2026 INSC 776 CA Nos.7825-7828 of 2013 Page 1 of 25

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 7825 -7828 OF 2013

V.N.A.S. CHANDRAN …APPELLANT (S)

VERSUS

S. VENILA AND OTHERS ...RESPONDENT(S)

J U D G M E N T

PRASHANT KUMAR MISHRA, J.

1. The instant Appeals are directed against the final judgment and order

dated 11.10.2011 passed by the Division Bench of the High Court of Judicature

at Madras in AS No. 443 of 2008, together with MP No.1 of 2010 and MP Nos.1

and 2 of 2008. By way of the impugned judgment, the High Court allowed the

appeal and set aside the judgment and decree dated 22.11.2007 passed by the

District Judge, Nilgiris, Udhagamandalam in OS No. 11 of 2006 insofar the Trial

Court had refused specific performance, and thus decreed the suit for specific

performance as prayed for.

Factual Background

2. The relevant facts leading to these Appeals are briefly set out below.

The sole appellant herein, Shri V.N.A.S. Chandran (originally “Defendant No.

1”) is the owner of land and building comprised in Survey Nos. 4045 and 4047,

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bearing Door No. 6, Church Hill Road, Udhagamandalam, Nilgiris District,

admeasuring 1 acre and 33 cents

1

. Defendant No. 1 had purchased a larger

parcel of land admeasuring 1 acre and 62 cents from M/s. Spencer & Company

Limited vide a registered sale deed dated 09.06.1994, but subsequently sold a

portion of 0.29 cents on 06.07.1994 to M/s. Ramasubbu and others, leaving him

with the suit property.

3. Respondent no. 1, Mrs. S. Venilla (“Plaintiff No. 1”) is a resident of Halls

Road, Killpauk, Chennai and the wife of respondent no. 2, Shri V. Sowrirajan

(“Plaintiff No. 2”), who was a contractor by occupation and held certain

immovable properties at Chennai. As Plaintiff No. 2 passed away during the

pendency of these Appeals before this Court, he was substituted by his legal

representatives, namely Plaintiffs’ daughter R. Srividha and their son S.

Venkatraj, who were brought on record by an order of this Court dated

07.04.2021.

4. Respondents nos. 3, 4 and 5 are the children of Defendant No. 1, namely,

C. Subashini, C. Sreedharan and C. Gajalakashmi (“Defendants Nos. 2, 3 & 4”,

respectively). Lastly, the respondent no.6 is one Shri R.P. Rajan, a resident of

Chennai (“Defendant No. 5”), whose connection with the suit property is set out

hereinafter.

5. The genesis of this case is the “Agreement to Sell” entered into by Plaintiff

No. 1 and Defendant No. 1 on 01.04.2004. By way of the Agreement to Sell,

1

Hereinafter referred to as ‘the suit property’

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Defendant No. 1 agreed to sell the suit property to Plaintiff No. 1 for a total sale

consideration of ₹2,25,00,000/-. On this point, Defendant No. 1 asserts that the

parties had agreed upon a sale consideration of ₹2,00,00,000/- (the alleged true

value of the property), even though the agreement recorded the consideration as

₹2,25,00,000, as Plaintiff No. 2 had specifically requested the same to facilitate

him to raise funds in order to purchase the suit property. The additional amount

was also intended to represent Plaintiff No. 2’s commission. The Plaintiffs dispute

this and maintain that the agreement correctly reflected the agreed -upon

consideration. Similarly, it is the case of Plaintiffs that the total advance

ultimately paid to Defendant No. 1 was ₹85,00,000/-, while Defendant No. 1

disputes the same and claims that he received only ₹60,00,000/- in total.

6. On 01.04.2004, Defendant No. 1 also executed a General Power of Attorney

in favour of Plaintiff No. 2, authorising him, inter alia, to sell the suit property;

to execute agreements of sale and sale deeds in respect thereof; to receive sale

consideration; to deliver vacant physical possession of the suit property to the

purchaser; and to evict occupants, tenants and inhabitants, whether through

the Court, the Police, or by way of compromise, and to pay compensation if

necessary for the purpose of settling disputes with them.

7. Also on 01.04.2004, Plaintiff No. 2 issued an undertaking letter to

Defendant No. 1, wherein Plaintiff No. 2 undertook to pay all sale consideration

received by him, whether by way of advance or full consideration, to Defendant

No. 1, until the balance sale consideration of ₹1,50,00,000/- payable by Plaintiff

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No. 1 was discharged. The said undertaking letter stated that it formed part and

parcel of the Agreement to Sell and the Power of Attorney, and that it was

irrevocable.

