Revanasiddayya v. Gangamma @ Shashikala
Background
In 1986, the original landowner agreed to sell his land to the appellant, who paid earnest money and was put in possession, but the sale deed was never executed before the owner died. His legal heirs (respondents) sued for a declaration of ownership and possession; the trial court declared them owners but refused possession. Separately, the appellant's own later suit for specific performance of the 1986 agreement was dismissed and that dismissal became final. On the heirs' appeal, the High Court granted them possession too, which the appellant then challenged in the Supreme Court.
Decision Breakdown
The Supreme Court upheld the High Court's decision to award possession to the respondents, holding that once the appellant's own suit for specific performance had been finally dismissed, his possession, earlier protectable under Section 53-A of the Transfer of Property Act as a part-performing buyer, became unauthorized and illegal, entitling the true owners to recover it. However, invoking its special power under Article 142 of the Constitution to do complete justice, the Court also directed the respondents to refund the Rs. 1,00,000 earnest money the appellant had paid decades earlier (with 6% interest if not paid within three months), while the appellant was directed to hand back vacant possession within three months.
Lesson Learnt
Losing a suit for specific performance of a property sale does not just end there: it also strips the buyer of any protected right to stay in possession, but courts can still use their equitable powers to ensure the buyer at least gets the earnest money back rather than losing both the land and the money.