Sandeep Jain upholds the mandatory nature of specific performance following the 2018 amendment to the Specific Relief Act in FIRST APPEAL No. – 388 of 2025. of the Allahabad High Court has delivered a judgment in FIRST APPEAL No. – 388 of 2025, clarifying the mandatory nature of specific performance following the 2018 amendment to the Specific Relief Act.
The ruling, issued on 06.07.2026, upheld a trial court decree in favour of Ganesh Prasad, who sought to enforce a 2019 registered agreement to sell a two-storeyed residential building located in village Poore Gulab, District Sant Ravidas Nagar.
Allahabad High Court clarifies specific performance post-2018 amendment
The Allahabad High Court, in a recent judgment delivered by Hon’ble Justice Sandeep Jain on July 6, 2026, has affirmed the critical shift in Indian property law introduced by the 2018 amendment to the Specific Relief Act, 1963. This landmark decision reinforces that specific performance of a contract is no longer a discretionary remedy but a mandatory one, particularly when a registered agreement to sell and the buyer’s continuous readiness and willingness are proven.
The case, identified as First Appeal No. 388 of 2025, involved Tushar Agrawal as the appellant and Ganesh Prasad as the respondent. It revolved around a dispute over a residential property located in Bhadohi, Gyanpur, echoing challenges many individuals face in real estate transactions.
The heart of the dispute: a property in Poore Gulab
The litigation originated from Original Suit No. 9 of 2022, filed by Ganesh Prasad against Tushar Agrawal. Prasad sought judicial enforcement of a registered agreement to sell a two-storeyed building in village Poore Gulab, Pargana Bhadohi, Tehsil Gyanpur, District Sant Ravidas Nagar.
This property, House No. 1, reportedly measures 2184 sq ft (202.973 sq m) and faces Gyanpur Road. The plaintiff’s case stated that Tushar Agrawal, facing financial needs for his business and personal expenses, agreed to sell his lone residential property to Ganesh Prasad for a total consideration of ₹30 lakhs.
The initial agreement and earnest money payment
The agreement stipulated an initial earnest money payment of ₹20 lakhs, with the remaining ₹10 lakhs to be paid upon the execution of the sale deed. A registered agreement to sell was formally executed on December 30, 2019, and subsequently registered at the Sub-Registrar’s office in Gyanpur, Bhadohi.
Ganesh Prasad claimed to have paid the ₹20 lakhs earnest money via cheque No. 223569, drawn on Indian Bank, Branch Lahurabir, Varanasi, on the same day. He asserted regular attempts to contact Agrawal for the finalization of the sale deed, even sending a registered legal notice on September 11, 2021, which Agrawal reportedly received on September 14, 2021.
Accusations of fraud and undervaluation
Tushar Agrawal, however, vehemently denied the plaintiff’s claims in his written statement. He contended that he never entered into an agreement to sell his sole residential house, which also housed his business operations, and he did not have any financial exigency requiring him to sell it.
Agrawal further asserted that the property was significantly undervalued. He claimed its market value was not less than ₹2 crores at the time of the alleged agreement, making the ₹30 lakh consideration entirely implausible. He accused Ganesh Prasad of fraudulently obtaining his signature on the agreement, leveraging their long-standing business relationship, which dated back to 2013.
Trial court findings and the first appeal
The Civil Judge (Senior Division) Bhadohi, Gyanpur, heard the original suit, O.S. No. 9 of 2022, and delivered its judgment and decree on March 11, 2025. The trial court sided with Ganesh Prasad, decreeing the suit for specific performance.
The court found that Agrawal had indeed executed the agreement, received the ₹20 lakhs earnest money, and that Ganesh Prasad consistently demonstrated readiness and willingness to complete the transaction. The court also dismissed Agrawal’s claims of fraud and undervaluation, noting the absence of any formal complaint from Agrawal regarding fraudulent execution or a challenge to the agreement itself.
Issues before the Allahabad High Court
Tushar Agrawal, aggrieved by the trial court’s decision, filed a First Appeal under Section 96 of the Code of Civil Procedure (CPC) with the Allahabad High Court. The appeal presented several key issues for Hon’ble Justice Sandeep Jain to consider:
- Whether Agrawal executed the registered agreement to sell.
- Whether any consideration was paid by Prasad towards the agreement.
- Whether the consideration paid was solely for business transactions.
- Whether the agreement was fraudulently obtained.
- Whether Prasad continuously remained ready and willing to fulfil his part of the agreement.
- Whether specific performance remains discretionary after the 2018 amendment.
The appellant’s counsel, including Shakti Shanker Tiwari, Subhash Chandra Tiwari, and Umesh Chandra Verma, argued that the ₹20 lakhs allegedly paid as earnest money was part of their ongoing silver trading business, not related to the property sale. They highlighted that Agrawal’s bank account did not show an encashment of the cheque for the property sale, suggesting a fraudulent transaction.
Arguments from the respondent
Conversely, counsel for Ganesh Prasad, Ravish Chandra Srivastava, submitted evidence to counter Agrawal’s claims. Prasad presented his original registered agreement to sell, copies of legal notices, postal receipts, his Indian Bank account statement, and a certified copy of the agreement Agrawal made with Maneesh Kumar Jaiswal for the same property, indicating a potential attempt to sell to a third party.