8. Earlier, Defendant No. 2 had filed OS No. 403 of 2003 before the First

Additional Subordinate Court, Coimbatore (later transferred and renumbered as

OS No. 182 of 2005 before the District Court, Coimbatore) seeking partition and

separate possession of the suit property and certain other properties against her

father Defendant No. 1 and siblings Defendant Nos. 3 & 4. Defendant No. 1’s

position therein was that the suit property was his self-acquired property and

had been vexatiously included in the partition suit.

9. In that suit, an ex-parte preliminary decree came to be passed on

26.06.2003. Defendant No. 1 filed IA No. 117 of 2005 in OS No. 403 of 2003

seeking to set aside the said decree under Order IX Rule 13 of the Civil Procedure

Code, 1908

2

. The same was allowed on 06.04.2005. This is highly pertinent as

Clause 7 of the Agreement to Sell stipulated:

“7. The sale shall be completed within 60 days from the date of passing

orders of the set aside the ex-parte order of the preliminary decree in

the partition suit O.S. No. 403/03 referred above.”

Further, by Clause 13, time was expressly stipulated to be the essence of the

Agreement.

2

Hereinafter, ‘CPC’

CA Nos.7825-7828 of 2013 Page 5 of 25

10. In terms of Clause 6 of the Agreement to Sell, towards part-payment of the

sale consideration, Plaintiff No. 2 issued three cheques of ₹25,00,000/-, drawn

on the State Bank of India, Kilpauk Branch, Chennai dated 01.04.2004,

07.04.2004 and 16.04.2004, bearing nos.715942, 715943 and 715944,

respectively.

11. The first of these cheques, dated 01.04.2004, was presented and

dishonoured by the bank for want of sufficient funds on 07.04.2004. Plaintiff No.

2 asserts that this is because said cheque was deposited for clearance on

06.04.2004 even though he had reques ted Defendant No. 1 to withhold

presentation until 09.04.2004.

12. After dishonour of the cheque dated 01.04.2004, Defendant No. 1 on

10.04.2004 issued a letter acknowledging receipt of ₹25,00,000 in two

instalments of ₹15,00,000 and ₹10,00,000 in lieu of the dishonoured cheque no.

715942, and also returned the cheque to Plaintiff No. 2. Said letter also

confirmed the balance sale consideration receivable as ₹2,00,00,000. The

remaining two cheques of ₹25,00,000 each, dated 07.04.2004 and 16.04.2004,

were duly honoured upon presentation.

13. Plaintiff No. 1 thereafter issued two further cheques of ₹5,00,000 each

towards the sale consideration. One of these, cheque No. 740501 dated

20.05.2004, was honoured , while the other, cheque No. 740502 dated

24.05.2004, was dishonoured. In respect of the latter, Plaintiff No. 2 paid

₹2,00,000 and ₹3,00,000 in cash on 12.01.2005 and 13.01.2005 respectively,

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which was acknowledged by Defendant No. 1 vide letter dated 13.01.2005. This

letter recorded the balance amount receivable on account of the sale of the suit

property as ₹1,40,00,000.

14. On 16.04.2004, Plaintiff No. 2, under the Power of Attorney, entered into

a fresh agreement with Defendant No. 5 for sale of the suit property for

consideration of ₹1,50,00,000 (“sub-agreement”), and received an advance of

₹10,00,000 thereunder from Defendant No. 5. Defendant No. 5 subsequently

filed OS No. 75 of 2005 before the Sub -Court, Udhagamandalam, against

Defendant No. 1 and Plaintiff No. 2, seeking a bare injunction in respect of his

rights under the sub-agreement.

15. Allegedly, under the Power of Attorney, Plaintiff No. 2 also took steps to

vacate the tenants in occupation of the suit property. Between 07.02.2005 and

09.03.2005, six occupants (B. Nanjundan, P. Rajagopal, Saravanan, A.

Christopher, Amanullah and Rasheed ) were vacated upon payment of

compensation aggregating ₹5,00,000. However, two remaining tenants (Krishna

Devi and the Provident Fund Department) continued to occupy the suit property

and were never vacated in favour of either, the Plaintiff No. 2 or the Defendant

No. 1.

16. By letter dated 04.05.2005 addressed to Plaintiff No. 1, Defendant No. 1

stated that the ex-parte preliminary decree had been set aside and that a copy of

the order had been faxed to Plaintiff No. 2 on 05.04.2005. He called upon Plaintiff

No. 1 to pay the balance sale consideration of ₹1,65,00,000 within sixty days

CA Nos.7825-7828 of 2013 Page 7 of 25

from that date i.e., from 04.04.2005 and complete the sale. A similar letter was

addressed to Plaintiff No. 2 on the same date.

