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Abdullakoya Haji & Ors. v. Rubis Tharayil & Anr.

Civil Appeal · 2019 INSC 926Decided 20 Aug 2019
Civil Appeal No. 6449 of 2019
Justice R. Banumathi · Justice A.S. Bopanna

Background

In 2007, the respondent agreed to buy about 12.77 acres of land from the appellants for roughly Rs 2 crore, paying Rs 75 lakh as an advance, with the balance to follow once the land was measured and documents verified. When the sale did not go through, the respondent sued for specific performance. The trial court found the respondent had not proved he was truly ready and willing to pay the remaining amount and instead ordered the appellants to refund the advance with interest; the Kerala High Court reversed this on appeal and directed the appellants to execute the sale deed.

Decision Breakdown

The Supreme Court restored the trial court's view. It held the respondent had not shown continued financial capacity to pay the large balance consideration, and, crucially, had separately agreed to sell the very same property to a third party while his sale agreement with the appellants was still pending, undermining his claim to have been bona fide ready and willing to complete the purchase, which is a legal precondition for specific performance. The Court set aside the High Court's judgment and restored denial of specific performance, but to protect the respondent's interests, directed the appellants to refund the Rs 75 lakh advance with interest (at a higher rate if delayed), secured by a charge over the property.

Lesson Learnt

Specific performance of a property sale agreement is a discretionary remedy that courts will grant only where the buyer proves genuine, continuing readiness and willingness, including the actual ability to pay the balance price. Entering into a competing deal for the same property while a court case is pending can defeat that claim.

Official source (sci.gov.in)View Judgment (PDF)

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