Section 12(3) Specific Relief Act | Waiver of Partial Performance Permissible at Any Stage Without Prejudice: Bombay HC (Nagpur Bench)

The Bombay High Court's judgment in Smt. Nirmalabai v. Hariom Shahu clarifies a critical procedural aspect of the Specific Relief Act, 1963: a plaintiff may relinquish rights under Section 12(3) at any stage of litigation, including during appeal, provided no prejudice is caused to the defendants. The Court upheld a decree for specific performance despite the plaintiff’s belated waiver, reinforcing that procedural flexibility can balance equities in contract enforcement.

Background & Facts

The Dispute

The case arises from an agreement of sale dated 12.03.2004 for a property in Nagpur (Plot Nos. 70 and 71, Khasra No. 54/1, total area ~3,500 sq. ft.) between the plaintiff (respondent) and six defendants (appellants). The total consideration was Rs. 6,31,000, with Rs. 1,25,000 paid on the agreement date and another Rs. 1,25,000 on 01.05.2004. The agreement required the defendants to:

• Mutate their names in the City Survey record and Nagpur Municipal Corporation records,
• Issue a written intimation to the plaintiff about the mutation,
• Execute the sale deed within one month of such intimation.

Crucially, defendant no. 2, a co-owner, did not sign the agreement, rendering it unenforceable against her share.

Key Facts

• Agreement terms: Rs. 6,31,000 total consideration; Rs. 2,50,000 paid upfront; balance payable on sale deed execution.
• Mutation entry: Recorded in defendants’ names on 03.02.2006, but no intimation was sent to the plaintiff.
• Notice for performance: Plaintiff issued a notice on 23.08.2006 demanding specific performance.
• Suit filing: Plaintiff filed Special Civil Suit No. 956/2006 on 07.10.2006 for specific performance.
• Defendant no. 6’s death: Died in April 2008; legal representative (a minor) was represented by a Guardian ad Litem.
• Written statements: Filed by defendant nos. 1, 3, 5, and 6 (and later, the minor’s guardian). Defendant nos. 2 and 4 did not file written statements.

Procedural History

• 08.03.2013: Trial Court dismissed the suit for specific performance, holding the agreement unenforceable due to defendant no. 2’s non-signature. It granted a decree for refund of Rs. 2,50,000 with interest, citing the plaintiff’s lack of proactive steps to urge mutation and delay in prosecuting the suit (affidavit in lieu of examination-in-chief filed 3.5 years after issues were framed).
• 16.06.2016: First Appellate Court (District Judge-8, Nagpur) reversed the Trial Court’s decree, granting specific performance against defendant nos. 1 and 3 - 6 under Section 12(3) of the Specific Relief Act, holding that the defendants’ failure to inform the plaintiff of the mutation absolved the plaintiff of proving readiness and willingness.
• 22.07.2025: High Court framed two substantial questions of law in the appeal; later added a third question on Section 12(3).
• 22.05.2026: High Court delivered the present judgment, remanding the case to the First Appellate Court for fresh adjudication on readiness and willingness.

Relief Sought

The appellants sought:

1. Quashing of the First Appellate Court’s decree dated 16.06.2016,
2. Restoration of the Trial Court’s decree for refund,
3. Rejection of the plaintiff’s claim for specific performance due to non-compliance with Section 12(3).

The plaintiff, in turn, filed an affidavit during the appeal relinquishing his claim for performance/compensation against defendant no. 2’s share, without seeking a proportionate reduction in consideration.

The Legal Issue

The appeal raised three substantial questions of law:

1. Whether the First Appellate Court followed the principles laid down in Santosh Hajari v. Purushottam Tiwari [(2001) 3 SCC 179] while setting aside the Trial Court’s finding on the plaintiff’s readiness and willingness?
2. Whether the defendants’ failure to inform the plaintiff in writing about the mutation entry absolves the plaintiff of proving continuous readiness and willingness?
3. Whether the First Appellate Court erred in granting specific performance for the undivided shares of defendant nos. 1 and 3 - 6 in the absence of a statement by the plaintiff relinquishing rights under Section 12(3) of the Specific Relief Act?

Arguments Presented

For the Appellants/Defendants

• Section 12(3) compliance: The plaintiff failed to plead or prove relinquishment of rights for the non-performable part of the agreement (defendant no. 2’s share). A general statement of readiness is insufficient; the plaintiff must specifically waive claims for performance/compensation for the unenforceable part.
• Belated waiver: The affidavit relinquishing rights was filed only during the appeal, causing prejudice to the defendants. Such a statement must be incorporated in the plaint or an application under Section 12(3).
• Readiness and willingness: The plaintiff did not take proactive steps to urge mutation or prosecute the suit diligently (affidavit filed 3.5 years after issues were framed).
• Precedents relied upon:
  • Surinder Singh v. Kapoor Singh [(2005) 5 SCC 142]: Section 12(3) requires a positive statement relinquishing rights for the unenforceable part.
  • Hajira v. Anto [2018 SCC OnLine Ker 906]: A pleading or application is necessary to satisfy Section 12(3).