17. On the very same date, 04.05.2005, Defendant No. 1 revoked the Power of

Attorney in favour of Plaintiff No. 2 by a registered Deed of Revocation. This was

done on the ground that Plaintiff No. 2 had misused the Power of Attorney by

entering into the sub-agreement with Defendant No. 5.

18. Plaintiff No. 1, by reply dated 23.05.2005, disputed the figure of

₹60,00,000/- and asserted that ₹85,00,000/- had been paid, and also pointed

out that the correct date of setting aside of the ex-parte decree was 06.04.2005,

not 04.04.2005 as claimed by Defendant No. 1. Plaintiff No. 2 sent a similar reply

on the same date.

19. On 24.06.2005, counsel for Defendant No. 1 issued legal notices to both

Plaintiff No. 1 and Plaintiff No. 2, purporting to terminate the Agreement to Sell

with effect from 06.06.2005 on the ground of breach by Plaintiff No. 1.

20. Soon thereafter, on 05.09.2005, Defendant No. 1 lodged a complaint

against Plaintiff No. 2 and others before the Judicial Magistrate No. 2, Madurai.

Allegedly as a counterblast to said complaint, a complaint was then preferred by

Plaintiff No. 2 on 27.12.2005 before the Chief Metropolitan Magistrate, Egmore,

Chennai, alleging cheating and criminal breach of trust by Defendant No. 1 in

respect of the ₹85,00,000 paid. Plaintiff No. 2 requested that the Police trace

Defendant No. 1 and recover the amount. FIR No. 11/2006 at PS Central Crime

Branch, Chennai was subsequently registered under Sections 420, 406 & 506 of

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the Indian Penal Code, 1860 on 04.01.2006 on the basis of Plaintiff No. 2’s

complaint. Defendant No. 1 was granted anticipatory bail therein. In due course

of time, both complaints were eventually closed.

21. Plaintiffs also draw our attention to the fact that before the institution of

the subject suit, a Memorandum of Understanding dated 28.04.2005 was signed

by Plaintiff No. 2 with one Reverend Dr. B.A. James Santhosam, Founder,

President and Managing Trustee of the Prince of Pease Trust, No. 16A,

Karaneeswarer Pagoda St. Myalpore, Chennai – 600004, for sale of six flats

bearing Old Door No. 8/6, New Door 16/1 to 16/6, and New Door No. 99/1 to

99/6 belonging to Plaintiffs situated at Karaneeswarar Pagoda Street, Mylapore.

This was for a consideration of ₹1,23,00,000, with the arrangement to subsist

until 30.06.2006. This was projected by Plaintiffs as a step taken to raise the

balance consideration payable to Defendant No. 1. A registered sale deed was

executed in furtherance thereof on 29.05.2006.

22. The subject suit was originally instituted on the original side of the High

Court of Judicature at Madras on 13.09.2005 and numbered on 19.09.2005. It

was subsequently transferred to and renumbered as OS No. 11 of 2006 before

the District Judge, Nilgiris at Udhagamandalam. The suit sought specific

performance of the Agreement to Sell or, in the alternative, recovery of

₹2,00,00,000 with interest at 24% per annum, together with a prayer for an

equitable charge over the suit property and certain injunctive reliefs, though the

latter were ultimately given up by endorsement.

CA Nos.7825-7828 of 2013 Page 9 of 25

Trial Court

23. The substance of the case set up by the Plaintiffs was that Defendant No.

1 had received ₹85,00,000 as advance under the Agreement to Sell; that he had

wrongfully and prematurely terminated the agreement without notifying them on

06.04.2005 that the ex-parte decree in the partition suit had been set-aside and

before the expiry of the stipulated sixty-day period, as calculated therefrom; that

Plaintiffs had always been ready and willing to perform the Agreement to Sell,

having vacated six tenants at their own expense of ₹5,00,000 and engaged a well-

known architect at a further expense of ₹10,00,000 and having sold their own

properties at Chennai to raise the balance consideration; that they had suffered

a business loss estimated at ₹1,05,00,000; and that the rights under the

Agreement to Sell had not been assigned away to Defendant No. 5, as admitted

by Defendant No. 1 himself.

