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Is Suit For Specific Performance Maintainable Even Without Seeking Declaration That Termination Of Contract Was Invalid?: Supreme Court Answers
The Supreme Court in view of the facts of the case, noted, “… what is clear is that though a plea regarding maintainability of the suit, even if not raised in written statement, may be raised in appeal, particularly when no new facts or evidence is required to address the same, the issue whether a declaratory relief is essential or not would have to be addressed on the facts of each case.”

The Court enunciated that in a case where the contract between the parties confers a right on a party to the contract to unilaterally terminate the contract in certain circumstances, and the contract is terminated exercising that right, a mere suit for specific performance without seeking a declaration that such termination is invalid may not be maintainable.

“This is so, because a doubt /cloud on subsistence of the contract is created which needs to be cleared before grant of a decree enforcing contractual obligations of the parties to the contract”, it added.

The Court further said that 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, and, therefore, the suit for specific performance was maintainable even without seeking a declaration that termination of the contract was invalid in law.

The Court also held that the High Court’s conclusion that Plaintiff had set up a false case of additional payment is unsustainable and, therefore, cannot be a ground to decline discretionary relief of specific performance.

“We are, therefore, of the firm view that this was not a fit case where discretionary relief of specific performance should have been denied. … the High Court erred in law by interfering with the decree of specific performance passed by the first appellate court”, it concluded

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