For the Respondent/Plaintiff

• Section 12(3) inapplicability: The agreement is complete with respect to the shares of defendant nos. 1 and 3 - 6, who signed it. Section 12(3) does not apply where the contract is enforceable against some parties.
• Waiver at any stage: A statement relinquishing rights under Section 12(3) can be made at any stage, including during appeal, if no prejudice is caused. The affidavit filed during the appeal suffices.
• Defendants’ breach: The defendants failed to inform the plaintiff about the mutation, absolving the plaintiff of proving readiness and willingness.
• Precedents relied upon:
  • Kartar Singh v. Harjinder Singh [AIR 1990 SC 854]: Section 12(3) is not attracted if the agreement is enforceable against some parties.
  • Surinder Singh v. Kapoor Singh [(2005) 5 SCC 142]: Section 12(3) is a beneficial provision; performance should not be denied merely because some parties cannot honour the agreement.

The Court's Analysis

Interpretation of Section 12(3) of the Specific Relief Act

The Court examined Section 12(3), which permits specific performance of a part of a contract if the plaintiff:

1. Relinquishes his claim for performance/compensation for the non-performable part, and
2. Pays or agrees to pay the consideration reduced by the non-performable part.

The Court held that:

• Waiver can be made at any stage, including during appeal, unless prejudice is caused to the defendants.
• The affidavit filed by the plaintiff during the appeal sufficed, as it clearly relinquished claims for defendant no. 2’s share without seeking proportionate reduction in consideration.
• The Kerala High Court’s judgment in Hajira v. Anto (requiring amendment of plaint) was overruled in light of the Supreme Court’s ruling in Surinder Singh, which accepted a statement made across the bar during appeal.

"The Hon'ble Supreme Court has held that the statement as contemplated under Section 12(3) of the S.R. Act can be made at any stage for the first time including before the Hon'ble Supreme Court unless there is a prior statement to the contrary view."

Readiness and Willingness: Trial Court vs. First Appellate Court

The Court critiqued the First Appellate Court’s superficial treatment of readiness and willingness:

• The Trial Court had two valid reasons for denying specific performance:
  1. The plaintiff did not proactively follow up with the defendants for mutation,
  2. The plaintiff delayed prosecution (affidavit filed 3.5 years after issues were framed).
• The First Appellate Court merely held that the defendants’ failure to inform the plaintiff about mutation absolved the plaintiff of proving readiness, without addressing the Trial Court’s findings.
• The Court relied on Supreme Court precedents (Man Kaur v. Hartar Singh [(2010) 10 SCC 512] and N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao [(1995) 5 SCC 115]) to hold that even if the defendant breaches the agreement, the plaintiff must prove continuous readiness and willingness.

"The learned First Appellate Court has failed to perform its duties as the Court exercising appellate jurisdiction under Section 96 of the C.P.C. properly, particularly in view of the fact that it was reversing judgment passed by the learned Trial Court."

Balancing Equities: Delay and Additional Consideration

The Court noted the 22-year delay since the agreement and 20-year delay since the suit filing. It suggested that if the First Appellate Court grants specific performance, it should consider directing payment of additional consideration to balance the equities.

The Verdict

The appeal was partly allowed with the following directions:

1. The judgment and decree dated 16.06.2016 passed by the District Judge-8, Nagpur in Regular Civil Appeal No. 167/2013 was quashed and set aside.
2. The appeal was remanded to the First Appellate Court for fresh adjudication on the issue of readiness and willingness.
3. The parties were directed to appear before the First Appellate Court on 22.06.2026 without requiring a separate notice.
4. Court fees were ordered to be refunded to the appellants.
5. Costs were directed to be borne by the parties themselves.

The Court clarified that it had not expressed any opinion on the merits of readiness and willingness, and the observations on balancing equities were suggestive only.

What This Means For Similar Cases

Waiver Under Section 12(3) Can Be Made at Any Stage

• Practitioners can now argue that a statement relinquishing rights under Section 12(3) can be made even during appeal, provided:
  • The statement is clear (e.g., affidavit relinquishing claims for non-performable part),
  • No prejudice is caused to the defendants,
  • The plaintiff does not seek proportionate reduction in consideration.
• Precedent shift: The judgment overrules stricter interpretations (e.g., Hajira v. Anto) requiring amendment of plaint, aligning with the Supreme Court’s flexible approach in Surinder Singh.

Readiness and Willingness: A Strict Standard

• Plaintiffs must prove continuous readiness and willingness, even if the defendant breaches the agreement.
• Delays in prosecution (e.g., filing affidavits years after issues are framed) can disentitle plaintiffs from discretionary relief.
• Appellate Courts must engage with Trial Court findings before reversing them, especially in specific performance cases where equities are delicate.

Balancing Equities in Long-Delayed Cases

• Courts may direct additional consideration to compensate defendants for prolonged litigation delays.
• Practitioners should argue for equitable adjustments where specific performance is granted after decades of delay to prevent unjust enrichment of the plaintiff.

Key Takeaways for Practitioners

• For plaintiffs:
  • File Section 12(3) waivers early (ideally in the plaint), but belated waivers may still be accepted if no prejudice is shown.
  • Prosecute suits diligently; delays can defeat claims for specific performance.
  • Request equitable adjustments (e.g., additional consideration) if specific performance is granted after long delays.
• For defendants:
  • Challenge belated waivers on grounds of prejudice (e.g., inability to contest the waiver’s validity).
  • Highlight plaintiff’s delays in prosecuting the suit to oppose specific performance.
  • Argue for additional compensation if specific performance is granted despite delays.