S.22 Specific Relief Act | Refund Of Advance Payment Cannot Be Granted Without Specific Prayer In Plaint : Supreme Court

The Supreme Court clarified that a relief of refund for an 'advance payment' as part of the sale consideration cannot be allowed unless a prayer seeking such a relief was included in the plaint.

The Court said that it would be impermissible for the Court to suo moto grant such a relief if not included in the plaint. The Court asserted that by way of an amendment to the pleadings, which can be sought at any stage of proceedings, the plaintiff can seek an alternative relief of refund as stated under Section 22(2) of the Specific Relief Act, 1963 (“SRA”).

“It is thus a settled position of law that the plaint may be amended at any stage of the proceedings to enable the plaintiff to seek an alternative relief, including that of refund of earnest money, and the courts have been vested with wide judicial discretion to permit such amendments. However, under Section 22 of the 1963 Act, the courts cannot grant such relief suo moto, since the inclusion of the prayer clause remains a sine qua non for the grant of such a relief. In other words, when an “appropriate case” exists for seeking the said relief under this provision, it must be specifically sought either in the original plaint or by way of an amendment.”, the bench comprising Justices JB Pardiwala and R Mahadevan said.

The bench heard the case where the Appellant sought a refund of the advance payment as part of the sale consideration upon forfeiture of the earnest money deposited by him with the seller for the purpose of securing the contract.

The Appellant argued that it was not necessary to make an alternative prayer to seek a refund of the advance payment made to the seller. However, Justice Pardiwala, delivering the judgment, rejected this contention, clarifying that a refund of advance or earnest money cannot be granted unless it is expressly claimed, as required under Section 22 SRA.

The Court further observed that the Appellant failed to utilize the remedy under Section 22(2) SRA, which allows for amendment of the plaint at any stage of the suit to include such a relief.

However, the Court clarified that an express claim for alternative relief is not required when the relief sought is ancillary and naturally flows from a decree of specific performance of an agreement to sell, as clarified in the case of Manickam @ Thandapani vs Vasantha, 2022 LiveLaw (SC) 395.

In Manickam @ Thandapani vs Vasantha, the Court was dealing with the question of whether the executing court could deliver possession in execution of a decree where no specific prayer for possession had been made in a suit for specific performance. Answering in the affirmative, the Court said that since the delivery of possession is a necessary implication flowing from the execution of a decree, a specific prayer would not be required for the delivery of possession.

In view of the above, the Court observed that since the Appellant neither paid the balance sale consideration nor fulfilled the terms of the agreement to sell, a specific prayer for refund of the advance payment was necessary to claim such relief.

Also From Judgment: Forfeiture Of 'Earnest Money' Is Not Penal In Ordinary Sense So As To Apply Section 74 Contract Act : Supreme Court

Case Title: K.R. SURESH VERSUS R. POORNIMA & ORS.

Citation : 2025 LiveLaw (SC) 522

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