Specific Performance Barred if Development Specifications are Vague and Readiness/Willingness to Contract is Not Proved

The Appellant (Developer) and Respondents (Owners) entered into a Memorandum of Understanding (MOU) on 27.09.2004 to develop 31 acres of land into a residential township

The Developer paid a refundable security deposit of ₹2 Crores

Under the MOU, the Developer was to obtain land conversion and start construction within four months

The Developer alleged that a portion of the land being in a 'Park Zone' and the discovery of a petroleum pipeline hindered progress, claiming they spent ₹7 Crores on preliminary works

The Owners cancelled the GPA in 2007, citing abandonment and financial incapacity

The Developer sued for specific performance. The Commercial Court dismissed the suit, holding the Developer failed to prove readiness and willingness and that the MOU was too vague to enforce

During the appeal, the Developer filed I.A. No. 1/2026 to amend the plaint to seek a refund of the deposit and ₹106 Crores in compensation

The court applied Section 21(5) and Section 22(2) of the Specific Relief Act, 1963, which mandate that a court shall allow an amendment for refund of earnest money or compensation "at any stage of the proceeding" if not originally claimed

It followed Life Insurance Corporation of India v. Sanjeev Builders Pvt. Ltd. regarding the liberal grant of such amendments

Regarding enforceability, it applied Section 14(3)(c) of the Act (pre-2018), which requires that a building contract must be "sufficiently precise" and the plaintiff must be in possession for specific performance to be granted

The court cited Sushil Kumar Agrawal v. Meenakshi Sadhu to establish that vague terms like "detailed specifications to be agreed later" bar specific performance

Section 16(c) was applied to assess readiness (financial capacity) and willingness (conduct), following U.N. Krishna Murty v. A.N. Krishna Murthy

The Court allowed the amendment application (I.A. 1/2026), noting that the provisos to Sections 21 and 22 of the Specific Relief Act override the restrictive nature of Order VI Rule 17 of the CPC

On merits, the Court found the MOU unenforceable because it lacked precise specifications (e.g., quality of materials, structure sizes), which were left for a future Joint Development Agreement

Furthermore, the Developer was never in legal possession of the land

On readiness and willingness, the Court observed that the Developer's "in principle" loan sanction of ₹36 Crores was grossly insufficient for a ₹350 Crore project

The Developer's name had also been struck off the Register of Companies due to statutory defaults, and its liabilities exceeded its assets

The Court concluded the Developer committed the breach by failing to apply for land conversion for three years despite knowing the 'Park Zone' status

Consequently, under Clause 8.3 of the MOU, the Owners were entitled to forfeit 75% of the security deposit

The Court partly allowed the appeal...the Court ordered the Respondents to refund 25% of the security deposit (₹50,00,000/-) with 12% interest per annum from the date of the amendment application (06.04.2026) until payment