The Supreme Court held that a suit for the specific performance of an agreement to sell, filed after its cancellation, is not maintainable unless it includes a prayer for declaratory relief (under Section 34 Specific Relief Act) challenging the validity of the cancellation.
The Court reasoned that declaratory relief challenging the validity of the cancellation was essential when seeking specific performance of the agreement to sell, as the suit could not be sustained without a valid and subsisting agreement.
“this Court is of the opinion that absent a prayer for declaratory relief that termination/cancellation of the agreement is bad in law, a suit for specific performance is not maintainable.”,
“This Court further finds that the seller had admittedly issued a letter dated 7th February 2008 cancelling the Agreement to Sell dated 25th January 2008, prior to the filing of the subject suit on 5th May 2008. Even though the demand drafts enclosed with the letter dated 07th February, 2008 were subsequently encashed in July, 2008 (After Suit's institution), yet this Court is of the view that it was incumbent upon the Respondent No.1-buyer to seek a declaratory relief that the said cancellation is bad in law and not binding on parties for the reason that existence of a valid agreement is sine qua non for the grant of relief of specific performance.”, the court observed.
Reference was drawn to the case of I.S. Sikandar (Dead) By LRs. v. K. Subramani and Others, (2013) 15 SCC 27, where it was held that in the absence of a prayer for declaratory relief that the termination of the agreement is bad in law, the suit for specific performance of that agreement is not maintainable.
“Since in the present case, the seller had issued a letter dated 07th February, 2008 cancelling the agreement to sell prior to the institution of the suit, the same constitutes a jurisdictional fact as till the said cancellation is set aside, the respondent is not entitled to the relief of specific performance.”, the court observed.
Since the trial court in this case didn't consider the issue of the maintainability of the suit, the Court referring to the recent case of R. Kandasamy (Since Dead) & Ors. v. T.R.K. Sarawathy & Anr. said that it would not trim away the powers of the Appellate Courts/High Court to examine whether the jurisdictional fact did exist for grant of relief as claimed, provided no new facts were required to be pleaded and no new evidence led.
In terms of the aforesaid, the Court allowed the appeal holding that the Court below had erred in decreeing the suit for specific performance of agreement to sell despite non-existence of the agreement to sell.
Case Title: SANGITA SINHA VERSUS BHAWANA BHARDWAJ AND ORS.
