Respondent Supporting Decree Need Not File Cross-Objections To Assail Adverse Finding If No Additional Relief Is Sought: Supreme Court

The Court was hearing appeals against a Madras High Court judgment which had reversed the Trial Court’s refusal of specific performance and decreed the suit in favour of the purchasers. The Trial Court had granted a refund of the advance amount with interest and charge over the suit property, but declined specific performance on equitable grounds.

A Bench of Justice Prashant Kumar Mishra and Justice N.V. Anjaria affirmed the High Court’s view on the limited procedural point under Order XLI Rule 22 CPC, while disagreeing with its ultimate decree for specific performance.

The Bench held: “At the outset, we affirm the High Court’s view, based on S. Nazeer Ahmed (supra), that a respondent supporting a decree may impugn a finding adverse to him without filing cross-objections under Order XLI Rule 22 CPC, provided he seeks no relief beyond what the decree already grants him. As Defendant No. 1 only to sustain the Trial Court’s refusal of specific performance, he was entitled to assail the readiness and willingness finding in favour of the Plaintiffs without filing cross-objections.”

Advocate Harish Pandey appeared for the appellant, while Advocate Aravindh S. appeared for the respondents.

Background

The dispute arose from an agreement to sell a property at Udhagamandalam. The vendor agreed to sell the property for a recorded consideration of ₹2.25 crore, though he claimed that the true agreement between the parties was for ₹2 crore and that the higher figure had been recorded at the request of the purchaser’s husband to facilitate raising funds.

On the same day, the vendor also executed a General Power of Attorney in favour of the purchaser’s husband, authorising him to deal with the property, execute sale documents, receive sale consideration, deliver possession, and take steps relating to occupants.

The agreement provided that the sale would be completed within 60 days from the date of setting aside an ex parte preliminary decree in a pending partition suit. After that decree was set aside, disputes arose over payment of balance consideration, receipt of advance amount, revocation of the Power of Attorney, and a subsequent agreement entered into with a third party.

The purchasers filed a suit for specific performance or, in the alternative, recovery of ₹2 crore with interest. The Trial Court found that ₹85 lakh had been paid as an advance and granted a refund with 15% interest, creating a charge over the property under Section 55(6)(b) of the Transfer of Property Act, 1882. However, it refused specific performance, holding that the plaintiffs had not approached the Court with clean hands.

The High Court reversed that refusal and decreed specific performance, leading to the appeals before the Supreme Court.

Court’s Observations

The Supreme Court first addressed whether the vendor, while defending the Trial Court’s decree refusing specific performance, could attack the finding on readiness and willingness despite not having filed cross-objections.

Relying on S. Nazeer Ahmed v. State Bank of Mysore (2007), the Court held that he could do so because he was not seeking a new or additional relief, but only supporting the decree already passed in his favour on the refusal of specific performance.

The Court therefore accepted the procedural position taken by the High Court on Order XLI Rule 22 CPC, but proceeded to examine whether the High Court was right in decreeing specific performance.

The vendor also argued that the suit was not maintainable because the purchasers had not sought a declaration that termination of the agreement was invalid. The Supreme Court rejected this contention on the facts of the case.

Referring to Annamalai v. Vasanthi (2025), the Court explained that declaratory relief may be necessary where a contract confers a right of termination and the plaintiff’s consequential relief depends on removing a cloud over the contract. But where unilateral termination is merely repudiation, the aggrieved party may treat the contract as subsisting and sue for specific performance.

The Court observed: “As the Agreement to Sell did not confer upon Defendant No. 1 any contractual right to unilaterally terminate, it is a case of repudiation squarely covered by this decision. Plaintiffs were entitled to treat the termination as ineffective and sue for specific performance without seeking declaratory relief. In any event, the Trial Court had expressly framed and adjudicated Issue (iv) concerning the validity and effect of the purported termination. The question having been tried and decided, no objection as to the maintainability of the suit survives.”

On merits, the Supreme Court found fault with the High Court’s conclusion that the purchasers had proved readiness and willingness. It said the burden could not be shifted merely because the vendor had allegedly not pleaded lack of funds in a particular form.

The Court noted: “The High Court’s reasoning that the appellant did not aver in his written statement about the plaintiffs’ lack of readiness and willingness would not prove the Plaintiffs’ case on this aspect. Moreover, the appellant/defendant had stated during the examination that Plaintiff No.1 did not meet the demand raised for the funds to purchase and was not at all ready and willing to pay the balance. In our considered view, this statement of the appellant/defendant would amount to challenging the plaintiffs’ readiness and willingness.”

