Sukhbir v. Ajit Singh
Background
The defendant (appellant) had agreed in 2010 to sell land to the plaintiff (respondent) for Rs. 32 lakhs, of which the plaintiff paid Rs. 31.5 lakhs upfront. When the defendant refused to execute the final sale deed, the plaintiff sued for specific performance. While the suit was pending but before a decree was passed, the government acquired the land under the Land Acquisition Act: a fact not brought to the trial court's notice at the time. The trial court and first appellate court both decreed specific performance in the plaintiff's favour; on second appeal, the High Court modified this, holding that since the land was now acquired, the plaintiff should instead "step into the shoes" of the original owner and receive the entire compensation (with interest and solatium) that the government had deposited for the land, relying on the Supreme Court's earlier ruling in Jagdish Singh v. Natthu Singh. The defendant appealed this modification.
Decision Breakdown
The Supreme Court upheld the High Court's approach as consistent with Jagdish Singh and a later case, Urmila Devi v. Deity, Mandir Shree Chamunda Devi: where a decree for specific performance becomes impossible to execute through no fault of the plaintiff (here, because the government acquired the land), Section 21 of the Specific Relief Act permits the court to substitute an award of the land-acquisition compensation in place of specific performance, even if compensation was not separately claimed in the plaint. The Court also reaffirmed that the original owner is still entitled to deduct from that compensation the reasonable costs and effort spent in obtaining the compensation award. Finding no proof of any specific sum spent by the defendant for that purpose, the Court fixed a lump-sum deduction of Rs. 3 lakhs (covering litigation-related expenses and the balance Rs. 50,000 of sale price still owed) in the defendant's favour, with the rest of the compensation, interest and solatium going to the plaintiff.
Lesson Learnt
If land under an agreement to sell is compulsorily acquired by the government before a sale deed is executed, the buyer who has already paid most of the price does not lose out: courts can convert the buyer's right to specific performance into a right to the government's acquisition compensation instead.