Supreme Court clarifies when a plaintiff must seek a declaration before specific performance under the Specific Relief Act, 1963.

WHEN PLAINTIFF MUST SEEK DECLARATION IN SPECIFIC PERFORMANCE SUIT

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Case Overview

Case Name: Annamalai vs. Vasanthi And Others

A Division Bench comprising Justices JB Pardiwala and Justice Manoj Misra of the Supreme Court of India delivered this significant judgment on October 29, 2025 . The dispute arose from an agreement to sell between the appellant (buyer) and the respondent (vendor). Despite having no termination clause, the vendor attempted to terminate the agreement after accepting additional consideration beyond the stipulated contract period . The buyer’s suit for specific performance was dismissed by the trial court for lack of a declaratory relief, prompting an appeal that reached the Supreme Court .

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Key Aspects

Before delving into the legal framework, the Court distinguished between valid termination and wrongful repudiation — a crucial factor determining whether declaratory relief is needed .

• The vendor accepted extra payment six months after the contract period had ended .
• Despite this, the vendor issued a termination notice, lacking any contractual basis .
• The trial court dismissed the suit, holding that a declaration was mandatory .
• The First Appellate Court decreed specific performance, terming the termination wrongful .
• The High Court reversed that finding, but the Supreme Court restored the appellate court’s view in favour of the buyer .

Legal Insights

The Supreme Court’s analysis was grounded in the Specific Relief Act, 1963 and the Indian Contract Act, 1872 providing clarity on when a declaration is necessary before claiming specific performance .

• Section 10 of the Specific Relief Act, 1963 empowers courts to enforce specific performance of a contract when monetary compensation is inadequate .
• Section 34 of the Specific Relief Act, 1963 allows a person to seek a declaration of rights when a “cloud” or doubt exists regarding legal status — in this context, the validity of the contract after termination .
• The Court held that when a contract expressly provides a right to terminate and one party exercises that right, it creates a prima facie legal doubt over the contract’s subsistence . In such cases, the plaintiff must first seek a declaration invalidating the termination before claiming specific performance .
• However, when a termination is without contractual authority or the right to terminate has been waived by conduct, such termination is void and amounts to wrongful repudiation . In such circumstances, the plaintiff can directly seek specific performance without seeking declaratory relief .
• Referring to Sections 62 and 63 of the Indian Contract Act, 1872, the Court held that acceptance of additional consideration after expiry of the contract signifies waiver or novation, meaning the contract remains in force .

Court’s Verdict

The Supreme Court ruled that the vendor’s act amounted to wrongful repudiation, not a valid termination . By accepting additional consideration after the lapse of the contract period, the vendor waived any termination rights and affirmed the subsistence of the agreement . Therefore, the buyer was entitled to directly seek specific performance under Section 10 of the Specific Relief Act, 1963 without seeking a declaration under Section 34 . The appeal was allowed, restoring the decree of the First Appellate Court .

Source-Supreme Court of India 

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