Suit For Specific Performance Not Maintainable Without Prayer To Set Aside Termination Of Agreement: Madras High Court

"Where an agreement has been terminated, a suit for specific performance, in the absence of a prayer for declaration that the termination is invalid, is not maintainable," Madras High Court, in a significant ruling, held that a suit for bare specific performance is not maintainable if the plaintiff fails to seek a declaratory relief challenging the termination of the sale agreement.

A bench of Dr. Justice A.D. Maria Clete observed that "where an agreement has been terminated, a suit for specific performance, in the absence of a prayer for declaration that the termination is invalid, is not maintainable," while dismissing a suit where the buyer had suppressed material facts.

The dispute arose from a sale agreement executed in October 2006, under which the plaintiff agreed to purchase a property from the first defendant. After the plaintiff allegedly failed to pay the balance consideration within the stipulated three-month period, the defendant terminated the agreement and forfeited the advance amount. The Trial Court decreed the plaintiff's subsequent suit for specific performance, prompting the defendant to prefer the present appeal before the High Court.

The primary question before the court was whether a suit for specific performance is maintainable without challenging the valid termination of the underlying agreement. The court was also called upon to determine if the plaintiff had proved continuous readiness and willingness under Section 16(c) of the Specific Relief Act, 1963.

Suppression Of Prior Agreement Disentitles Equitable Relief

The High Court noted that the plaintiff had deliberately concealed a previous sale agreement entered into between the first defendant and the plaintiff's husband. The court observed that the advance amount paid under the earlier transaction was merely carried forward to the current agreement. Emphasizing the necessity of clean hands, the bench noted that in the absence of necessary pleadings, the plaintiff could not rely on oral evidence to portray the current agreement as a continuation of the earlier one.

Declaratory Relief Mandatory Upon Termination

Relying on the Supreme Court's precedent in I.S. Sikandar v. K. Subramani, the bench underscored that a buyer cannot simply ignore a termination notice while seeking specific performance. The court noted that the defendant had formally terminated the agreement via a notice in January 2007. Since the plaintiff did not seek any declaratory relief to invalidate this termination, the court categorically ruled against the maintainability of the suit.

"The present suit, being one for bare specific performance, is legally not maintainable."

Time Deemed The Essence Of Contract

Examining the stipulations in the contract, the court held that the explicit three-month period for completion was binding. The bench reasoned that the backdrop of the earlier failed transaction gave considerable significance to this strict timeframe. Because the plaintiff took no concrete or effective steps to perform her part before the termination notice was issued, the court concluded that the parties clearly intended time to be the essence of the contract.

"Specific performance is an equitable and discretionary relief. In the case on hand, the plaintiff has suppressed material facts, failed to establish continuous readiness and willingness, and approached the Court without seeking the necessary relief."

Failure To Prove Continuous Readiness And Willingness The court rejected the plaintiff's attempt to blame the defendant for the delay, observing that the title documents had already been verified during the prior transaction. Assessing compliance with Section 16(c) of the Specific Relief Act, 1963, the bench pointed out the plaintiff's silence during the contractual period and the lack of satisfactory proof regarding her financial capacity. The court stated that such conduct clearly indicated a failure to establish continuous readiness and willingness to complete the sale.

Ultimately, the Madras High Court set aside the Trial Court's decree, ruling that the plaintiff's suppression of facts and failure to seek declaratory relief proved fatal to her case. The appeal was allowed, and the suit for specific performance was formally dismissed without any order as to costs.

Date of Decision: 01 April 2026