Know The Law | When Can Part Performance Of Contract Be Allowed As Per Section 12(3) Specific Relief Act?

The Supreme Court ruled that part performance of the contract under Section 12(3) of the Specific Relief Act, 1963 (“SRA”) cannot be claimed when the unperformed portion is substantial and non-segregable, and the plaintiff neither relinquishes claims for the unperformed part or damages nor shows readiness to perform the contract. As per Section 12(3) of the SRA, for claiming a part performance of the contract, the plaintiff either needs to relinquish the claims associated with the unperformed part of the contract or express readiness and willingness to perform the contract by making full payment of the agreed consideration for the contract The bench comprising Justice JB Pardiwala and Justice R Mahadevan was hearing the case arising out of Madras High Court where the Petitioner/Plaintiff, sought specific performance of an agreement of sale. The suit was for the specific performance of the contract or, alternatively, for the refund of the advance payment with damages. The High Court dismissed the appeal, affirming the trial court's decision, which rejected the prayer for specific performance, citing that the plaintiff was not ready and willing to perform his part of the contract. The Petitioner/plaintiff invoked Section 12(3) of the SRA seeking a part performance of the agreement to sell for which he paid Rs. 20 Lakhs as an advance and didn't pay the remaining Rs. 64 Lakhs for the unperformed part of the contract that formed a significant part of the contract. He neither relinquished his claims for the remaining portion of the contract. Instead, he sought damages and a refund of the advance, indicating his reluctance in not fully relinquishing his claims to the unperformed part of the contract, which is a key requirement under Section 12(3). Rejecting the petitioner's argument, the Court affirmed the High Court's decision and observed that the petitioner cannot claim part performance of the contract by invoking Section 12(3) of the SRA because he had neither relinquished all claims or rights to compensation for the unperformed part of the contract nor make full payment of the contract, which is a mandatory condition for invoking Section 12(3). “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 Court observed. “In view of the specific finding recorded by the courts below that the plaintiff was not ready and willing to perform his part of the contract and the plaintiff being in default he could not be said to be entitled to invoke Section 12(3) of the Act also.”, the Court added. Accordingly, the Court dismissed the Appeal.Also read - Specific Relief Act | Relinquishment Of Claims Under S.12(3) For Part Performance Can Be Made At Any Stage Of Litigation : Supreme CourtCase Title: VIJAY PRABHU VERSUS S.T. LAJAPATHIE & ORS. Citation : 2025 LiveLaw (SC) 59Click here to read/download the orderAppearance:For Petitioner(s) Mr. S Nagamuthu, Sr. Adv. Mr. Namit Saxena, AORFor Respondent(s) Mr. Balaji Srinivasan, AOR Ms. Harsha Tripathi, Adv.

Know The Law | When Can Part Performance Of Contract Be Allowed As Per Section 12(3) Specific Relief Act?

Yash Mittal

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