Specific Performance Of Registered Agreement To Sell Is No Longer Discretionary Post-2018 Amendment: Allahabad High Court

"After the amendment with effect from 1-10-2018, the relief of specific performance of contract is no longer discretionary. The Court is, now obliged to enforce the specific performance of a contract, subject to the provisions of Section 11(2), 14 and 16 of the Specific Relief Act," Allahabad High Court, in a significant ruling, held that the grant of specific performance of a contract has ceased to be a discretionary remedy following the 2018 amendment to the Specific Relief Act.

A bench of Justice Sandeep Jain observed that the substitution of Section 10 of the Act has transformed the nature of the relief from being dependent on judicial discretion to being a mandatory statutory obligation, provided the essential conditions under Sections 11(2), 14, and 16 are satisfied.

The dispute arose from an appeal filed by a defendant against a trial court decree for the specific performance of a registered agreement to sell a residential property in Bhadohi. The appellant challenged the decree on grounds of alleged fraud and lack of financial capacity on the part of the plaintiff, but the High Court dismissed the appeal, affirming that registered documents carry a formidable presumption of validity that cannot be lightly brushed aside.

The plaintiff, Ganesh Prasad, filed a suit for specific performance regarding a registered agreement to sell dated December 30, 2019, executed by the defendant, Tushar Agrawal, for a consideration of ₹30 lakhs. While ₹20 lakhs was paid as earnest money via cheque, the defendant subsequently refused to execute the sale deed, alleging that the agreement was fraudulently obtained through his business relationship with the plaintiff. The Trial Court decreed the suit in favor of the plaintiff, leading to the present First Appeal under Section 96 CPC.

The primary question before the court was whether the relief of specific performance remains discretionary after the 2018 amendment to the Specific Relief Act. The court also examined whether a registered agreement to sell carries a presumption of validity and what constitutes sufficient evidence to prove 'readiness and willingness' under Section 16(c) of the Act.

Mandatory Specific Performance

Specific Performance Is No Longer Discretionary Post-2018 Amendment

The court conducted an in-depth analysis of the legislative shift in the Specific Relief Act, particularly the amendment to Section 10. The bench noted that prior to October 1, 2018, the provision stated that specific performance "may" be enforced at the discretion of the court. However, the amended provision now dictates that specific performance "shall" be enforced by the court subject to specific exceptions.

The bench emphasized that this change removes the historical leeway courts enjoyed in refusing specific performance on purely equitable grounds. Relying on the Supreme Court's decision in B. Santoshamma v. D. Sarala, the court observed that the judiciary is now bound to enforce such agreements unless they fall within the prohibited categories.

"The court is now obliged to enforce the specific performance of a contract, subject to the provisions of sub-section (2) of Section 11, Section 14 and Section 16 of the SRA. Relief of specific performance of a contract is no longer discretionary, after the amendment."

Presumption Of Validity Attaching To Registered Documents

Registered Documents Carry Formidable Presumption Of Genuineness

The Court addressed the defendant's plea that his signatures were obtained on blank papers and that the agreement was a result of fraud. It held that under the Indian Evidence Act and established precedents like Prem Singh v. Birbal, a registered document is prima-facie valid in law. The burden to prove fraud or fabrication lies heavily on the party making such an assertion.

The bench noted that the defendant was a seasoned businessman who had previously handled multiple sale deeds for himself and his family. The court found it improbable that such an individual would sign documents in a Sub-Registrar's office without understanding their nature. The presence of digital photographs and thumbprints further fortified the document's sanctity.

"It is trite law that a registered document carries a presumption of valid execution and genuineness unless rebutted by cogent evidence. A Court must not lightly or casually declare a registered instrument as a 'sham'."

Readiness And Willingness Is A Matter Of Substance, Not Form

Strict Adherence To CPC Forms Not Required For Readiness And Willingness

Regarding 'readiness and willingness' under Section 16(c), the appellant argued that the plaintiff failed to use the exact phraseology prescribed in Forms 47 and 48 of Appendix A of the CPC. The High Court rejected this technical objection, citing the Supreme Court’s ruling in Sughar Singh v. Hari Singh, which held that the "spirit and substance" of the plea are more important than the "letter and form."

The court observed that the plaintiff had sent multiple legal notices and maintained a bank balance exceeding the required amount, which sufficiently demonstrated his capacity and intention. The bench clarified that it is not necessary for a plaintiff to literally "jingle the coins" or produce ready cash; proving the means to generate the consideration amount is sufficient.

"To insist for mechanical production of the exact words of a statute is to insist for the form rather than essence. Readiness refers to financial capacity and willingness refers to the conduct of the plaintiff."

Hardship Cannot Be Claimed On Mere Price Rise Or Personal Needs

Rise In Property Value Is Not A Ground To Refuse Specific Performance

The defendant argued that the property was his sole residence and its value had risen to ₹2 crores, making the ₹30 lakh agreement inequitable. The court dismissed this, stating that under Section 20 of the Specific Relief Act (post-amendment) and the principles in Parswanath Saha v. Bandhana Modak, a mere rise in price or inadequacy of consideration is not a "hardship" that allows a party to back out of a contract.

The bench noted that the defendant entered the agreement willingly for his business needs. Any subsequent hardship arising from his own "misdeeds" or the normal passage of time cannot be used as a shield against the plaintiff’s rights. The court affirmed that the balance of equity tilts in favor of the purchaser when the execution and part-payment are proved.

The High Court concluded that there was no perversity in the Trial Court's judgment. It affirmed the decree for specific performance, directing the defendant to execute the sale deed within two months. The appeal was dismissed with costs throughout, reinforcing the mandatory nature of contractual obligations in real estate agreements.

Date of Decision: 06 July 2026