Jaspal Singh v. Ashwani Kumar
Background
Jaspal Singh agreed in 2003 to buy a co-owner's half-share of a property with a factory on it from Ashwani Kumar for Rs. 12.5 lakh, paying substantial earnest money, with the sale deed date extended twice by mutual consent. When Ashwani Kumar failed to appear before the Sub-Registrar to complete the sale, Jaspal Singh sued for specific performance. The Trial Court found the agreement genuine but refused specific performance on a technical reading of its refund clause; the First Appellate Court reversed this and decreed specific performance in Jaspal Singh's favour, after which the sale deed was executed and possession handed over. The High Court, however, allowed a second appeal by Ashwani Kumar and restored the Trial Court's refusal of specific performance, questioning the genuineness of the transaction.
Decision Breakdown
The Supreme Court held that the High Court had exceeded its limited jurisdiction under Section 100 of the Code of Civil Procedure by overturning concurrent factual findings of the Trial Court and First Appellate Court on genuineness of the agreement without ever recording a finding that those findings were "perverse": the only basis on which a second appellate court may disturb pure findings of fact. The Court also held that a clause merely providing for refund of earnest money if the sale deed could not be executed does not, on its true construction, bar a claim for specific performance. It found the two mutually-agreed extensions (totalling about seven months) were fully consistent with a genuine transaction and did not indicate a sham. The Court restored the First Appellate Court's decree of specific performance and quashed the High Court's judgment.
Lesson Learnt
A High Court cannot reopen concurrent findings of fact in a second appeal unless it specifically finds them "perverse"; and an earnest-money-refund clause in a sale agreement does not by itself prevent a buyer from seeking specific performance of the sale.