Crucially, the plaintiff presented bank statements confirming the ₹20 lakh cheque was debited from his account on January 3, 2020, and credited to Tushar Agrawal’s savings account. This contradicted Agrawal’s assertion that the money wasn’t encashed or was solely for business. Furthermore, a handwriting expert, Mohd. Shahrukh (PW-3), testified to the authenticity of Agrawal’s signatures on the agreement.
Key legal interpretations and the 2018 amendment
A significant aspect of this judgment concerned the interpretation of Sections 16 and 20 of the Specific Relief Act, especially in light of the 2018 amendment. The amendment fundamentally altered the scope of specific performance, moving it from a discretionary remedy to a mandatory one.
The court reviewed extensive case law, including precedents like Ram Singh vs. Sughar Singh, which was noted to have been set aside by the Apex Court in Sughar Singh vs. Hari Singh (Dead) through LRs. This reflects the evolving legal landscape around specific performance and the increasing emphasis on contractual enforcement. The High Court further noted that once a valid, registered agreement and the plaintiff’s continuous readiness and willingness are established, courts are generally bound to grant specific performance.
This ruling reinforces the significance of registered property documents. It also offers reassurance to buyers that courts will enforce legitimate agreements, provided they can prove their adherence to the contract terms. Indian diaspora can pursue legal cases remotely in 2026 courts, and the clarity from judgments like this provides a more predictable legal framework for property investments.
The verdict: a victory for contractual enforcement
After considering the detailed submissions, oral evidence from Ganesh Prasad (PW-1) and witness Shyamchandra (PW-2), documentary evidence, and the legal framework, Hon’ble Justice Sandeep Jain upheld the trial court’s judgment. The Allahabad High Court found no evidence of fraud or misrepresentation and affirmed that Tushar Agrawal wilfully executed the agreement to sell.
The court also confirmed that the ₹20 lakh earnest money was duly transferred and constituted part of the property transaction, not merely a business dealing. This outcome confirms the binding nature of registered agreements and the High Court’s commitment to upholding contractual obligations in real estate. The court directed Tushar Agrawal to execute and register the sale deed within two months and hand over possession of the property to Ganesh Prasad upon receiving the balance payment of ₹10 lakhs.
This judgment serves as an important precedent, particularly for residential property disputes. It underscoress that defendants can’t easily escape obligations under validly executed and registered agreements by merely claiming undervaluation or business connections, especially when bank records confirm payment. For those engaging in real estate transactions, particularly within areas like Bhadohi, understanding these legal nuances is crucial. The ruling also suggests that while challenges to property agreements remain, the judicial trend strongly favors enforcing clear, registered contracts.
Implications for residential property transactions
This decision has considerable implications for residential property transactions across India. It reinforces the importance of due diligence and accurate documentation for both buyers and sellers. Sellers, particularly, can’t renege on registered agreements based on subsequent claims of higher market value without robust evidence of manipulation or fraud at the time of execution.
| Aspect of Case | Ganesh Prasad’s Position | Tushar Agrawal’s Position |
|---|---|---|
| Agreement to Sell Date | 30.12.2019 (Registered) | Never executed, forged |
| Property Value (Claimed) | ₹30 lakhs (agreed price) | Not less than ₹2 crores |
| Earnest Money Payment | ₹20 lakhs via cheque (Indian Bank) | Never received for property, was for business |
| Readiness and Willingness | Continuously ready, sent legal notices | Plaintiff lacked capacity, not ready |
| Fraud Allegation | No fraud committed | Agreement fraudulently obtained |
Property owners need to be aware that once a registered agreement to sell is in place, especially with an earnest money deposit, the courts will lean towards enforcing that specific contract. This protects buyers who have committed funds and time to a purchase. Conversely, buyers must ensure they maintain clear records of payment and communication, demonstrating their ongoing readiness and willingness to fulfil their contractual obligations.
The ruling further solidifies the contractual nature of property dealings. Discrepancies between agreed-upon prices and perceived market values are unlikely to overturn registered agreements unless concrete evidence of coercion or illegality can be presented. It sends a clear message that legal frameworks are designed to provide stability and confidence in real estate transactions.
Frequently Asked Questions
Is specific performance now mandatory in Indian property disputes?
Yes, following the 2018 amendment to the Specific Relief Act, specific performance is generally considered a mandatory remedy rather than a discretionary one. If a buyer proves a valid registered agreement and their own readiness to pay, courts are now obliged to enforce the contract, subject to limited statutory exceptions.
What constitutes “readiness and willingness” in a property suit?
Readiness and willingness refer to the buyer’s financial capacity to pay the balance amount and their consistent conduct in pursuing the sale. This is typically proven through bank statements, financial records, and the sending of legal notices to the seller demanding the execution of the sale deed.
Can a registered agreement be challenged on grounds of undervaluation?
A seller can allege a property was undervalued, but such claims are difficult to sustain without strong documentary evidence of the market value at the time of the agreement. Courts generally prioritise the price agreed upon in a registered document over later claims that the property was worth significantly more.