The Allahabad High Court has ruled that following the 2018 amendment to the Specific Relief Act, 1963, the grant of specific performance of a contract is no longer a discretionary remedy but a mandatory relief that courts must enforce, subject to statutory exceptions. Justice Sandeep Jain passed this ruling while dismissing a first appeal filed by a seller who challenged a trial court decree directing him to execute a sale deed for his residential-cum-commercial property. Affirming the decree, the High Court held that once a registered agreement and the payment of earnest money are proven, and the buyer demonstrates continuous readiness and willingness, the contract must be specifically enforced.
Background of the Case
The legal battle originated from Original Suit No. 9 of 2022 filed by the plaintiff, Ganesh Prasad, against the defendant, Tushar Agrawal, in the Court of Civil Judge (Senior Division) Bhadohi, Gyanpur. According to the plaintiff, Agrawal was the owner of a two-storeyed building (House No. 1, facing Gyanpur Road, with an area of 2184 square feet or 202.973 square meters, constructed on Arazi No. 1 in village Poore Gulab, District Sant Ravidas Nagar).
Facing urgent financial needs for personal expenses and business expansion, Agrawal approached Prasad to sell the property. The total consideration was agreed at Rs. 30 lakhs, out of which Prasad paid Rs. 20 lakhs as earnest money via an account payee cheque on December 30, 2019. A registered agreement to sell was executed and registered on the same day, with the stipulation that the sale deed would be executed within three years upon the payment of the remaining Rs. 10 lakhs.
Despite repeated personal requests and multiple legal notices—culminating in a final registered notice served on September 14, 2021—Agrawal avoided executing the deed. Discovering that Agrawal was actively negotiating to sell the property to third parties, Prasad filed a suit for specific performance, asserting his continuous readiness and willingness to perform his contractual obligations.
The trial court decreed the suit on March 11, 2025, directing Agrawal to execute the sale deed within two months and hand over possession upon receiving the balance amount of Rs. 10 lakhs. Agrawal subsequently challenged this decision before the High Court under Section 96 of the Civil Procedure Code (CPC).
Arguments of the Parties
Sri Pramod Jain, Senior Counsel for the appellant (Agrawal), contended that the trial court’s decree was unsustainable. He argued that the parties shared a long-standing business relationship since 2013 involving the purchase, refining, and sale of silver, and that Prasad had exploited this relationship to fraudulently execute the agreement to sell. He asserted that the property was Agrawal’s sole residence and shop, valued at over Rs. 2 crores, making a sale of Rs. 30 lakhs highly improbable.
Furthermore, Agrawal claimed that he never received the Rs. 20 lakhs as earnest money, asserting instead that the funds were related to their ongoing silver business transactions. He also argued that Prasad lacked continuous readiness and willingness, highlighting that Prasad initially filed the suit with deficient court fees. Citing precedents such as Ram Singh v. Sughar Singh, Sitaram v. Radheshyam, and C.S. Venkatesh v. A.S.C. Murthy, the appellant argued that specific performance is an equitable, discretionary remedy and should be refused under Section 20 of the Act.
In response, Sri Vijay Kumar Ojha, counsel for the respondent (Prasad), argued that a registered agreement to sell carries a formidable legal presumption of validity. He established that the Rs. 20 lakhs was paid from Prasad’s individual savings bank account and credited to Agrawal’s account, whereas their business dealings were strictly conducted through firm accounts and logged on the GST portal. Prasad’s counsel also highlighted that Agrawal had previously undertaken several property transactions and was well aware of the registration processes.
To disprove the Rs. 2 crore valuation claim, the respondent submitted a certified copy of a subsequent unregistered agreement to sell executed by Agrawal in 2021 to sell the same property to one Manish Kumar Jaiswal for Rs. 50 lakhs. Prasad’s counsel maintained that Prasad’s bank records demonstrated a continuous balance of over Rs. 10 lakhs, proving his financial capacity. Finally, he argued that post-2018, specific performance is mandatory.
