Summary
The Supreme Court dismissed the plaintiff-purchaser's SLP against concurrent refusal of specific performance. A plaintiff found not ready and willing, and himself in default, cannot invoke Section 12(3) of the Specific Relief Act to obtain part performance, which is discretionary and available only where the contract permits segregation; the Court clarified, however, that relinquishment under Section 12(3) may be made at any stage, including in appeal.
Issues
- Whether the plaintiff, found not ready and willing to perform, could obtain specific performance of part of the agreement of sale under Section 12(3) of the Specific Relief Act, 1963.
- Whether relinquishment of the remaining part of the contract and of compensation under Section 12(3) can be offered for the first time at the appellate stage.
Provisions considered
- Section 12, Specific Relief Act, 1963Read sub-section (1) as barring specific performance of part of a contract save in the situations in sub-sections (2) to (4); explained 'unable to perform', 'considerable part' and 'does not admit of compensation'; held relief under sub-section (3) discretionary, available only where the contract permits segregation, and not available to a plaintiff in default. (¶¶ 9, 10, 11, 12, 13, 14, 15)
- Section 12(3)(ii), Specific Relief Act, 1963Held that relinquishment of claims to performance of the remaining part and to compensation can be made at any stage of the litigation, including the appellate stage, and need not have been pleaded in the plaint or raised before the trial court. (¶¶ 16, 17, 18, 19, 20, 21)
Held
- Section 12(1) bars a court from directing specific performance of part of a contract unless the case falls within sub-sections (2), (3) or (4). 'Unable to perform' covers inability from any cause, such as deficiency in quantity, variance in quality, defect in title or legal prohibition. (¶¶ 10, 11)
- A 'considerable part' is one that is material, not insignificant, so that the promisee may reasonably object; a part 'does not admit of compensation' where there is no data to make even a reasonable estimate of its money value, mathematical accuracy not being required. (¶ 12)
- The power to grant partial relief under Section 12(3) is discretionary, to be exercised on the facts and the rights of the parties, and can be invoked only where the terms of the contract permit segregation of the parties' rights and interests in the property. (¶ 13)
- Given the concurrent finding that the plaintiff was not ready and willing to perform and was in default, he could not invoke Section 12(3). (¶¶ 14, 15)
- Relinquishment of the claim to further performance and to compensation can be made at any stage of litigation, including in appeal; a Section 12(3) claim cannot be rejected merely because it was first raised at the appellate stage or was not pleaded in the plaint. (¶¶ 18, 19, 20, 21)
Result
Special leave petition dismissed; the Rs. 20,00,000 earnest money deposited by the defendants in the trial court, with accumulated interest as awarded, directed to be refunded to the petitioner within four weeks; pending applications disposed of.