Jayakantham & Others v. Abaykumar
Background
The respondent's father had entered into an agreement in 1999 to buy a small residential property from the appellants for Rs. 1.60 lakh, paying Rs. 60,000 as advance, but the sale was never completed. After the respondent sued for specific performance, three courts below (trial court, first appellate court, and the Madras High Court in second appeal) all ruled in his favour and ordered the appellants to execute the sale deed. The appellants argued before the Supreme Court that the property was their only asset, had become extremely valuable, and that the underlying agreement was really just security for a loan rather than a genuine sale.
Decision Breakdown
The Supreme Court held that even though the appellants' loan-transaction defence had already been rejected on facts by three courts and could not be reopened, the grant of specific performance is always discretionary under Section 20 of the Specific Relief Act, 1963, and courts need not order it merely because it is legally permissible. Noting that the respondent's own father who negotiated the deal was a moneylender, and that the agreed price was far below the property's real value even back then, the Court found the transaction gave the buyer's side an unfair advantage, making specific performance inequitable. It therefore set aside the decree for specific performance and substituted it with a direction that the appellants pay the respondent Rs. 15 lakh (with 9% interest if delayed) in lieu of the property itself.
Lesson Learnt
Winning a lawsuit for specific performance does not automatically mean a court must hand over the property: Indian courts can, and sometimes do, substitute monetary compensation instead if the original bargain was one-sided or unfair, even if all the facts otherwise favour the buyer.