The Court also disagreed with the High Court’s reliance on a demand draft produced at the close of appellate hearing.

The Bench held: “The High Court has culled out plaintiffs’ readiness and willingness basing a demand draft dated 14.06.2011 for ₹1,40,00,000 produced at the close of hearing. However, in the suit for specific performance, the plaintiffs had to show their means i.e., availability of funds and readiness and willingness continuously at all material points of time i.e., soon after the agreement till the execution of the decree.”

The Court found that the purchasers had not shown availability of funds at the time of filing the suit, and that earlier cheques had been dishonoured for insufficient funds.

The Court relied on N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao (1995), Nanjappan v. Ramasamy (2015), Kamal Kumar v. Premlata Joshi (2019), Major Gen. Darshan Singh v. Brij Bhushan Chaudhary (2024), and Muddam Raju Yadav v. B. Raja Shanker (2026) to reiterate that specific performance under the unamended Specific Relief Act, 1963 was discretionary and equitable.

The Bench referred to the principle that a plaintiff must prove continuous readiness and willingness from the date of execution till the decree, and that the conduct of the parties remains central to the grant or refusal of specific performance.

The Court quoted N.P. Thirugnanam (1995): “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.”

The Supreme Court also found that the purchasers’ conduct disentitled them from equitable relief. It disagreed with the High Court’s view that a criminal complaint filed by the purchaser’s husband was merely a counterblast and did not affect the claim for specific performance.

The Court observed: “Against this backdrop, we are not able to appreciate the High Court’s characterization of Plaintiff No. 2’s complaint as a benign ‘counterblast’ that would not militate against relief of specific performance. No doubt Defendant No. 1 had preferred his complaint at Madurai despite himself stating therein that Plaintiffs and their associates had allegedly come to the suit property at Ooty armed with deadly weapons, committed robbery, and threatened him. However, even a retaliatory motive cannot justify Plaintiff No. 2 lodging his own FIR in which he explicitly requested the Police trace Defendant No. 1 and recover the sum of ₹85,00,000 from him, and also that the amount was obtained by Defendant No. 1 fraudulently suppressing the interim injunction in the partition suit, despite there being an express reference to the same in Clause 7 of the Agreement to Sell. The complaint itself being a ‘counterblast’ is no excuse in law; in fact, Courts generally censure these kind of retributive criminal proceedings.”

The Bench said the purchasers had taken inconsistent stands about whether the rights under the agreement had been assigned to a third party.

It noted: “What is material here is that the Plaintiffs adopted two contradictory positions which are impossible to reconcile.”

The Court further held that the purchaser’s wife could not distance herself from her husband’s conduct, since the agreement, Power of Attorney and undertaking showed that he was central to the transaction.

The Court also considered the lapse of more than two decades since the agreement. It noted that the vendor was of highly advanced age and the purchaser’s husband had passed away.

The Court held: “Moreover, we cannot ignore the fact that over two decades have passed since the Agreement to Sell was concluded. In decisions like Mrs. Saradamani Kandappan vs. Mrs. S. Rajalakshmi & Ors. and Nanjappan (supra), this Court has held such long lapse of time militates against granting the relief of specific performance. Defendant No. 1 is today a man of highly advanced age and Plaintiff No. 2 has passed away. To compel the transfer of immovable property under these circumstances would not, in our opinion, be equitable.”

Conclusion

The Supreme Court allowed the appeals, set aside the High Court’s decree for specific performance and restored the Trial Court’s decree granting refund with interest and charge over the suit property. It also permitted the plaintiffs to withdraw ₹1.40 crore deposited in a nationalised bank along with accrued interest.

Cause Title: V.N.A.S. Chandran v. S. Venilla and Others (Neutral Citation: 2026 INSC 776)

Appearances

Appellant: Harish Pandey, AOR, with Advocates Meenesh Kumar Dubey, Anshuman Tiwari, Nishank Tripathi and Apoorva Pal

Respondent: Aravindh S., AOR, with Advocates Akshay Gupta, Ekta Muyal, R. Ayyam Perumal, AOR, Archana Sharma, Rao Raj Bahadur Singh, M.G. Aravind Raj, Jayaraman S, A. Sai Kumar, Garika Sook, P. Ashok, Agrim Jain and P.V. Yogeswaran, AOR

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