A. Specific Relief Act, 1963 (47 of 1963), Section 10 -- Suit for Specific performance -- Termination of contract – Effect of -- A contract may give right to the parties, or any one of the parties, to terminate the contract on existence of certain conditions -- In terms thereof, the contract is terminated, a doubt over subsistence of the contract is created and, therefore, without seeking a declaration that termination is bad in law, a decree for specific performance may not be available -- However, where there is no such right conferred on any party to terminate the contract, or the right so conferred is waived, yet the contract is terminated unilaterally, such termination may be taken as a breach of contract by repudiation and the party aggrieved may, by treating the contract as subsisting, sue for specific performance without seeking a declaratory relief qua validity of such termination.

(Para 32)

B. Specific Relief Act, 1963 (47 of 1963), Section 10 -- Suit for specific performance – Termination of contract – Effect of – Declaration that termination of contract was invalid – Requirement of -- By accepting Rs.1,95,000 after expiry of six months, D-1 and D-2, firstly, waived their right, as available to them under the contract, to forfeit the advance consideration/ earnest money,

Secondly, by such acceptance and endorsement on the back of the agreement they treated the contract as subsisting and,

thirdly, by transferring part of the subject matter of the agreement in favour of D-3, even before serving a forfeiture notice, they committed a breach of the contract.

In such circumstances, the plaintiff had an option to treat the contract as subsisting and sue for specific performance more so when termination was a void act, no longer permissible under the varied contract -- Suit for specific performance was maintainable even without seeking a declaration that termination of the contract was invalid in law.

(Para 33)

C. Specific Relief Act, 1963 (47 of 1963), Section 10 – Suit for specific performance -- Evidence on record that the Tehsildar had reported regarding possession of the plaintiff over the suit property though that report was subject to final adjudication in the suit – In such circumstances, merely because plaintiff’s claim that property was in his possession was not accepted, the relief of specific performance cannot be declined, particularly, when the plaintiff had already paid over 90% of the agreed consideration and paid additional amount also as demanded by D-1 and D-2 -- Further, D-3 was a related party of D-1 and D-2 and, therefore, not a bona fide purchaser -- Not a fit case where discretionary relief of specific performance should have been denied – High Court erred in law by interfering with the decree of specific performance passed by the first appellate court -- Judgment and decree(s) of the High Court is/are set aside and that of the first appellate court is/are restored.

(Para 39, 40)