24. Defendant No. 1, in his written statement, denied having received more

than ₹60,00,000. He pleaded that Plaintiff No. 1 had committed breach by failing

to pay the balance within the stipulated sixty days; that he had informed Plaintiff

No. 2 of the setting aside of the ex-parte decree by phone on 04.04.2005 and by

fax on 05.04.2005; that he had validly revoked the Power of Attorney owing to

its misuse by Plaintiff No. 2 in executing the sub-agreement in favour of

Defendant No. 5; that the Plaintiffs, in their counter-statement in IA No. 360 of

2005 in OS No. 75 of 2005 (the suit preferred by Defendant No. 5) had themselves

taken the position that the benefits of the Agreement to Sell had been assigned

to Defendant No. 5 and were thus estopped from contending otherwise in the

CA Nos.7825-7828 of 2013 Page 10 of 25

subject suit and consequently had no locus standi to maintain it; that time was

of the essence of the contract; and that the claims for tenant-eviction expenses,

architect’s fees and business loss were false and concocted.

25. Case of Defendants Nos. 2, 3, & 4 was that they were not signatories to

the sale agreement and not necessary parties; hence, the suit was bad for

misjoinder. Moreover, the partition suit OS No. 182 of 2005 inter alia in respect

of the suit property was still pending and Defendant No. 1 was under an

injunction restraining alienation. Therefore, Plaintiffs were not entitled to specific

performance.

26. Basis the pleadings of the parties, the Trial Court framed ten (10) material

issues for adjudication and after recording the evidence of the parties, the Trial

Court by its judgment dated 22.11.2007 decreed the suit only to the extent of

refund of ₹85,00,000 with interest at the rate of 15% per annum from the date

of suit till realisation, creating a charge on the suit property under Section

55(6)(b) of the Transfer of Property Act, 1882 for the decretal amount, and

dismissed the suit in all other respects without costs.

27. The Trial Court found that Defendant No.1 had received an advance of

₹85,00,000 and that there had been no valid assignment of Plaintiff No. 1’s rights

to Defendant No. 5, as the sub-agreement was entered into by Plaintiff No. 2 in

his capacity as Power of Attorney agent of Defendant No. 1, not as assignee of

Plaintiff No.1’s independent rights and further that the agreement was

subsequently cancelled and Defendant No. 5’s advance was refunded; and his

CA Nos.7825-7828 of 2013 Page 11 of 25

suit being OS No. 75 of 2005 came to be dismissed. The Trial Court rejected the

Plaintiffs’ contentions regarding all the other claims and expenses as unproven.

However, the Trial Court found that in the facts of the case, time was not strictly

of the essence, as performance was contingent on events outside the Plaintiffs'

control, such as setting aside of the ex-parte decree and vacating of tenants, and

that there was no express clause providing for automatic cancellation upon non-

completion within sixty days.

28. However, on the question of relief, notwithstanding the above findings in

favour of Plaintiffs, the Trial Court held that they were not entitled to the

discretionary relief of specific performance. The Trial Court observed that

Plaintiff No. 2, in his criminal complaint, had expressly stated that Defendant

No. 1 ought to be traced and the sum of ₹85,00,000 recovered from him. Plaintiff

No. 2 had further stated in the complaint that he would not have entered into

the agreement at all had he known of the injunction order subsisting in respect

of the suit property. The Trial Court noted that Plaintiff No. 1 had never disowned

these averments by her husband and did not even step into the witness box.

Holding that Plaintiffs could not blow hot and cold at the same time, the Trial

Court held they had not approached the Court with clean hands and were

accordingly not entitled to the equitable relief of specific performance under

Section 20 of the Specific Relief Act, 1963.

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High Court

29. Aggrieved solely by such refusal of specific performance, Plaintiffs

instituted an appeal before the High Court, being AS No. 443 of 2008, in which,

vide the impugned judgment dated 11.10.2011, the Division Bench set aside the

Trial Court’s findings on Issue (x) and decreed specific performance.

30. At the outset, the High Court allowed MP No. 1 of 2010 under Order XLI

Rule 27 CPC and received additional evidence, namely a xerox copy of the

complaint dated 05.09.2005 lodged by Defendant No. 1 against Plaintiff No. 2

before the Judicial Magistrate No. 2, Madurai. The High Court noted that the

same was an admitted document, filed by Defendant No. 1 himself in OA No.

5435/2005 in CS No. 838/2005, and none of the respondents therein objected

to the Court receiving it. It was relied upon by Plaintiffs, as appellants therein,

to show that the complaint lodged by Plaintiff No. 2 was only a counterblast to

the earlier complaint. The High Court considered it a vital document and marked

it as Ex. A-48.

31. On the point of cross-objections, the High Court, relying on S. Nazeer

Ahmed v. State Bank of Mysore and Ors.

3

held that Defendant No. 1 could

support the decree by impugning an adverse finding without filing cross -

objections, as he sought no additional relief.

