Kammana Sambamurthy v. Kalipatnapu Atchutamma

In this significant precedent reconciling property rights of co-owners with the law of specific performance, Justice Asok Kumar Ganguly authoritatively interpreted Section 12(3) of the Specific Relief Act, 1963. The Supreme Court settled that where a vendor enters into an agreement to sell an entire residential house, representing himself as the sole owner, but it is later established that the property was jointly owned with his wife or co-owners who did not sign the contract, the entire agreement does not become void. The purchaser has an absolute statutory right under Section 12(3) to seek specific performance of the vendor's undivided interest (such as a 50% share), provided the purchaser pays the agreed consideration and formally relinquishes all claims to the performance of the remaining half and all rights to damages. Setting aside the High Court's dismissal, the Court decreed specific performance of the vendor's undivided half share.

• Specific Performance of Part of Contract: Interpreted Section 12(3) Specific Relief Act in co-ownership and undivided property sales.
• Protection of Bona Fide Purchasers: Prevents dishonest vendors from defeating contracts by setting up non-consenting co-owners.
• Purchaser's Statutory Option: Relinquishment of remaining part and damages triggers mandatory decree for the vendor's actual share.
• Transfer of Undivided Share Valid: Section 44 Transfer of Property Act recognizes the right of a co-owner to transfer his undivided interest.
• Partition Suit as Consequential Remedy: Purchaser who obtains a decree for an undivided share can file a suit for partition and separate possession.

The vendor Kalipatnapu Subbarao entered into a registered agreement of sale in 1982 to sell a residential house in Srikakulam, Andhra Pradesh to appellant Kammana Sambamurthy for Rs. 45,000/-.

Subbarao received Rs. 5,000/- as advance and promised to execute the sale deed within three months.

Subsequently, Subbarao failed to execute the deed, claiming that the property was jointly owned by him and his wife Atchutamma, and that she refused to sell her half share.

The purchaser filed a suit for specific performance, pleading in the alternative that if the wife's share could not be sold, he was ready to purchase Subbarao's half share under Section 12(3) of the Specific Relief Act.

The trial court decreed specific performance of Subbarao's half share upon payment of proportionate consideration. The High Court of Andhra Pradesh reversed, holding that the contract was indivisible.

The purchaser appealed to the Supreme Court.

Section 12(3) of the Specific Relief Act, 1963 is an exception to the general rule embodied in Section 12(1) that the court shall not direct the specific performance of a part of a contract. Under Section 12(3), where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed forms a considerable part of the whole, the court may, at the suit of the purchaser, direct the party in default to perform specifically so much of his part of the contract as he can perform. The only condition is that the purchaser must pay or have paid the agreed consideration, and must relinquish all claims to the performance of the remaining part of the contract and all right to compensation for the deficiency or damage. In the present case, the husband agreed to sell the entire house representing it to be his. Even if the wife owned an undivided half share, the husband was undoubtedly the owner of the other half. The purchaser explicitly invoked Section 12(3) and offered to pay the consideration while relinquishing claims against the wife's share. The High Court fell in error in holding that the contract was indivisible. The decree of the trial court granting specific performance of the husband's half share is restored.

• Surinder Singh v. Kapoor Singh (2005) 5 SCC 142: Precedent on co-ownership specific performance harmonized in Kammana Sambamurthy.
• Rachakonda Narayana v. Ponthala Parvathamma (2001) 8 SCC 173: Earlier authority on Section 12(3) applied in Kammana Sambamurthy.
• B. Santoshamma v. D. Sarala (2020) 19 SCC 80: Applied Kammana Sambamurthy to grant specific performance of vendor's undivided share.
• A. Abdul Rashid v. Baburajan (2024) 2 SCC 556: Reaffirmed that Section 12(3) relinquishment can be made at any stage of litigation, including second appeal.