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Venkitalakshmi v. K. Raju & Ors.

Civil Appeal · 2019 INSC 893Decided 13 Aug 2019
Civil Appeal Nos. 6258-6259 of 2019
Justice Uday Umesh Lalit · Justice Vineet Saran

Background

The appellant's predecessor had entered into agreements in 1980 to purchase land, paying a small earnest amount, but the sellers later sold the same land to other parties. The trial court believed the buyer's documents showing that the time for completing the sale had been validly extended and decreed specific performance in the buyer's favour. On appeal, the Madras High Court disbelieved those time-extension documents and held that the buyer had not shown he was "ready and willing" to complete the purchase, a mandatory requirement for specific performance, and reversed the decree.

Decision Breakdown

The Supreme Court examined the High Court's findings of fact on the disputed extension documents and found no error in its conclusion that the buyer's time-extension evidence could not be believed. Since that theory collapsed, the claim of continuous "readiness and willingness" to pay the balance price also failed, which is an essential condition for a court to order specific performance of a contract for sale. However, recognising that the buyer's predecessor had genuinely parted with Rs. 5,000 as earnest money back in 1980, the Court directed the respondents to pay Rs. 5 lakhs as compensation in lieu of returning that earnest money, and otherwise dismissed the appeals.

Lesson Learnt

To win a court order forcing the other side to complete a property sale (specific performance), a buyer must prove not just that a valid agreement existed, but that they were continuously ready and willing to pay the balance price, losing on that single factual point can be fatal to the whole claim, even if some compensation may still be awarded for money already paid.

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

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