32. On clean hands, High Court observed that the complaint dated 27.12.2005

had been filed by Plaintiff No. 2 alone, not by Plaintiff No. 1, the actual vendee.

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2007 INSC 34

CA Nos.7825-7828 of 2013 Page 13 of 25

The High Court also found merit in Plaintiffs’ contention that the complaint was

a counterblast to that filed by Defendant No. 1, who had deliberately filed it

before a court in Madurai having no territorial jurisdiction, and that in a criminal

complaint, a complainant cannot seek specific performance, only recovery of

money. The mere seeking of such recovery did not amount to waiver or

abandonment under Section 63 of the Indian Contract Act, 1872.

33. On readiness and willingness, the High Court held that since Defendant

No. 1 had not specifically pleaded in his written statement nor deposed in his

chief examination that the Plaintiffs lacked funds, this contention could not be

raised for the first time before the Appellate Court. In the High Court’s view, the

MoU and the subsequent sale of properties at Chennai demonstrated that

Plaintiffs had arranged funds. Moreover, they produced a demand draft for

₹1,40,00,000 dated 14.06.2011 before the Division Bench at the hearing of the

appeal itself, demonstrating their continuing readiness.

34. Therefore, vide the impugned judgement, the High Court set aside Trial

Court’s refusal and decreed the suit for specific performance, and directed

Plaintiff No. 1 to deposit ₹1,40,00,000 before the Trial Court within four weeks,

upon which Defendant No. 1 was to execute the sale deed. If the same was not

done, the Trial Court was to execute it on his behalf. This judgement came to be

assailed by Defendant No. 1 before this Court by way of the instant Appeals.

CA Nos.7825-7828 of 2013 Page 14 of 25

Analysis

35. 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.

36. Lastly, Defendant No. 1 has also contended that since Plaintiffs did not

seek declaratory relief that the termination of the Agreement to Sell was invalid,

the suit was not maintainable from the outset, and the same was pleaded in his

written statement as well. The legal question underlying this contention has been

addressed by the recent judgment of this Court viz. Annamalai vs. Vasanthi

and Others

4

“32. In our view, a declaratory relief would be required where a doubt

or a cloud is there on the right of the plaintiff and grant of relief to the

plaintiff is dependent on removal of that doubt or cloud. However,

whether there is a doubt or cloud on the right of the plaintiff to seek

consequential relief, the same is to be determined on the facts of each

case. For example, a contract may give right to the parties, or any one

of the parties, to terminate the contract on existence of certain

conditions. In terms thereof, the contract is terminated, a doubt over

subsistence of the contract is created and, therefore, without seeking

a declaration that termination is bad in law, a decree for specific

performance may not be available. However, where there is no such

right conferred on any party to terminate the contract, or the right so

conferred is waived, yet the contract is terminated unilaterally, such

termination may be taken as a breach of contract by repudiation and

the party aggrieved may, by treating the contract as subsisting, sue

for specific performance without seeking a declaratory relief qua

4

2025 INSC 1267

CA Nos.7825-7828 of 2013 Page 15 of 25

validity of such termination. Plaintiff-appellant was not required to

seek a declaration.”

(emphasis supplied)

Defendant No. 1 relies on the previous decisions of the Court in I.S. Sikandar

(D) By LRs. & Ors vs. K. Subramani & Ors.

5

and R. Kandasamy (Since Dead)

& Ors. vs. T.R.K. Sarawathy & Anr.

6

. We note that the latter expressly

reconciles I.S. Sikandar (supra) with the conflicting precedent in Mrs. A.

Kanthamani vs. Mrs. Nasreen Ahmed

7

in the following terms:

“41. A comprehensive reading of the two decisions reveals that in a

fact scenario where the vendor unliterally cancels an agreement for

sale, the vendee who is seeking specific performance of such

agreement ought to seek declaratory relief to the effect that the

cancellation is bad and not binding on the vendee. This is because an

agreement, which has been cancelled, would be rendered non-existent

in the eyes of law and such a non -existent agreement could not

possibly be enforced before a court of law. Both the decisions cited

above are unanimous in their approval of such legal principle.

However, as clarified in Kanthamani (supra), it is imperative that an

issue be framed with respect to maintainability of the suit on such

ground, before the court of first instance, as it is only when a finding

on the issue of maintainability is rendered by trial court that the same

can be examined by the first or/and second appellate court. In other

words, if maintainability were not an issue before the trial court or the

appellate court, a suit cannot be dismissed as not maintainable. This

is what Kanthamani (supra) holds.”

This was followed in Annamalai (supra).

