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Uncategorized (needs manual review)Supreme Court of India

Smt. Katta Sujatha Reddy & Anr. vs Siddamsetty Infra Projects Pvt. Ltd. & Ors.

Civil AppealDecided 25 Aug 2022
Civil Appeal No. 5822 of 2022
N.V. Ramana · Krishna Murari · Hima Kohli

Background

In 1997, the landowners (appellants) agreed to sell about 40 acres of agricultural land near Hyderabad to Siddamsetty Infra Projects Pvt. Ltd. for roughly Rs. 40.2 lakh, of which the purchaser paid about Rs. 34.8 lakh but failed to pay the balance of about Rs. 5.4 lakh within the 3-month deadline fixed in the agreement. Years later, the purchaser sued for specific performance (i.e., to force the sale through). The trial court dismissed the suit, finding the purchaser was never put in possession, had suppressed that one of its cheques had bounced, and had approached the court "with unclean hands," but the High Court's first appellate court reversed this and decreed specific performance in the purchaser's favour for 90% of the land (corresponding to the percentage of price paid).

Decision Breakdown

The Supreme Court restored the trial court's view, holding that the purchaser was never in possession of the land (photographic evidence showed no development had occurred, contrary to the purchaser's claims) and had breached the essential payment obligation under the contract, while also suing after unexplained delay of nearly five years, both factors weighing heavily against the discretionary remedy of specific performance. On the High Court's alternative reasoning that the purchaser should at least get 90% of the land under Section 12 of the Specific Relief Act (partial performance), the Court held that provision only helps a party who is genuinely "unable" to perform through no fault of their own (e.g., part of the property having ceased to exist). It does not rescue a purchaser who simply defaulted on payment. Since the purchaser was the defaulting party, the appeal was allowed, the High Court's decree set aside, and, to balance the equities, the vendors were directed to refund the money already received with 7.5% annual interest.

Lesson Learnt

Specific performance is a discretionary remedy, not an automatic right: a buyer who fails to pay on time, delays suing for years, and cannot show they were kept ready and willing to perform will not get the property, even if they already paid a large part of the price; at best, they may get their money back with interest.

Smt. Katta Sujatha Reddy & Anr. vs Siddamsetty Infra Projects Pvt. Ltd. & Ors. – Legal Case Shots | LegalAware