Relinquishment of Claims Under S.12 (3) For Part Performance Can Be Made At Any Stage Of Litigation: Supreme Court
The Supreme Court of India recently clarified a significant legal principle under Section 12(3) of the Specific Relief Act, 1963, concerning the doctrine of part performance in contractual disputes. It observed that a party seeking enforcement of a contract's part performance may invoke the provision at any stage of litigation, including at the appellate stage. The Court emphasized that this right extends to the relinquishment of claims for the unperformed portion of the contract, as well as waiving all rights to compensation regarding the unfulfilled obligations.
“we may only say that the relinquishment of claim to further performance of the remaining part of the contract and all rights to compensation can be made at any stage of litigation. This was held in Kalyanpur Lime Works v. State of Bihar reported in AIR 1954 SC 165. This Court referred with approval to a Division Bench decision of the Lahore High Court in Waryam Singh v. Gopi Chand, (AIR 1930 Lah 34).”, the Court said.
This observation underscores the flexibility inherent in Section 12(3), which aims to balance equity and justice when full performance of a contract becomes impractical. By allowing litigants to modify their claims or pleas even at an advanced stage of proceedings, the Court recognized the importance of accommodating practical realities that may emerge during litigation. This interpretation provides a safeguard for parties who might otherwise be unjustly penalized for circumstances beyond their control, thus reinforcing the remedial nature of the Specific Relief Act.
As per Section 12(3) of the Specific Relief Act, to claim part performance of the contract, the plaintiff either needs to relinquish the claims associated with the unperformed part of the contract or express readiness and willingness to perform the contract by making full payment of the agreed consideration for the contract.
The Supreme Court clarified that relinquishing the claim to further performance can be made at any stage of the litigation.
“Thus, the position of law is that relinquishment could be made at any stage of the litigation including the appellate stage. The claim of the plaintiff appellant for grant of benefit under Section 12(3) of the Act was, therefore, rightly not rejected by the High Court on the simple ground that it was not made at the trial stage and had been made for the first time at the appellate stage. In our view the claim can also not be rejected on the short ground that it was not incorporated in the plaint or was not set forth in writing before the Trial Court.”, the Court observed.
“We are of the view that no error not to speak of any error of law could be said to have been committed by the High Court in passing the impugned order.”, the court held.
In conclusion, the Supreme Court's ruling underscores the flexibility afforded under Section 12(3) of the Specific Relief Act, 1963, allowing the relinquishment of claims for the unperformed part of a contract at any stage of litigation, including the appellate stage. By referencing precedents like Kalyanpur Lime Works v. State of Bihar and Waryam Singh v. Gopi Chand, the Court clarified that such claims need not be raised exclusively at the trial stage or incorporated into the plaint. This decision reaffirms the equitable nature of the Specific Relief Act, ensuring fairness and practical resolution in contractual disputes while accommodating procedural realities.
Author: Robin Singh, Associate with Pratap & Co.