Specific Performance in Land Sale: Supreme Court Rules on Equitable Relief
The case of Leeladhar (Deceased) Through LRs vs. Vijay Kumar (Deceased) Through LRs & Others pertains to the enforcement of a land sale agreement. The Supreme Court, in its judgment on September 26, 2019, upheld the lower courts’ rulings, affirming the decree for specific performance of the agreement to sell.
Background of the Case
On February 15, 1985, Leeladhar entered into an agreement to sell 18 bighas of land to Deshraj (father of the respondents) for a total sum of Rs. 40,000. Out of this, Rs. 35,000 was paid in advance, and the balance Rs. 5,000 was paid on March 26, 1985. Leeladhar also handed over possession of the land to Deshraj.
On January 20, 1988, Deshraj sent a legal notice to Leeladhar, asking him to execute the sale deed. However, Leeladhar did not respond or appear before the Sub-Registrar. Deshraj passed away on May 16, 1988, and his legal heirs filed a suit for specific performance. In the alternative, they sought a refund of Rs. 40,000 with interest.
Legal Issues and Arguments
Arguments by the Appellants:
- The agreement was a sham document, executed only to secure repayment of a loan.
- Deshraj was a moneylender who frequently executed such documents.
- Leeladhar had already repaid the full amount with interest on March 3, 1987.
- The delay in filing the suit suggested that the agreement was not genuine.
Arguments by the Respondents:
- The agreement to sell was valid and registered.
- The entire sale consideration was paid, and possession was handed over.
- The delay in filing the suit was justified as they were already in possession of the land.
- The appellants failed to provide original documents proving the alleged loan repayment.
Supreme Court’s Observations
The Supreme Court held that:
“Once we hold that the document was an agreement to sell and not a sham transaction, the appellants cannot take any benefit of equitable relief.”
The Court analyzed Section 20 of The Specific Relief Act, which provides discretionary power to grant specific performance. It ruled:
“The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so.”
Regarding the appellant’s claims about the agreement being a loan security, the Court noted:
“All courts below have given a concurrent finding that the agreement was genuine. The appellants’ claim that the money was repaid is not supported by original documents.”
Key Rulings and Conclusion
The Supreme Court dismissed the appeal and ruled that:
- The agreement to sell was valid and enforceable.
- The respondents were entitled to specific performance.
- The appellants failed to establish that the agreement was executed as a loan security.
- The discretionary relief under Section 20(2)(c) of The Specific Relief Act was not applicable in this case.
The ruling reinforces that courts will uphold valid land sale agreements and that mere claims of financial hardship will not be enough to evade contractual obligations.
Petitioner Name: Leeladhar (Deceased) Through LRs.Respondent Name: Vijay Kumar (Deceased) Through LRs & Others.Judgment By: Justice Deepak Gupta, Justice Aniruddha Bose.Place Of Incident: Nainital, Uttarakhand.Judgment Date: 26-09-2019.
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