Specific Performance And The Cloud-Of-Doubt: When Is Declaratory Relief Required?

Does a plaintiff suing for specific performance or injunction also need to include a prayer for declaration? Would the failure to include a separate prayer for declaration raise maintainability related concerns?

Recently, in Annamalai v. Vasanthi (2025), the Supreme Court refined the “cloud-of-doubt” test laid down in Anathula Sudhakar v. P. Buchi Reddy (2008), for determining when a suit for specific performance or injunction may be maintained without seeking a declaration of the predicate right. On principle, the court ruled that in cases where there is no challenge to the plaintiff's underlying right, either under contract or statute, the suit for specific performance or injunction may be maintained without asking for declaratory relief. However, in cases where a cloud of doubt is cast on the plaintiff's underlying right, either under the contract, title deed, or statute, the plaintiff would first need to succeed on a distinct prayer for declaration of the right or title, before proceeding to the consequential prayer of specific performance or injunction. The court ruled that the suit may suffer from a maintainability embargo if a separate prayer for declaration has not been made, where such a cloud looms.

Hence, as in Anathula Sudhakar, in a suit for perpetual injunction in respect of vacant sites, where the defendant not only challenged the plaintiff's title, but set up a rival claim for title based on an oral gift and ostensibly genuine records from an earlier owner, the plaintiff cannot maintain a suit only for injunction, without a prayer for declaration of title. The rationale being that the finding of valid title (i.e. the underlying right) would be primary to granting the consequential injunction.

In Annamalai, the Supreme Court decreed a suit for specific performance of an agreement to sell, by reversing the ruling of the Madras High Court which held that the plaintiff ought to have sought for the termination of the agreement by the defendant to be declared illegal to maintain the suit for specific performance. After weighing the facts, the Supreme Court concluded that the termination of the contract by the defendant would not be valid since he had, by conduct, waived the contractual timelines mandated. The agreement stipulated that, if the balance consideration was not paid within six months, the vendee would lose the earnest money – thus envisaging forfeiture for delay. However, the vendor accepted delayed payments from the vendee well after the contemplated six-month period and subsequently contended that they could terminate for failure to make timely payments. Even assuming such a termination right, the Supreme Court held that it had been waived by subsequent conduct of accepting delayed payments in furtherance of the contract.

Evolution of the Cloud-of-Doubt Test

The Court in Anathula Sudhakar clarified the precise contours within which a “cloud” arises over a person's title. It held that a “prayer for declaration will be necessary only if the denial of title by the defendant or challenge to plaintiff's title raises a cloud on the title of plaintiff to the property. A cloud is said to raise over a person's title, when some apparent defect in his title to a property, or when some prima facie right of a third party over it, is made out or shown.” In such situations, a declaratory suit is the appropriate remedy to remove the cloud. Conversely, “where the plaintiff has clear title supported by documents, if a trespasser without any claim to title or an interloper without any apparent title, merely denies the plaintiff's title, it does not amount to raising a cloud over the title of the plaintiff and it will not be necessary for the plaintiff to sue for declaration.”

While the Court's formulation aims to distinguish genuine challenges to title from mere denials, it creates a practical difficulty for plaintiffs at the stage of filing the suit. The test requires that a plaintiff anticipates the defence and determine whether the facts known to her casts a cloud over the her right/title and accordingly include a declaratory prayer in the plaint – or amend the plaint once the written statement reveals a credible challenge to title. Anathula Sudhakar acknowledges the possible need for an amendment as an integral part of the doctrinal design and countenances dynamic recalibration of reliefs as the mechanism for handling clouds that become visible after the defence is filed.

Following Anathula Sudhakar, the cloud-of-doubt test steadily expanded through a series of Supreme Court decisions, each reinforcing its scope. In I.S. Sikandar v. K. Subramani (2013), the Court held that once an agreement for sale had been terminated in accordance with contractual terms, a suit for specific performance was not maintainable without a declaratory relief setting aside the termination. Maintainability thus was directly linked to the need for a declaration.

This slant continued in T.V. R. Ramakrishna Reddy v. M. Mallappa, (2021) where the Court directly applied Anathula Sudhakar to hold that a suit for bare injunction was not maintainable because the defendant had raised a genuine cloud-on-title. Like Anathula Sudhakar's case, the land was vacant. This made lawful possession dependent entirely on proving title first, thus requiring a comprehensive suit for declaration and possession.

In Kayalulla Parambath Moidu Haji v. Namboodiyil Vinodan, (2022) the Supreme Court reaffirmed that where a cloud exists, a bare injunction suit cannot lie, allowing the plaintiff (as had the High Court) to amend the suit to include a declaration so that ownership could be conclusively determined before any injunctive relief was granted. Similarly, in Rajeev Gupta v. Prashant Garg, (2025) the Court held that the appellate court had erred in granting possession without a decree of declaration or cancellation of sale deeds, finding the plaint “incurably defective” for failing to follow the Anathula Sudhakar framework.

