Supreme Court Rejects Specific Performance in Property Dispute, Restores Trial Court Verdict

The case of Janardan Das & Ors. vs. Durga Prasad Agarwalla & Ors. revolved around a property dispute concerning the enforcement of an agreement for sale. The Supreme Court, in its judgment dated September 26, 2024, overturned the Orissa High Court’s ruling that had granted specific performance in favor of the plaintiffs and restored the Trial Court’s verdict, which had dismissed the suit.

This ruling clarifies the application of Section 16(c) of the Specific Relief Act, 1963, and reaffirms the principle that a plaintiff must demonstrate continuous readiness and willingness to perform their contractual obligations for specific performance to be granted.

Background of the Case

The dispute pertains to a property located in Baripada, Odisha, originally owned by Surendranath Banerjee. After his demise, the property was inherited by his five heirs:

Two sons – Binayendra Banerjee (Defendant No. 1) and Late Soumendra Nath Banerjee.
Three daughters – Smt. Rekha Mukherjee, Smt. Sikha Das, and Smt. Monila Pal (Defendant Nos. 6 to 8).

The case revolves around two conflicting sale transactions:

An oral agreement dated April 14, 1993, wherein all co-owners agreed to sell the property to the appellants (Defendant Nos. 9 to 11) for ₹4,20,000.
A written agreement dated June 6, 1993, wherein Defendant No. 1 and Late Soumendra agreed to sell the property to the plaintiffs for ₹5,70,000, with ₹70,000 paid as earnest money.

The plaintiffs claimed that Defendant No. 1 was authorized to act on behalf of his sisters through a General Power of Attorney (GPA) dated December 30, 1982. However, the defendants contended that this GPA was limited in scope and was effectively revoked by a partition deed dated February 17, 1988, which redefined ownership rights.

Legal Proceedings

Trial Court Verdict

The Trial Court dismissed the plaintiffs’ suit, ruling that the agreement dated June 6, 1993, was unenforceable because:

Defendant No. 1 did not have the authority to sell the shares of his sisters (Defendant Nos. 6 to 8).
The agreement explicitly required the sisters to come to Baripada within three months to execute the sale deed, but this never happened.
The plaintiffs failed to demonstrate continuous readiness and willingness to perform their obligations under Section 16(c) of the Specific Relief Act.

The Trial Court upheld the validity of the sale deed dated September 27, 1993, executed in favor of the appellants (Defendant Nos. 9 to 11), ruling that they were bona fide purchasers who had acquired valid title.

Orissa High Court Ruling

The High Court reversed the Trial Court’s judgment and granted specific performance in favor of the plaintiffs.
It ruled that the GPA dated December 30, 1982, was valid and conferred authority upon Defendant No. 1 to sell the entire property.
The High Court also found that the plaintiffs had demonstrated continuous readiness and willingness to fulfill their obligations.
It directed all defendants, including the appellants, to execute the sale deed in favor of the plaintiffs.

Appeal Before the Supreme Court

The appellants challenged the High Court’s decision, arguing that:

The High Court misinterpreted the GPA, which did not authorize Defendant No. 1 to sell the property on behalf of his sisters.
The agreement dated June 6, 1993, was contingent upon obtaining consent from the sisters, which was never obtained.
The plaintiffs failed to demonstrate continuous readiness and willingness, as required under Section 16(c) of the Specific Relief Act.
The appellants were bona fide purchasers who had lawfully acquired the property through a valid sale deed.

Supreme Court’s Observations

The Supreme Court, comprising Justices Vikram Nath, Pankaj Mithal, and Prasanna B. Varale, examined three key issues:

1. Readiness and Willingness of the Plaintiffs

The Court ruled that the plaintiffs failed to demonstrate continuous readiness and willingness to perform their obligations.
The agreement required the sisters to execute the sale deed within three months, but the plaintiffs did not take any proactive steps to secure their consent.
The Court cited U.N. Krishnamurthy v. A.M. Krishnamurthy (2023), emphasizing that a plaintiff must prove they had sufficient funds or arrangements to complete the sale.

2. Authority of Defendant No. 1 Under the GPA

The Court ruled that the GPA was limited in scope and did not authorize Defendant No. 1 to sell the property.
It noted that the partition deed dated February 17, 1988, effectively revoked any prior authority granted under the GPA.

3. Discretionary Nature of Specific Performance

The Court emphasized that specific performance is a discretionary relief under Section 20 of the Specific Relief Act.
It ruled that granting specific performance would be inequitable since the plaintiffs failed to fulfill their obligations, and the property had already been lawfully sold to the appellants.

Final Judgment

The Supreme Court ruled:

The appeal was allowed, and the High Court’s decision was set aside.
The Trial Court’s judgment dismissing the suit for specific performance was restored.
The plaintiffs were directed to be refunded ₹10,00,000 as compensation, including the earnest money and interest.
There was no order as to costs.

Petitioner Name: Janardan Das & Ors..
Respondent Name: Durga Prasad Agarwalla & Ors..
Judgment By: Justice Vikram Nath, Justice Pankaj Mithal, Justice Prasanna B. Varale.
Place Of Incident: Baripada, Odisha.
Judgment Date: 26-09-2024.

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: janardan-das-&-ors.-vs-durga-prasad-agarwal-supreme-court-of-india-judgment-dated-26-09-2024.pdf

Directly Download Judgment: Directly download this Judgment

See all petitions in Property Disputes
See all petitions in Contract Disputes
See all petitions in Public Interest Litigation
See all petitions in Judgment by Vikram Nath
See all petitions in Judgment by Pankaj Mithal
See all petitions in Judgment by Prasanna Bhalachandra Varale
See all petitions in allowed
See all petitions in Quashed
See all petitions in supreme court of India judgments September 2024
See all petitions in 2024 judgments

See all posts in Civil Cases Category
See all allowed petitions in Civil Cases Category
See all Dismissed petitions in Civil Cases Category
See all partially allowed petitions in Civil Cases Category