M/s. Shivali Enterprises Etc. vs Smt. Godawari (Deceased) Thr. LRs. and Others
Background
In 1983, Shivali Enterprises entered into an agreement to purchase land from the respondents-defendants for Rs. 2,900 per bigha, paying an initial earnest amount, with total payments eventually reaching Rs. 1,50,000 out of an agreed Rs. 1,65,000, and taking physical possession of the property. The sellers were required to first obtain an Income-Tax Clearance Certificate and correct revenue records (which mistakenly showed the Central Government as owner) before executing the final sale deed. When the sellers later tried to create third-party rights over the same land instead of completing the sale, the buyer filed a suit for specific performance. Both the trial court and the first appellate court ruled in the buyer's favour, but the Punjab and Haryana High Court, in second appeal, reversed those concurrent findings and instead directed the buyer to pay the present market value if it wanted the sale deed executed.
Decision Breakdown
The Supreme Court held that a High Court hearing a second appeal cannot ordinarily disturb concurrent findings of fact by the trial court and first appellate court unless those findings are shown to be "perverse", based on wrong legal tests or mere conjecture, and the High Court here had made no such finding of perversity, so its interference was unjustified. The Court also held that the sellers could not "blow hot and cold" by claiming, on one hand, that the sale could not proceed until they themselves obtained the tax clearance and corrected the records, while simultaneously asserting a right to sell the land to someone else. Given the buyer had already paid over 90% of the price and was in possession, the Court restored the trial court's decree of specific performance, set aside the High Court's judgment, and upheld the original concurrent judgments of the trial and appellate courts.
Lesson Learnt
A High Court cannot casually overturn matching findings of fact reached by two lower courts in a second appeal. It must specifically and explicitly find "perversity" in those findings; and a seller who accepts most of the purchase price and delays performance for their own reasons cannot then try to escape the sale by claiming a right to sell to someone else.