Ready‑and‑willing requirement bars part‑performance relief under Section 12 of Specific Relief Act

A bench of Justices J.B. Pardiwala and R. Mahadevan heard a Special Leave Petition challenging the Madras High Court's dismissal of an appeal that affirmed a trial court decree in a suit for specific performance and refund of earnest money. The appeal raised the question whether the plaintiff could invoke Section 12(3) of the Specific Relief Act for part performance when he had not paid the balance consideration and was found not to be ready and willing to perform his part of the contract.

The Supreme Court held that the courts below did not err in refusing specific performance of part of the contract. The Court summarized that Section 12 placed limits on directing specific performance of a part of a contract and that the power to grant partial relief was discretionary and contingent upon the terms of the contract and the conduct of the parties. The Court, in its reasoning, observed: “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.” The Court reiterated that a plaintiff who was found “not ready and willing to perform his part of the contract” could not invoke Section 12(3), and that Section 12 required either payment of the agreed consideration or relinquishment of all claims and rights to compensation before part performance could be ordered.

Background

The petitioner (original plaintiff) instituted Original Suit No.45 of 2008 seeking specific performance of a sale agreement dated 07.11.2005 and for delivery of possession; in the alternative he claimed Rs.60,00,000 with 12% interest as damages and sought refund of the earnest money of Rs.20,00,000. The trial court rejected the claim for specific performance, recorded that the plaintiff was not ready and willing to perform his obligations, found that he had not proved damages, and directed refund of Rs.20,00,000 with 12% interest. The Madras High Court (judgment dated 24.03.2023) dismissed the appeal and held that the plaintiff could not invoke Section 12(3) because he had not paid the balance consideration (Rs.64,00,000 remained outstanding) and had not relinquished “all claims” while still seeking damages; the High Court observed that “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.”

On SLP, the Supreme Court reviewed the scope of Section 12, noting subsections (2)–(4) and explaining terms such as “unable to perform” and “considerable part.” The Court relied on precedents including Jaswinder Kaur v. Gurmeet Singh (2017) 12 SCC 810 and earlier authorities to reiterate that Section 12(3) is discretionary and applicable only where the contract permits segregation of rights or where conditions of payment and relinquishment are met. The Court also clarified that relinquishment of claims may be made at any stage of litigation, citing Kalyanpur Lime Works v. State of Bihar and observing that “Relinquishment of the claim to further performance can be made at any stage of the litigation.” However, given the findings below that the plaintiff was in default and not ready and willing, the Court found no error in the concurrent conclusions and dismissed the Special Leave Petition.

The Special Leave Petition (SLP) was dismissed. The Court directed that the sum of Rs.20,00,000, deposited by the defendants in the trial court, be refunded to the petitioner within four weeks with accumulated interest as awarded below. Pending applications stood disposed of.

Case Details: Case No.: Petition for Special Leave to Appeal (C) No.25246/2023 (2025 INSC 52) Case Title: VIJAY PRABHU v. S.T. LAJAPATHIE & ORS. Appearances: For the Petitioner(s): Mr. S. Nagamuthu, Senior Counsel For the Respondent(s): Mr. Balaji Srinivasan, Counsel