Sobaran Singh (Dead) Through LRs. v. Gordhan Singh (Dead) Through LRs.
Where a decree for specific performance had already culminated in execution of the sale deed through court and delivery of possession, the Supreme Court restored that decree. A later substitution of monetary compensation, purportedly on equitable grounds, was unwarranted on the facts.
Legal Issue
Whether the High Court, after affirming the Trial Court’s findings in favour of the purchaser, could substitute the decree for specific performance with enhanced monetary compensation.
The Court considered the relevance of the sale deed already having been executed through court and the purchaser’s long-standing possession of the property.
Brief Facts
The dispute arose from a registered agreement to sell dated 16 June 1975 concerning approximately five bighas of agricultural land near Agra. The agreed sale consideration was ₹20,000, of which ₹5,000 had been paid as advance.
The vendor contended that the transaction was merely a loan arrangement and that the agreement to sell had been executed as security. The Trial Court rejected this defence, found the agreement proved through the purchaser and attesting witnesses, and decreed specific performance.
The Trial Court directed execution of the sale deed upon payment of the balance consideration. The sale deed was thereafter executed through court on 7 June 1979, and the purchaser remained in possession.
The First Appellate Court reversed the decree. In second appeal, the High Court found that the Trial Court’s findings were correct but directed the vendor to pay ₹15 lakh with interest instead of restoring specific performance.
Held / Decision
The Supreme Court allowed the appeal, reversed the decisions of the First Appellate Court and the High Court, and restored the Trial Court’s decree for specific performance.
The Court held that the sale agreement had already come to fruition through execution of the sale deed by court in 1979. The purchaser had acquired ownership and had remained in possession since then.
In these circumstances, equity operated in favour of the purchaser. The High Court could not replace the completed sale transaction with monetary compensation while affirming the Trial Court’s findings on the validity of the agreement.
The ₹15 lakh deposited by the vendor pursuant to the High Court’s judgment was directed to be refunded to the vendor with accrued interest.
Important Observations
Full Headnote
Legal Significance
The ruling is relevant where a decree for specific performance has already been substantially or fully executed.
It confirms that appellate courts must account for execution of the sale deed, transfer of ownership and delivery of possession before altering the relief. Monetary substitution cannot ordinarily unsettle a completed transaction merely because of the passage of time or a perceived need to balance equities.