Annamalai is a worthy successor to Anathula Sudhakar for having made two conceptual refinements to how the cloud of doubt applies to contracts – first, identifying when doubt arises in the context of terminated contracts; second, articulating the void act exclusion.

Annamalai holds that where the termination of a contract is pursuant to an agreed default clause, a cloud exists on the subsistence of the contract, and a declaration to eliminate the doubt is needed. However, where termination is for repudiatory breach or after waiver it casts no doubt on the contract itself and therefore a distinct prayer for declaration would not be needed. Next, Annamalai holds that where the plaintiff's right is resisted based on void acts or transactions, no declaratory relief is needed. However, where voidable instruments are pressed as a defence to deny a right, cancellation or declaration under Sections 31 to 34 of the Specific Relief Act, 1963 ('SRA') would be needed.

Annamalai further draws on Rajeev Gupta to hold that the need for declaratory relief may be examined at any stage as an issue of maintainability, thereby entrenching the cloud of doubt test as a foundational principle in the realm of specific performance and injunction.

The Prayer-Issue Dichotomy

One key self-directed query posed in Anathula Sudhakar is “whether a finding regarding title could be recorded in a suit for injunction simpliciter, in the absence of pleadings and issue relating to title.” In the context of the cloud-of-doubt pleadings, issues and ultimately the prayer are at the eye of the storm. The prayer-issue dichotomy, presents itself in two limbs rooted in the law of procedure – the Code of Civil Procedure, 1908 ('CPC'), and the Specific Relief Act, 1963 ('SRA').

The CPC limb:

One may argue that under CPC the prayer is only a statement of what end result the plaintiff has approached the court for. Order VI of the CPC requires that a plaint or written statement contain only a “statement in concise form of the material facts”. These are the facts on which a party relies for its claim or defence. Rule 3 of Order VI refers to Appendix A as the model to be followed for pleadings. For example, point 6 of Form No. 1(3) in Appendix A prescribes a simple prayer clause: “The plaintiff claims … rupees, with interest at … percent, from the … day of ….”. The relief clauses follow the same pattern for several other categories of suits as well.

Pertinently, Forms 47 and 48 illustrate two versions of suits of specific performance. Form 47 deals with an agreement to sell which the defendant has failed to perform. The prayer prescribed is an order from the court directing “the defendant specifically to perform the agreement and to do all acts necessary to put the plaintiff in full possession…” In Form 48, which again deals with an agreement for transfer of property by registered instrument where the defendant has failed to perform the agreement, the prayer prescribed is “That the defendant transfers the said property to the plaintiff by a sufficient instrument […]”

So much for the form the prayer takes.

Order XIV on the other hand clarifies how a court isolates the core issues in dispute between the parties and then decides it.

Order XIV Rule 1 provides that an issue arises “when a material proposition of fact and law is affirmed by the one party and denied by the other” Rule 2 further explains that “material propositions are those propositions of law or fact which a plaintiff must allege in order to show a right to sue, or defendant must allege in order to constitute his defence”. Rule 3 then goes on to guide the court in the framing of issues by providing that “each material proposition affirmed by one party and denied by another [either by pleadings or documents] shall form the subject of a distinct issue”.

Order VI Rule 2, which follows from the issues framed in the suit, goes on to direct that the Court shall pronounce judgment on all issues.

Thus, from the totality of Order VI and Order XIV one sees that:

1. the crux of the dispute arises from the rival pleadings or documents of the party,
2. the issues framed deal with the rival contentions taken, either in fact or in law, and
3. a judgment is to be pronounced on every issue that is framed.

The ratio of Anathula Sudhakar would however require of the plaintiff that where the doubt raised is serious, a prayer for declaration aimed at removing the doubt and establishing the underlying right be included.

The SRA limb:

The SRA outlines the framework within which courts may grant reliefs once the plaintiff establishes the relevant right or legal character, and the grant of such relief is therefore contingent on the prior establishment of that right.

Section 34 of the SRA i.e., dealing with the declaratory decrees allows any person entitled to a legal character or to any right in property to sue another who denies, or is interested in denying, that character or right. Section 34 expressly provides that a plaintiff seeking a declaration “need not in such suit ask for any further relief”.

