the sub-section is
applicable only when the party cannot for any reason perform the
whole of what he has promised. The inability may arise by any
cause whatsoever including any statutory limitations. The inability
to perform may arise by—
(i) deficiency in quantity of the subject-matter, or
(ii) variance in quality, or
(iii) defect in title; or
(iv) some legal prohibition; or
(v) other causes.
12. The expression ‘considerable part’ implies that the part which will
be left unperformed is either large as regards quantity or as regards
quality. In other words, it is material and not insignificant, so that
a reasonable objection can be taken by the promisee to accept
performance. The phrase ‘does not admit of compensation’ implies
that there is no data for ascertaining a fair and reasonable amount
as the money value of the difference between what can be performed
and the express subject-matter of the contract. The amount need not
be mathematically accurate. If a reasonable estimate of the amount
as the money value can be made, it will not be a case where the
compensation is unascertainable.
13. The power to grant partial relief, from the very language of Section 12(3)
of the Act is discretionary with the court to be exercised keeping in
view the facts and circumstances of each case and the rights and
interests of the parties involved. Section 12(3) of the Act can be
invoked only where the terms of contract permit segregation of rights
and interests of parties in the property.
14. In view of the specific finding recorded by the courts below that the
plaintiff was not ready and willing to perform his part of the contract
and the plaintiff being in default he could not be said to be entitled
to invoke Section 12(3) of the Act also.
[2025] 1 S.C.R. 725
Vijay Prabhu v. S.T. Lajapathie & Ors.
15. In the aforesaid context, we may refer to a decision of this Court in
Jaswinder Kaur (Now Deceased) through her Legal Representatives
and Others v. Gurmeet Singh and Others reported in (2017) 12 SCC
810, wherein this Court observed in paras 19, 20 and 21 respectively
as under:
“19. In Abdul Haq v. Mohd. Yehia Khan reported in AIR
1924 Pat 81, the Court observed that the Court will not as
a general rule compel specific performance of a contract
unless it can execute the whole contract. It is not a case
where the entire contract is not capable of performance.
Section 12 encompasses provisions in respect of a claim
for specific performance of part of a contract. Sections
14 and 17 of the old Act have been amalgamated with
modifications and the explanation based on Section 13
of the repealed Act together, the law is stated with clarity
under Section 12 of the Act.
20. Section 12(1) of the Act provides that specific
performance can be granted on part of a contract only
in the circumstances mentioned in the section. Section
12(2) of the Act deals with breach the contract if a party
is unable to perform the whole of its part and such
part bears a small proportion to the whole in value and
admits compensation in money. The expression “unable
to perform” in Section 12(2) of the Act for instance would
mean that a part of the property destroyed after contract
or act of God or an act by which it would cease to exist.
In such a case party to a contract shall be deemed to be
unable to perform the whole or its part of the contract.
Such a person would come within the words “party in
default”. The inability to perform may arise by deficiency
in quantity of subject-matter or deficiencies or some legal
prohibition or such other causes. None of such causes is
present in the instant case.
21. Section 12 of the Act does not apply where the inability
to perform specific performance on part of contract arises
because of the plaintiff’s own conduct as held in Abdul
Rahim v. Maidhar Gazi reported in AIR 1928 Cal 584. In
Graham v. Krishna Chunder Dey reported in AIR 1925 PC
726 [2025] 1 S.C.R.
Supreme Court Reports
45, it has been laid down that the Explanation in the section
exhaust all the circumstances in which part-performance
can be granted. Section 12(2) of the Act deals with the
situation where a party is unable to perform and such
part is only a small proportion in value and capable of
compensation in form of money. It was not a case covered
in Section 12(2) of the Act at all. Under Section 12(3) of
the Act party in default is entitled to specific performance
on payment of whole consideration or for the part left
unperformed but here in the instant case the plaintiff being
in default could not be said to be entitled to invoke Section
12(3) of the Act also.”
