LexK.S. MANJUNATH AND OTHERS versus MOORASAVIRAPPA @ MUTTANNA CHENNAPPA BATIL, SINCE DECEASED BY HIS LRS AND OTHER
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[2025] 12 S.C.R. 43 : 2025 INSC 1298 K.S. Manjunath and Others v. Moorasavirappa @ Muttanna Chennappa Batil, Since Deceased by His Lrs and Other (Civil Appeal No(s). 13507-13508 of 2025) 10 November 2025 [J.B. Pardiwala* and R. Mahadevan, JJ.] Issue for Consideration Whether the High Court committed any error in passing the impugned judgment whereby it allowed the appeals filed by the vendees and set aside the decree passed by the Trial Court, while granting the relief of specific performance of Agreement to Sell executed by the Original Vendors in favour of the Original Vendees and holding the Appellants-Subsequent Purchasers not to be the bona fide purchasers of the subject land for value without notice. Headnotes† Specific Relief Act, 1963 – Unilateral termination of the agreement to sell by one party – Impermissible, except where the agreement itself is determinable in nature in terms of s.14 – Original vendors executed an unregistered Agreement to Sell (ATS) in favour of the original vendees in respect of 354 Acres of the Subject Land – However, later, they sent a Notice of Termination to the original vendees thereby terminating the ATS – Subsequently, original vendors sold the subject land to the subsequent purchasers – Original vendees filed suit inter alia seeking specific performance of the ATS against both the original vendors and the subsequent purchasers – Trial Court held that the original vendees failed to make good their case for grant of relief of specific performance – In appeals by the original vendees, High Court decreed the suit for specific performance in their favour – Challenge to: Held: Unilateral termination of the agreement to sell by one party is impermissible in law except in cases where the agreement itself is determinable in nature in terms of s.14 – If such unilateral termination of a non-determinable agreement to sell is permitted * Author 44 [2025] 12 S.C.R. Supreme Court Reports as a defence, then virtually every suit for specific performance can be frustrated by the defendant by placing an unfair burden on the plaintiff, who despite performing his part of the obligations and having showcased readiness and willingness, would require to also seek a separate declaration that the termination was bad in law – In such cases, the burden cannot be casted upon the plaintiff to challenge the alleged termination of agreement – If a contract itself gives no right to unilaterally terminate the contract, or such right has been waived, and a party still terminates the contract unilaterally then that termination would amount to a breach by repudiation, and the non-terminating party can directly seek specific performance without first seeking a declaration – In the event it is found that the termination of agreement to sell by the defendant was not valid, then such an agreement to sell will remain subsisting and executable – In the present case, ATS was devoid of any clause enabling termination for convenience or otherwise empowering either party to terminate unilaterally – ATS being non-determinable in nature, no unilateral expression of termination could have lawfully extinguished the obligations undertaken thereunder – Neither of the grounds assigned in the notice of termination constituted a valid basis for terminating the ATS – Grounds cited in the notice of termination, namely, the subsistence of a status quo order and the death of one of the original vendors cannot be said to be based on any default or breach by the original vendees – Original vendees performed their part by paying a substantial amount and were also ready and willing to perform the terms of ATS – Termination of ATS vide notice of termination was unilateral and also not bona fide – Termination was invalid – ATS continues to remain alive, subsisting, and executable – Once the alleged termination of agreement in question is found to be not bona fide and being done in a unilateral manner, no declaration challenging the alleged termination is required. [Paras 43, 54, 55, 61, 66] Specific Relief Act, 1963 – s.19(b) – Requisites to claim protection under – Bona fides of the subsequent purchasers in purchasing the subject land – If can claim protection/s.19(b): Held: To claim protection u/s.19(b), the purchaser must show three things: (a) purchase for value, (b) payment in good faith, and (c) absence of notice of the earlier contract – Subsequent purchasers cannot take
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