Section 12 of the Specific Relief Act has to be construed in a liberal, purposive manner that is fair and promotes justice

In B. SANTOSHAMMA & ANR. vs D. SARALA & ANR., the Appellant (Vendor) sold a property of 300 yards to the Respondent (Vendee) against which some advance was taken. Meanwhile another person, Pratap Reddy, claimed that a portion of the property of 100 yards has already been sold to him by the Vendor. All claims were backed by some form of agreements. Suits were filed with multiple claims at cross purpose, accusing each other.

The trial court by a common judgment and decree, for specific performance was allowed, in part, holding that the Vendee, was not entitled to seek specific performance of the agreement in respect of 100 sq. yards covered by the sale deed dated 25th May, 1984, but entitled to relief of specific performance in respect of the remaining 200 sq. yards of the suit land. The Vendee’s suit for declaration against Pratap Reddy was dismissed for non-joinder of the Vendor. Both Vendor and the Vendee appealed before the High Court which was dismissed.

In the appeal before the Supreme Court, the Vendor categorically denied that they had delivered possession of 300 sq. yards of land to the Vendee. They have asserted that the Vendee had taken possession of 200 sq. yards of land, 100 sq. yards having been transferred to Pratap Reddy while the Vendee should have been granted specific performance of the agreement dated 21.3.1984 in its entirety. The Court should have set aside the purported sale deed in respect of 100 sq. yards of land in favour of Pratap Reddy and directed the Vendor to sell the entire suit property comprising 300 sq. yards to the Vendee as the Vendee has already paid part of the sale proceed and is always ready to pay the rest.

The SC approving the order of the trial court held that the relief of specific performance of an agreement, was at all material times, equitable, discretionary relief, governed by the provisions of the Specific Relief Act 1963 (S.R.A.). Even though the power of the Court to direct specific performance of an agreement may have been discretionary, such power could not be arbitrary. The discretion had necessarily to be exercised in accordance with sound and reasonable judicial principles.

An agreement to sell immovable property, generally creates a right in personam in favour of the Vendee. The Vendee acquires a legitimate right to enforce specific performance of the agreement. It is well settled that the Court ordinarily enforces a contract in its entirety by passing a decree for its specific performance. However, Section 12 of the Specific Relief Act carves out exceptions, where the Court might direct specific performance of a contract in part.

Where a party to the contract is unable to perform the whole of his part of the contract, the Court may, in the circumstances mentioned in Section 12 of the S.R.A., direct the specific performance of so much of the contract, as can be performed, particularly where the value of the part of the contract left unperformed would be small in proportion to the total value of the contract and admits of compensation.

The Court may, under Section 12 of the S.R.A. direct the party in default to perform specifically, so much of his part of the contract, as he can perform, provided the other party pays or has paid the consideration for the whole of the contract, reduced by the consideration for the part which must be left unperformed. In this case the Vendee had apparently tendered the full consideration within the time stipulated in the Agreement dated 21.3.1984, that is, within 45 days or if not 45, within 47/48 days from the date of its execution.

Section 12 of the SRA is to be construed and interpreted in a purposive and meaningful manner to empower the Court to direct specific performance by the defaulting party, of so much of the contract, as can be performed, in a case like this. To hold otherwise would permit a party to a contract for sale of land, to deliberately frustrate the entire contract by transferring a part of the suit property and creating third party interests over the same.

Section 12 has to be construed in a liberal, purposive manner that is fair and promotes justice. A contractee who frustrates a contract deliberately by his own wrongful acts cannot be permitted to escape scot free.