To this a proviso is appended to state that “no court shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title omits to do so.” The provision makes two things clear – (i) a suit that is only for declaration does not require a plaintiff to seek any additional relief; and (ii) if consequential relief is available and the plaintiff fails to claim it, the court would not grant the declaration. Conversely, there is no implied corollary to the proviso to Section 34, i.e., while a plaintiff seeking a declaration must also claim consequential relief where it is available, yet there is no corresponding mandate that a plaintiff seeking only the final consequential relief must also specifically urge a declaration of right or title. That I suggest is relegated to the CPC's domain of issue framing.

Similarly, Sections 38 to 40 and Section 42 also do not impose an imperative that a declaration must be sought in order for the consequential injunctive relief to be granted.

Viewed in this background, Annamalai's insistence on maintainability is not founded on a reading of CPC or SRA that forces redundant declaratory prayers, but on the conceptual principle that where the very subsistence of the right is materially disputed, the court cannot grant consequential relief without first determining that subsistence as a primary issue.

Harmonising the Prayer-Issue Dichotomy with a unified Cloud Taxonomy

So, when is declaratory relief required?

In Annamalai, the court finally held on facts that there was no need for declaratory relief because by its own conduct of waiver, the defendant had not cast any cloud of doubt on the plaintiff's right. The refinement that Annamalai contributes can be summarised as follows:

1. Where there is no apparent defect in title or right, and the challenge from the defendant is a mere denial with little substance, there is no cloud formed, and hence no declaration is needed.
2. Where the defendant sets up a serious challenge to title over property through rival registered documents that are otherwise not void, a cloud of doubt is formed and hence declaration of title would be needed. This was the scenario in Anathula Sudhakar.
3. Where the contract expressly provides for a termination-for-cause and such a termination is urged by the defendant – a prayer declaring the termination invalid along with a prayer for specific performance or injunction would be needed.
4. Where termination is claimed on a repudiatory basis and the contract does not provide an express termination-for-cause clause, or where there is waiver, the plaintiff may treat the contract as subsisting, and a prayer for declaration is not needed.
5. Where the defendant's case is based on a void instrument a prayer for declaration or cancellation is not needed. However, where the defence urged is based on a voidable document, declaration or cancellation as stipulated under SRA would be in order.

Therefore, the existence or the nature of the cloud involved would be a material factor under Order XIV of the CPC, and issues will accordingly be framed once pleadings and documents reveal rival claims. Only if that issue is determined in favour of a “serious cloud” category does the absence of a declaratory prayer become jurisdictionally fatal to the relief sought, as seen in Anathula Sudhakar, Sikandar and Rajeev Gupta. Where the issue determined falls into the repudiatory breach, waiver or void act category, the absence of a declaration is procedurally harmless and the court can grant specific performance or injunction based on the subsisting right, as was the case in Annamalai.

Conclusion: Charting a Coherent Path for Cloud-of-Doubt Litigation

The cloud of doubt principle is not without its obvious pitfalls. For the litigant, the cloud always looms for she must anticipate whether a defendant's pleas will pose a doubt requiring a declaration or one that does not need it. She must also determine whether an impugned document is void (and therefore does not require declaration or cancellation) or merely voidable (and therefore does). The distinction cannot reliably be drawn at the time of filing the suit, before the defence is known and, sometimes, before evidence is led. Plaintiffs therefore must navigate a shifting landscape in which the maintainability of their suit may turn on unforeseeable nuanced legal characterisations, defences, and eventual rulings by court.

To use Annamalai's journey to the Supreme Court as an example – the trial court initially dismissed the suit for specific performance of the sale agreement (the cloud existed), the court of first appeal reversed the trial court and decreed the suit for specific performance (the cloud was not seen as a hurdle), the High Court thereafter allowed the second appeal by setting aside the first appellate court's judgment (the cloud reappeared), and finally the Supreme Court via special leave decreed the suit for specific performance (an act of waiver pushed away the cloud). The cloud of doubt thus appeared and disappeared at every other stage.

Despite undoubted refinements that Annamalai has contributed, the natural safe harbour for plaintiffs would be to:

1. seek a declaration of right or title on each potential issue that may resemble the cloud of doubt, lest a future court were to hold that the cloud was missed when it first appeared.
2. for the plaintiff to amend her plaint to include declaratory reliefs if the defendants' written statements raises claims that challenge her predicate right that can be perceived to cast a doubt on it; and
3. ensure that an issue is framed for the plaintiff to specifically prove the predicate right to confirm that no cloud of doubt hangs on the maintainability of the suit.

Of the above three imperatives, while the last requirement of having an issue framed would be in the natural course of Order XIV of the CPC, the first two requirements are precedent-driven safeguards that plaintiffs may adopt to keep the proverbial cloud at bay.

Author is lawyer practicing in the Supreme Court and High Court of Karnataka and Partner, Keystone Partners, Bangalore.

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