Vijay Prabhu vs. S.T. Lajapathie & Ors., 2025 LiveLaw SC 59

The Supreme Court of India, in Vijay Prabhu vs. S.T. Lajapathie & Ors. [2025 LiveLaw SC 59; decided January 8, 2025], clarified the applicability of Section 12(3) of the Specific Relief Act, 1963, concerning claims of part performance of contracts and the conditions under which such relief can be granted.

Facts and Background
The dispute arose from an agreement to sell a property for Rs. 84 lakhs, where the plaintiff, Vijay Prabhu, paid Rs. 20 lakhs as advance but failed to pay the remaining Rs. 64 lakhs, which constituted a substantial part of the contract. Vijay Prabhu filed a suit seeking specific performance of the contract or, alternatively, refund of the advance with damages. The trial court dismissed the suit for specific performance, holding that the plaintiff was not ready and willing to perform his part of the contract. The Madras High Court upheld this decision.

The plaintiff then appealed to the Supreme Court, invoking Section 12(3) of the Specific Relief Act to claim partial performance of the contract.

Legal Issues
Whether partial performance under Section 12(3) of the Specific Relief Act can be claimed when a substantial part of the contract remains unperformed.

Whether the plaintiff was ready and willing to perform his obligations under the contract.

The necessity of relinquishing claims for the unperformed part of the contract to claim relief under Section 12(3).

Supreme Court’s Findings
The Supreme Court held that part performance of a contract cannot be claimed when the unperformed portion is substantial, non-segregable, and the plaintiff neither relinquishes claims for the unperformed part nor demonstrates readiness to perform the contract. The Court emphasized that readiness and willingness to perform the contract are essential prerequisites for specific performance.

The Court observed that Section 12(3) relief is discretionary and can only be granted if the party seeking it is not in default and has abandoned claims for the unperformed portion. Since the plaintiff failed to pay the substantial balance amount and did not relinquish claims for the unperformed part, he was not entitled to invoke Section 12(3).

The Supreme Court dismissed the appeal, affirming the lower courts’ decisions, and ordered refund of the Rs. 20 lakh advance with interest.

Conclusion
The judgment clarifies that:

Specific performance for part of a contract under Section 12(3) is allowed only if the unperformed part is insubstantial or segregable and the claimant relinquishes claims for the unperformed part.

Readiness and willingness to perform the contract fully or as agreed are fundamental.

Courts have discretion in granting partial relief but must ensure fairness and adherence to statutory requirements.