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Vijay Prabhu v. S.T. Lajapathie & Ors.

Not available · 2025 INSC 52Decided 8 Jan 2025
Petition for Special Leave to Appeal (C) No. 25246/2023
Justice J.B. Pardiwala · Justice R. Mahadevan

Background

The petitioner (original plaintiff) had sued for specific performance of a 2005 agreement to sell, or alternatively for Rs. 60 lakh in damages, after paying Rs. 20 lakh in earnest money towards a total consideration of Rs. 84 lakh. Both the trial court and the Madras High Court found that the plaintiff was not "ready and willing" to perform his part of the contract and had failed to pay the outstanding Rs. 64 lakh, and refused specific performance, ordering only a refund of the earnest money with interest.

Decision Breakdown

The Supreme Court examined Section 12 of the Specific Relief Act, which allows a court to order specific performance of only part of a contract in limited circumstances (e.g., where the unperformed part is a small proportion of the whole, or the buyer relinquishes claims to the rest). It held these exceptions apply only when a party is genuinely "unable" to perform (due to loss of subject matter, legal prohibition, etc.), not when the plaintiff simply defaulted by choice, and having been found in default and not "ready and willing," the petitioner could not invoke Section 12(3) at all. The Court clarified that a plaintiff can validly relinquish claims to the remaining part of a contract at any stage of litigation, including on appeal, but this procedural point did not help the petitioner here since he remained a defaulting party. The Special Leave Petition was accordingly dismissed, though the Court ordered the already-deposited Rs. 20 lakh (with accrued interest) be refunded to the petitioner within four weeks.

Lesson Learnt

A buyer who defaults on the bulk of the agreed sale price cannot fall back on the "partial performance" provisions of the Specific Relief Act to salvage part of the deal: those provisions are meant for genuine inability to perform, not for a party who was simply not ready and willing to pay.

Official source (sci.gov.in)View Judgment (PDF)

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