Sec.12(3) Specific Relief Act | Relinquishment Can Be Made At Appellate Stage Also: SC
The Supreme Court clarified that the 'relinquishment' under Section 12(3) of Specific Relief Act can be made at any stage of the litigation including the Appellate stage.
The Court further explained 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 Division Bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan asserted, “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 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.”
The Petition before the Apex Court was filed challenging the judgment of the Madras High Court dismissing the appeal and affirming the order passed in an Original Suit seeking specific performance of an agreement and delivery of possession of suit property.
The Trial Court, in this case, had 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. The Trial Court had also 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 had suffered damages.
The Counsel for the appellant-plaintiff argued that his client is entitled to the benefit of the provisions of Section 12(3) of the Specific Relief Act and the High Court has not appreciated this aspect of the matter in its true perspective.
Referring to section 12, the Bench said, “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 Bench noticed that 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 the first appeal. On this aspect, the Apex Court said, “...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.”
Further, placing reliance upon the judgment in Ram Niwas v. Smt. Omkari and another (1983), the Bench held, “...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 get forth in writing before the Trial Court.”
Finding no error in the impugned order of the High Court, the Bench dismissed the Appeal and ordered that 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 be refunded to the petitioner – herein (original plaintiff) within 4 weeks.
Cause Title: Vijay Prabhu v. S.t. Lajapathie & Ors. (Neutral Citation: 2025 INSC 52)
