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Civil Property & InheritanceSupreme Court of India

Ramesh Chand (Dead) through LRs v. Asruddin (Dead) through LRs

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 8427 of 2014)Decided 6 Oct 2015
Civil Appeal No. 8427 of 2014
Justice Dipak Misra · Justice Prafulla C. Pant

Background

In June 2004, Ramesh Chand agreed to sell about 12 kanals and 16 marlas of land to Asruddin for Rs 6 lakh, and accepted Rs 4 lakh as part payment. The land was mortgaged to a bank, and Ramesh Chand claimed the agreement was really security for a loan and that he had already agreed to sell the land to someone else. The trial court refused specific performance and ordered a refund of Rs 4 lakh with 8% interest, but the first appellate court decreed the sale and the High Court upheld that decree.

Decision Breakdown

The Supreme Court stressed that specific performance is a discretionary remedy under Section 20 of the Specific Relief Act, not a right to be granted automatically. The buyer had neither pleaded nor proved that he had got the mortgage on the land redeemed or was ready and willing to do so, which is the kind of circumstance that allows a court to refuse the decree. Instead of ordering the sale, the Court directed the seller's legal heirs to repay Rs 4 lakh with 18% interest from 21 June 2004 within three months, finding the trial court's 8% refund too small. If the sum is paid, the specific performance decree is set aside; if not, the decree stands, and the appeal was disposed of on those terms.

Lesson Learnt

A court can refuse to force a land sale where the buyer has not shown he was ready to complete it, including clearing any mortgage on the property, and may award money compensation instead. Sellers should clear any bank mortgage on land before signing a sale agreement.

Ramesh Chand (Dead) through LRs v. Asruddin (Dead) through LRs – Legal Case Shots | LegalAware