“The material questions, which are required to be gone into for grant of the relief of specific performance, are first, whether there exists a valid and concluded contract between the parties for sale/purchase of the suit property; second, whether the plaintiff has been ready and willing to perform his part of contract and whether he is still ready and willing to perform his part as mentioned in the contract; third, whether the plaintiff has, in fact, performed his part of the contract and, if so, how and to what extent and in what manner he has performed and whether such performance was in conformity with the terms of the contract; fourth, whether it will be equitable to grant the relief of specific performance to the plaintiff against the defendant in relation to suit property or it will cause any kind of hardship to the defendant and, if so, how and in what manner and the extent if such relief is eventually granted to the plaintiff; and lastly, whether the plaintiff is entitled for grant of any other alternative relief, namely, refund of earnest money etc. and, if so, on what grounds. The aforementioned questions are part of statutory requirements [Sections 16(c), 20, 21, 22, 23 of The Specific Relief Act, 1963]. These requirements have to be properly pleaded by the parties in their respective pleadings and proved with the aid of evidence in accordance with law. It is only then Court is entitled to exercise its discretion and accordingly grant or refuse the relief of specific performance depending upon the case made out by the parties on facts.“

 – Hon’ble Justice Abhay Manohar Sapre, Kamal Kumar v. Premlata Joshi, [Civil Appeal No. 4453 of 2009].

A suit for specific performance cannot be dismissed on the sole ground of delay or laches. Mere escalation of prices of real estate properties per se is no ground to deny the relief of specific performance. It is also well settled, it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled, Court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing the decree of specific performance.

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Section 55 of The Indian Contract, 1872 stipulates, aftermath in case of failure to perform contractual obligations at fixed time.

Citadel Fine Pharmaceuticals v. Ramaniyam Real Estates Private Ltd.,(2011) 9 SCC 147 and Saradamani Kandappan v. S. Rajalakshmi, (2011) 12 SCC 18 held, defense under Section 55 is valid against anyone who is seeking a relief of specific performance.

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The litmus test appears to be, unless a plaintiff specifically seeks refund of earnest money at the time of filing of the suit or by way of amendment, no such relief can be granted. It is difficult to accept, Courts would suo ­moto grant refund of earnest money irrespective of whether Section 22(2) of The Specific Relief Act of 1963 is to be construed directory or mandatory.

– Hon’ble Justice Surya Kant, Desh Raj v. Rohtash Singh, [Civil Appeal No. 921 of 2022] decided on 14.12.2022.