37. 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

5

2013 INSC 577

6

2024 INSC 884

7

2017 INSC 202

CA Nos.7825-7828 of 2013 Page 16 of 25

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 the issue concerning readiness and willingness

38. Although the Trial Court did not frame any issue relating to readiness and

willingness of the Plaintiffs, however while deciding issue (vi), the Trial Court

found that the Plaintiffs had no funds at the time of filing of the suit, neither

Plaintiffs deposited the balance amount nor had kept apart the required funds

ready from the date of the agreement. It is to be noted that Plaintiff No.1 was

not examined as a witness and, thus, she cannot disown the averment of the

complaint filed by Plaintiff No.2 wherein he only demanded return of money after

filing of the suit. 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 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

CA Nos.7825-7828 of 2013 Page 17 of 25

continuously at all material points of time i.e., soon after the agreement till the

execution of the decree.

39. It is also to be seen that the purported MoU dated 28.04.2005 between

Plaintiff No.2 and Dr. B.A. James Santhosam was neither mentioned in Plaintiff

No.2’s reply dated 23.05.2005 (Ex.A-24) nor in the plaint filed on 12.09.2005.

The MoU nowhere demonstrates that money was being transferred into the

plaintiffs’ account. Thus, considering the evidence on record, the High Court’s

finding that the plaintiffs had funds available with them is erroneous. This is

more clear from the fact that two cheques dated 10.04.2004 and 24.05.2004 for

₹25,00,000 and ₹5,00,000 respectively issued in favour of the

appellant/defendant were dishonoured due to insufficient fund in plaintiffs’

account. Even if the amounts involved in the cheques were later paid by cash,

the fact remains that the plaintiffs had no funds in their bank account leading

to dishonour of cheques. Even the Trial Court had found that the plaintiffs had

no funds in the bank account. Once again, MoU dated 28.04.2005 between

Sowrirajan and Dr. B.A. James Santhosam records that B.A. James Santhosam

would buy plaintiffs’ property for ₹1,23,00,000 once it is found that it has no

encumbrances. The sale deed basing MoU was executed for ₹1,23,00,000 on

29.05.2006. Thus, it clearly demonstrates that on the date of filing of the suit,

i.e., 12.09.2005, the plaintiffs had no funds.

CA Nos.7825-7828 of 2013 Page 18 of 25

40. In the matter of Janardan Das and Others v s. Durga Prasad

Agarwalla and Others

8

, this Court held thus in paragraph 13.4:

“13.4. The Court observed that the plaintiffs failed to demonstrate

continuous readiness and willingness to perform their part of the

contract. They did not take effective steps to secure the consent and

presence of the sisters within the three-month period specified in the

agreement. Their inaction and reliance solely on Defendant 1 and late

Soumendra indicated a lack of diligence and commitment to fulfilling

the contractual obligations.”

41. This Court in N.P. Thirugnanam (Dead) by LRs. vs. Dr. R. Jagan Mohan

Rao and Others

9

highlighted the importance of continuous readiness and

willingness in a case where the plaintiff is seeking specific performance. This

Court in paragraph 5 held thus:

“5. It is settled law that remedy for specific performance is an equitable

remedy and is in the discretion of the court, which discretion requires

to be exercised according to settled principles of law and not arbitrarily

as adumbrated under Section 20 of the Specific Relief Act, 1963 (for

short “the Act”). Under Section 20, the court is not bound to grant the

relief just because there was a valid agreement of sale. Section 16(c) of

the Act envisages that plaintiff must plead and prove that he had

performed or has always been ready and willing to perform the

essential terms of the contract which are to be performed by him, other

than those terms the performance of which has been prevented or

waived by the defendant. 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. To adjudge whether the plaintiff is ready and willing to

perform his part of the contract, the court must take into

consideration the conduct of the plaintiff prior and subsequent to the

filing of the suit along with other attending circumstances. The

amount of consideration which he has to pay to the defendant must

of necessity be proved to be available. Right from the date of the

execution till date of the decree he must prove that he is ready and

has always been willing to perform his part of the contract. As stated,

the factum of his readiness and willingness to perform his part of the

contract is to be adjudged with reference to the conduct of the party

and the attending circumstances. The court may infer from the facts

8

2024 SCC OnLine 2937

9

(1995) 5 SCC 115

CA Nos.7825-7828 of 2013 Page 19 of 25

and circumstances whether the plaintiff was ready and was always

ready and willing to perform his part of the contract.”

