The Supreme Court has partly allowed an appeal arising from a long-running property dispute, holding that the grant of specific performance after more than seventeen years would not be equitable, and directed the sellers to pay ₹3 crore as lump-sum compensation to the buyer to do complete justice between the parties.
A Bench comprising Justice Vikram Nath and Justice Sandeep Mehta was hearing an appeal, where the appellant had sought specific performance of an Agreement to Sell dated 22 January 2008 for the purchase of a residential property in Ashok Vihar, Delhi, measuring 300 square yards.
The appellant had paid ₹90 lakh towards the total sale consideration of ₹6.11 crore, including ₹60 lakh as earnest money and ₹30 lakh as part payment, which was acknowledged by the respondents. While the Trial Court had decreed the suit for specific performance in 2021, the Delhi High Court, in appeal, set aside the decree in 2025, holding that the buyer failed to establish readiness and willingness to perform the contract and permitting forfeiture of the earnest money.
Examining the matter, the Supreme Court agreed with the High Court’s finding that the appellant had failed to demonstrate financial wherewithal to pay the balance consideration of ₹5.21 crore on the stipulated date and had not even presented himself before the Sub-Registrar. At the same time, the Court noted that the respondents were also at fault, as they had not fulfilled their contractual obligations relating to mutation and conversion of the property from leasehold to freehold.
The Court reiterated that ‘there is no straitjacket formula for determining readiness and willingness, the same has to be construed with respect to the facts and circumstances of each case.’ Considering the prolonged lapse of time (17 years) since execution of the agreement and the conduct of both parties, the Bench held that enforcing the contract at this stage would be inequitable.
However, the Court found that permitting forfeiture of the entire earnest money would result in unjust enrichment of the sellers. To balance the equities and bring finality to the dispute, the Supreme Court modified the High Court’s judgment and directed the respondents to pay ₹3 crore to the appellant within four weeks, observing that this would fully restitute the buyer while avoiding further complications.
Accordingly, the appeal was partly allowed, and the High Court’s judgment was partly modified.
Appearances
Petitioner- Mr. Dhruv Mehta, Sr. Adv. Mr. Aneesh Mittal, AOR Ms. Deepriya Snehi, Adv. Ms. Yashika Kaushik, Adv. Ms. Nishi Sangtani, Adv. Ms. Komal Mittal, Adv.
Respondents- Siddharth Batra, Adv. Mr. Chinmay Dubey, Adv. Ms. Archna Yadav, Adv. Ms. Preetika Shukla, Adv.