16. There is one another issue, we must look into and clarify. In para
29, the High Court has observed as under:
“29. Learned Senior counsel for the plaintiff relied on
Sec.12 of the Act and vehemently contended that the
plaintiff would be entitled to a decree when the plaintiff
was willing to relinquish his claims to the performance by
the defendants, of the remaining part of the agreement of
sale. This Court at the very outset notices that such a plea
was never raised before the Trial Court and no grounds
have also been raised in the memorandum of First Appeal
in this regard. However, this Court is inclined to deal with
the elaborate submissions made by the learned Senior
counsel for the plaintiff touching Sec.12 of the Act.”
(Emphasis supplied)
17. Thus, the High Court expressed doubt whether the plea as regards
Section 12 of the Act if not raised before the Trial Court could have
been raised for the first time before the High Court in first appeal.
18. In the aforesaid context, we may only say that the relinquishment
of claim to further performance of the remaining part of the contract
and all rights to compensation can be made at any stage of litigation.
This was held in Kalyanpur Lime Works v. State of Bihar reported
in AIR 1954 SC 165. This Court referred with approval to a Division
Bench decision of the Lahore High Court in Waryam Singh v. Gopi
Chand, (AIR 1930 Lah 34).
[2025] 1 S.C.R. 727
Vijay Prabhu v. S.T. Lajapathie & Ors.
19. In the case of Kalyanpur Lime Works (supra) the plaintiff had sued the
State of Bihar for specific performance of a contract for lease. It was
found that an earlier lease in favour of another company was in force
and could not be forfeited and, therefore, the Government was not in
a position to grant lease of the property to the Lime company. The
Lime Company made an application at the appellate stage claiming
benefit of the provisions of old Section 15 and prayed for grant of
lease for a period of five years which remained after the expiry of
the period of lease of the other company. This Court observed:
“Relinquishment of the claim to further performance can
be made at any stage of the litigation.”
Thus, Waryam Singh’s case was referred to with approval. However,
the benefit of old Section 15 was not allowed on other considerations.
20. In Waryam Singh’s case the defendant Nos. 1 and 2 respectively
had agreed to sell 200 Kanals of specified land, but later on it was
found that they were owners of only two-third of that land. In the
Trial Court the plaintiff insisted on specific performance of the whole
contract and prayed that the defendants be asked to make good the
deficiency from the other land belonging to them. At the time of the
arguments the plaintiff had moved an application claiming benefit
of the old Section 15 in case it was held that the defendants were
incompetent to sell the whole of the land. The Division Bench held:
“It is open to the plaintiff to relinquish his claim to any
part of the property in suit on the conditions specified in
Section 15 at any time before the suit is finally decided
by the Court of appeal.”
21. Thus, the position of law is that relinquishment could be made at any
stage of the litigation including the appellate stage. The claim of the
plaintiff appellant for grant of benefit under Section 12(3) of the Act
was, therefore, rightly not rejected by the High Court on the simple
ground that it was not made at the trial stage and had been made
for the first time at the appellate stage. In our view the claim can
also not be rejected on the short ground that it was not incorporated
in the plaint or was not set forth in writing before the Trial Court.
[See: Ram Niwas v. Smt. Omkari and another : AIR 1983 All 310]
22. We are of the view that no error not to speak of any error of law
could be said to have been committed by the High Court in passing
the impugned order.
728 [2025] 1 S.C.R.
Supreme Court Reports
23. In such circumstances, referred to above, the Special Leave Petition
fails and is hereby dismissed.
24. The amount of Rs.20,00,000/- which came to be deposited by the
defendants in the Trial Court in the form of refund of the earnest
money to the original plaintiff must have been invested by the Court
concerned with any bank by way of fixed deposit receipt, the said
amount shall be refunded to the petitioner – herein (original plaintiff)
within a period of four weeks from today with the accumulated interest
as awarded by the Court below.
25. Pending applications, if any, also stand disposed of.
Result of the case: SLP dismissed.
†
Headnotes prepared by: Adeeba Mujahid, Hony. Associate Editor
(Verified by: Shibani Ghosh, Adv.)
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