Major Gen. Darshan Singh (D) By Lrs. & Anr. vs Brij Bhushan Chaudhary (D) by Lrs.
Background
In 1980, the defendant agreed to sell a residential property in Chandigarh to Major General (retd.) Darshan Singh for Rs. 3,50,000, with Rs. 30,000 paid as earnest money; the agreement itself capped the buyer's remedy on default to a refund plus Rs. 10,000 damages, expressly barring a suit for specific performance. The plaintiffs claimed the price was later renegotiated down to Rs. 2,90,000 and a draft sale deed was prepared, but the defendant then backed out after property prices rose in the area, prompting the plaintiffs to sue for specific performance instead of just damages.
Decision Breakdown
The Supreme Court held that specific performance is a discretionary and equitable remedy, and found that the plaintiffs had made false or materially incorrect statements in their plaint, including continuing to seek a decree over the entire suit property even after plaintiff no. 1 admitted in cross-examination that it was actually joint family (HUF) property, without joining the other co-sharers. Because of this conduct, the Court held the plaintiffs were disentitled to the discretionary relief of specific performance, upholding the concurrent findings of the Trial Court, Appellate Court and High Court on that point. However, it modified the decree to grant 6% annual interest on the Rs. 40,000 damages already awarded, from the date of the trial court's decree until payment, partly allowing the appeal only to that limited extent.
Lesson Learnt
Specific performance of a property sale agreement is not a guaranteed remedy. Courts can refuse it, even where a valid agreement exists, if the person seeking it has made false or misleading statements or has not disclosed material facts (such as other co-owners' shares) in their claim.