42. Yet again, in Nanjappan vs. Ramasamy & Anr.

10

, this Court has

summarized the position of law, as it stood before 2018, as follows:

“12. Under Section 20 of the Specific Relief Act, grant of specific

performance of contract is discretionary. Though the decree for

specific performance is discretionary, yet the court is not bound to

grant such a relief merely because it is lawful to do so. But the

discretion of the court is not arbitrary, but sound and reasonable,

guided by judicial principles of law and capable of correction by a court

of appeal and should be properly exercised keeping in view the settled

principles of law as envisaged in Section 20 of the Act. The jurisdiction

of decreeing specific performance is a discretion of the court and it

depends upon facts and circumstances of each case. The court would

take into consideration circumstances of each case, conduct of the

parties, recitals in the sale agreement and the circumstances outside

the contract have to be seen.

13. In Sardar Singh vs. Smt. Krishna Devi & Anr., (1994) 4 SCC 18,

this Court observed that as the court has to see the totality of the

circumstances, conduct of the parties and respective interests under

the contract while granting/refusing such relief.”

(emphasis supplied)

43. In Kamal Kumar vs. Premlata Joshi & Ors.

11

, the Court further

elucidated:

“10. It is a settled principle of law that the grant of relief of specific

performance is a discretionary and equitable relief. The material

questions, which are required to be gone into for grant of the relief of

specific performance, are first, whether there exists a valid and

concluded contract between the parties for sale/purchase of the suit

property; second, whether the plaintiff has been ready and willing to

perform his part of contract and whether he is still ready and willing

to perform his part as mentioned in the contract; third, whether the

plaintiff has, in fact, performed his part of the contract and, if so, how

and to what extent and in what manner he has performed and whether

such performance was in conformity with the terms of the contract;

fourth, whether it will be equitable to grant the relief of specific

performance to the plaintiff against the defendant in relation to suit

property or it will cause any kind of hardship to the defendant and, if

so, how and in what manner and the extent if such relief is eventually

10

2015 INSC 152

11

2019 INSC 16

CA Nos.7825-7828 of 2013 Page 20 of 25

granted to the plaintiff; and lastly, whether the plaintiff is entitled for

grant of any other alternative relief, namely, refund of earnest money

etc. and, if so, on what grounds.”

44. On the point of a plaintiff’s conduct, specifically, this Court in the recent

decision of Major Gen. Darshan Singh (D) By LRs & Anr. vs. Brij Bhushan

Chaudhary (D) By LRs

12

had succintly summed it up:

“9. Under Section 20 of the 1963 Act, the grant of a decree for specific

performance is always discretionary. The exercise of discretion

depends on several factors. One of the factors is the conduct of the

plaintiff. The reason is that relief of a decree of specific performance is

an equitable relief. A person who seeks equity must do equity.”

(emphasis supplied)

45. 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.

12

2024 INSC 157

CA Nos.7825-7828 of 2013 Page 21 of 25

46. We note that before the High Court, Plaintiffs had themselves drawn

attention to the fact that Defendant No. 1’s criminal complaint and the subject

suit were instituted in succession on 05.09.2004 and 13.09.2005, respectively,

while the counter-complaint came to be preferred only on 27.12.2005. We also

note that the latter does not disclose the initiation of civil proceedings. In our

view, therefore, the Trial Court was quite justified in observing that the Plaintiffs

were blowing “hot and cold” about the relief they sought.

47. The fact that Plaintiff No. 2 (and not Plaintiff No. 1) lodged the FIR cannot

be a justification; after all, he was hardly a stranger to the Agreement to Sell.

From the inception, the Agreement to Sell, the Power of Attorney, and the

undertaking given by Plaintiff No. 2 on 01.04.2004 made it clear he was central

to the transaction. Defendant No. 1 has strenuously urged this point before us,

relying principally on Janki Vashdeo Bhojwani and Anr. vs. IndusInd Bank

Ltd. and Ors.

13

and Rajesh Kumar vs. Anand Kumar & Ors.

14

and the same

was also found by the Trial Court at the first instance. We are inclined to agree.

Plaintiff No. 1 neither disowned her husband’s conduct nor stepped into the

witness box to give her account, and thus cannot derive advantage from the

technical fact that the counter-complaint was given by her husband Plaintiff No.

2 and not herself. Plaintiffs cannot seek to be treated as a composite unit when

it benefits them, but resile from the position when it does not.

13

2004 INSC 695

14

2024 INSC 444

CA Nos.7825-7828 of 2013 Page 22 of 25

48. Moreover, Defendant No.1’s objection that Plaintiffs have also taken

inconsistent stands in the subject suit and OS No. 75 of 2005 also has merit. In

Plaintiffs’ legal notices dated 23.05.2005 and the pleadings filed by Plaintiff No.

