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Alagammal (Dead) Thr. LRs. & Ors. vs Ganesan and Anr.

Not available · 2024 INSC 28Decided 10 Jan 2024
Not available
Justice Vikram Nath · Justice Ahsanuddin Amanullah

Background

In 1990, the appellants agreed to sell a property to the respondents for Rs. 21,000, with Rs. 3,000 paid as advance and six months fixed for completing the sale. The balance was never paid within that period; instead, the appellants sold the same property to a third party (also an appellant) in 1997 for Rs. 22,000. The respondents then sued for specific performance, claiming they had made further part-payments over the years, but the appellants disputed this, including challenging the authenticity of a thumb-impression on one payment endorsement. The trial court dismissed the suit, but the First Appellate Court reversed this, and the Madras High Court (Madurai Bench) upheld that reversal.

Decision Breakdown

The Supreme Court restored the trial court's dismissal of the suit, holding that even where "time is not the essence of the contract" for property sales, a court must still weigh unreasonable delay and inaction by the buyer when deciding whether to grant the discretionary remedy of specific performance. Here, the respondents showed roughly two-and-a-half years of inaction in paying the balance and completing formalities like preparing the sale deed on stamp paper, despite a steep rise in property prices in the interim: conduct the Court found inequitable to reward with specific performance. The Court set aside both the High Court's and the First Appellate Court's judgments and revived the trial court's original dismissal of the suit.

Lesson Learnt

Even when a sale agreement does not expressly make time "the essence of the contract," a buyer seeking specific performance must still act with reasonable diligence: prolonged, unexplained delay in paying the balance consideration and completing the transaction can by itself defeat an otherwise valid claim for specific performance.

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

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