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Sukhwinder Singh v. Jagroop Singh & Anr.

Civil Appeal · 2020 INSC 100Decided 28 Jan 2020
Civil Appeal No. 760 of 2020
Justice R. Banumathi · Justice A.S. Bopanna

Background

The original defendant (seller) agreed in January 2004 to sell land in Punjab to the plaintiff for Rs 1,40,000, with Rs 69,500 paid as earnest money, but then sold the same land to the appellant (a second buyer) under a registered sale deed in June 2004 before the plaintiff's payment deadline. The plaintiff sued for specific performance and, alternatively, for a refund with damages. After an ex parte decree against the second buyer was eventually set aside by the Supreme Court in an earlier round (on payment of costs), the suit proceeded, and the trial court, first appellate court and High Court all ordered specific performance in the plaintiff's favour, directing possession be transferred to him.

Decision Breakdown

The Supreme Court found that the lower courts had wrongly concluded the plaintiff was "ready and willing" to complete the purchase, since he had paid only the earnest money by the agreed date and deposited the balance sale price years later, only after the suit was first decreed: this fell short of proving genuine readiness and willingness, a mandatory requirement for specific performance. The Court also held that the lower courts' finding that the second buyer "connived" with the seller was based on assumption rather than evidence, especially since the second buyer had purchased under a registered deed and taken possession. Because specific performance could not be granted, but the property had meanwhile appreciated significantly in value and the second buyer had benefited from it, the Court modified the remedy: instead of transferring the land, it directed the second buyer to pay the plaintiff Rs 3,50,000 (inclusive of the original earnest money) within three months, with 12% interest if delayed, while the plaintiff could withdraw his own deposited funds.

Lesson Learnt

Specific performance (forcing a sale through) is a discretionary remedy that requires the buyer to actually prove they were ready and able to pay on time: if that proof is weak, courts can instead order fair monetary compensation, taking into account any increase in the property's value, rather than transferring the property itself.

Official source (sci.gov.in)View Judgment (PDF)

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