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Supreme Court: Completed sale under decree cannot be undone by refund
The Supreme Court has ruled that once a decree for specific performance of an agreement to sell leads to execution of the sale deed and delivery of possession, the completed transaction cannot…
The Supreme Court has ruled that once a decree for specific performance of an agreement to sell leads to execution of the sale deed and delivery of possession, the completed transaction cannot be reversed by ordering an enhanced monetary refund to settle equities. A bench of Justice JB Pardiwala and Justice K Vinod Chandran restored a 1979 trial court decree for specific performance concerning about five bighas of agricultural land near Agra.
The dispute arose from a registered agreement to sell dated June 16, 1975, under which approximately five bighas of land was agreed to be sold within two years for Rs 20,000, with Rs 5,000 paid as advance. The trial court decreed specific performance on February 28, 1979, and the sale was executed through court on June 7, 1979, with the plaintiff remaining in possession since then. The first appellate court reversed the decree, and the Allahabad High Court directed the defendant to pay the plaintiff Rs 15 lakh with interest instead of restoring the sale.
Setting aside the concurrent findings, the Supreme Court held that since the sale was completed in 1979 and the plaintiff had owned and possessed the land for over four decades, equity favoured the plaintiff who had parted with Rs 20,000 more than 45 years ago. The court ordered that the Rs 15 lakh deposited by the defendant after the High Court judgment be refunded to the defendant within one month.
The appeal was allowed, restoring the trial court order and confirming the plaintiff's possession.
Indian Opinion Analysis
This ruling reaffirms the finality of court-executed sale deeds under the Specific Relief Act, 1963, which permits a decree for specific performance when monetary compensation is inadequate. The case echoes the principle from the 1996 Supreme Court judgment in Chand Rani v. Kamal Rani, where the court held that a party seeking specific performance must show continuous readiness and willingness. Here, the trial court found that the plaintiff met that test, and the completed execution of the sale made any substitution by refund inequitable. The decision blocks a growing trend in high courts to adjust long-standing decrees for inflation, which would unsettle property titles decades after possession transferred. The next point to watch is how trial courts apply this ruling to pending appeals where decrees for specific performance were executed but later challenged on delay grounds.
Source: livelaw.in
This brief was synthesised by AI from the source linked above.