2 in OS No. 75 of 2005, their position was that the rights under the Agreement

to Sell had been assigned to Defendant No. 5 with the knowledge and consent of

Defendant No. 1. Hence, the sub-agreement was valid and binding. Yet, in the

present proceedings, the Plaintiffs consistently assert that there had been no

assignment divesting Plaintiff No. 1 of her contractual rights and that she alone

remained entitled to seek specific performance. Whether the transaction with

Defendant No. 5 amounted in law to an assignment is ultimately not impugned.

Neither can we comment on the commercial rationale underlying such an

‘onwards’ agreement. What is material here is that the Plaintiffs adopted two

contradictory positions which are impossible to reconcile.

49. Moreover, we must examine the legal implications of Plaintiff No. 2

agreeing to sell the suit property to Defendant No. 5 while the Agreement to Sell

was subsisting and payments were being made thereunder. If he did so in his

capacity as Defendant No. 1’s constituted attorney, then he intended to alienate

the suit property before title could pass to his wife under the Agreement to Sell,

that too for a lower consideration of Rs. 1,50,00,000. Alternatively, if he did it on

behalf of his wife (though this is not reflected in the sub-agreement), then her

rights would have necessarily assigned to Defendant No. 5. Although both the

Power of Attorney and the sub-agreement were subsequently cancelled, we can

appreciate why Defendant No. 1 asserts that he takes issue with Plaintiffs

CA Nos.7825-7828 of 2013 Page 23 of 25

creating third-party rights behind his back before Plaintiff No. 1’s title was

complete. Defendant No. 1 has specifically contended before us that he was made

to face trial in OS No. 75 of 2005 and Defendant No. 5 even obtained an interim

injunction therein on 11.06.2005, which was vacated at Defendant No. 1’s

instance on 10.08.2005.

50. In fact, at the close of OS No. 75 of 2005, the Sub-Court had made a

number of observations that cannot be brushed aside lightly. It was found that

the suit had been undervalued in order to invoke the Court’s jurisdiction and

also that plaintiff therein (i.e. Defendant No. 5) was acting “hand in hand” with

present Plaintiff No. 2 and was no more than a “tool”, “name-lender” or mere

“puppet plaintiff”. While denying interlocutory relief, the Sub-Court had held that

if the sub-agreement were genuinely valid, the proper remedy was a suit for

specific performance, not one for bare injunction through Defendant No. 5.

51. It appears to us that the Plaintiffs may have been desirous of purchasing

the suit property and even took steps towards it; however, their subsequent

inconsistent conduct countervails the grant of an exceptional and equitable

remedy such as specific performance under the unamended Specific Relief Act,

1963. We quote here from our judgement Muddam Raju Yadav v s. B. Raja

Shanker (D) Through LRs & Ors .

15

pronounced earlier this year:

“12. In a suit for specific performance, the conduct of the parties is

significant as it assists the Court in evaluating the evidence to find out

the bona fides of the parties at the time of execution of the agreement.

Even a slight doubt in the mind of the Court that the plaintiff was not

15

2026 INSC 214

CA Nos.7825-7828 of 2013 Page 24 of 25

acting bonafidely and that the material facts, having bearing on the

agreement, have been withheld in the agreement itself and from the

Court also, the equitable and discretionary relief has to be denied. A

plaintiff approaching the Court with uncleaned hands, like in the

present case—the plaintiff having withheld the document i.e., MoU

(Exhibit B-2), as the same was nowhere mentioned in the plaint, the

present was a fit case for denial of relief of specific performance and

the High Court has rightly allowed the appeal preferred by the

respondent(s)/defendant(s) to set aside the judgment and decree

passed by the Trial Court.”

(emphasis supplied)

52. 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.

16

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. As

held in Kamal Kumar (supra), hardship to the defendant is also a recognised

factor in the exercise of discretion under Section 20 of the Specific Relief Act,

1963. Justice here requires that we restore and leave the parties where they

stood before the transaction.

53. Accordingly, we allow these Civil Appeals and set aside the impugned

judgment and decree of the High Court and restore the judgment and decree

passed by the Trial Court. Plaintiffs had deposited ₹1,40,00,000 with the State

Bank of India, Udhagamandalam Branch on 12.11.2011, which was put in a

fixed deposit with a nationalised bank pursuant to the order of this Court dated

16

2011 INSC 446

CA Nos.7825-7828 of 2013 Page 25 of 25

20.01.2012. They are hereby permitted to withdraw the said amount along with

the accrued interest. In the facts and circumstances of the case, there will be

no order as to costs.

………………………………………J.

(PRASHANT KUMAR MISHRA)

………………………………………J.

(N.V. ANJARIA)

NEW DELHI;

JULY 31, 2026.