Court’s Analysis
The High Court examined several key issues, including the valid execution of the agreement, the payment of earnest money, the nature of the business transactions, and Prasad’s continuous readiness and willingness.
Addressing the execution of the registered agreement and Agrawal’s claims of fraud, the Court observed that a registered document carries a high degree of sanctity and a presumption of valid execution. Referring to the Supreme Court decisions in Prem Singh v. Birbal, Rattan Singh v. Nirmal Gill, and Sarafat Ali v. Deputy Director of Consolidation Haridwar, the Court cited the settled position of law: “It is a settled position of law that a registered Sale Deed carries with it a formidable presumption of validity and genuineness. Registration is not a mere procedural formality but a solemn act that imparts high degree of sanctity to the document.”
The Court pointed out that Agrawal failed to establish fraud, did not initiate any suit for the cancellation of the agreement, and chose not to examine his own attesting witness, Arun Kumar Jaiswal, to support his version.
On the transaction of Rs. 20 lakhs, the Court analyzed the bank accounts and GST invoices. It found a clear distinction between the business accounts of their respective firms and Prasad’s personal savings account from which the earnest money was debited. The Court rejected Agrawal’s claim that the Rs. 20 lakhs was paid towards silver refining labor charges, noting that Agrawal did not offer any documentation, such as income tax or GST returns, to prove his claim.
Regarding Prasad’s readiness and willingness under Section 16(c) of the Specific Relief Act, the Court dismissed the appellant’s highly technical objections regarding the format of the pleadings. It cited the Supreme Court’s three-judge bench ruling in Syed Dastagir v. T.R. Gopalakrishna Setty: “So the compliance of ‘ Readiness and willingness’ has to be in spirit and substance and not in letter and form. So to insist for mechanical production of the exact words of an statute is to insist for the form rather than essence. So absence of form cannot dissolve an essence if already pleaded.”
The Court noted that Prasad had consistently maintained a savings account balance in excess of Rs. 10 lakhs, satisfying the requirement of financial capacity. It also held that the temporary deficiency in court fees at the time of filing the suit, which was quickly corrected, did not negate his readiness. The Court observed that the Ram Singh precedent relied upon by the appellant was no longer good law, having been set aside by the Supreme Court in Sughar Singh v. Hari Singh.
Addressing the discretionary power of the courts, the Court observed that because the agreement was executed in 2019, the amended provisions of the Specific Relief Act, which took effect on October 1, 2018, were fully applicable. Citing the Supreme Court ruling in B. Santoshamma v. D. Sarala, the Court emphasized: “After the amendment of Section 10 of the SRA, the words ‘specific performance of any contract may, in the discretion of the court, be enforced’ have been substituted with the words ‘specific performance of a contract shall be enforced subject to ‘. The court is, now obliged to enforce the specific performance of a contract, subject to the provisions of sub-section (2) of Section 11, Section 14 and Section 16 of the SRA. Relief of specific performance of a contract is no longer discretionary, after the amendment.”
Final Decision
The High Court concluded that Prasad had successfully proven the execution of the registered agreement, the payment of Rs. 20 lakhs as earnest money, and his continuous readiness and willingness to perform the contract. The Court rejected Agrawal’s plea of hardship, stating that any hardship arose from the seller’s own deeds, as he entered the agreement fully aware of the property’s residential and commercial use.
Finding no perversity in the trial court’s judgment, the High Court dismissed the appeal with costs throughout and affirmed the trial court’s decree. The appellant-defendant was directed to execute the sale deed of the property within two months in favor of the plaintiff-respondent after receiving the remaining Rs. 10 lakhs. If the appellant fails to comply, the respondent is entitled to have the sale deed executed through the Court by depositing the balance consideration.
Case Details:
Case Title: Tushar Agrawal vs. Ganesh Prasad
Case No.: FIRST APPEAL No.388 of 2025
Bench: Justice Sandeep Jain
Date: 06.07.2026
