Specific Performance in Property Disputes: Supreme Court’s Ruling in C. Haridasan vs. Anappath Parakkattu Vasudeva Kurup

The Supreme Court of India recently ruled in the case of C. Haridasan vs. Anappath Parakkattu Vasudeva Kurup & Others, addressing the grant of specific performance in a property sale dispute. The case involved an agreement to sell land, disputes over the fulfillment of contractual obligations, and the court’s discretion in enforcing specific performance.

Background of the Case

The dispute arose from an agreement dated August 7, 2005, under which the defendants agreed to sell their land to the plaintiff for ₹8,750 per cent. The plaintiff paid ₹10,000 as an advance. The agreement stipulated that the remaining amount had to be paid within six months, provided that the defendants made available title documents, including a purchase certificate under the Kerala Land Reforms Act.

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On November 2, 2006, the plaintiff sent a legal notice asking the defendants to execute the sale deed. The defendants refused and canceled the agreement. The plaintiff then filed a suit for specific performance or, in the alternative, a refund of the advance with interest.

Trial Court Judgment

• The trial court ruled in favor of the plaintiff, ordering specific performance of the contract.
• To ensure fairness, the trial court increased the sale consideration by 25%, setting it at ₹11,000 per cent instead of ₹8,750 per cent.
• The plaintiff was directed to deposit ₹3,97,000 as the balance sale consideration within two months.

High Court Judgment

• The defendants appealed to the Kerala High Court, which reversed the trial court’s order.
• The High Court ruled that the trial court should not have exercised its discretion in favor of the plaintiff under Section 20 of the Specific Relief Act.
• The High Court also stated that increasing the sale consideration was unjustified.
• Instead of granting specific performance, the High Court ordered the defendants to refund ₹3,10,000 to the plaintiff.

Supreme Court’s Observations

• “The execution of the agreement to sell and receipt of part sale consideration have not been disputed by the defendants.”
• “The trial court was justified in decreeing specific performance after considering the plaintiff’s readiness and willingness to perform his part of the contract.”
• “The High Court erred in interfering with the trial court’s judgment without setting aside the findings regarding execution, payment, and readiness of the plaintiff.”
• “The increase in sale consideration by 25% was to ensure fairness and should not have been viewed as a reason to deny specific performance.”
• “Equitable relief should balance interests, and the plaintiff’s willingness to pay an increased price supports the trial court’s decree.”

Final Judgment

• The Supreme Court set aside the High Court’s judgment and restored the trial court’s decree for specific performance.
• The plaintiff was required to pay an additional ₹10,00,000 to the defendants in addition to the sale consideration.
• The court directed the refund of ₹3,10,000 that had been deposited by the defendants under the High Court’s order.
• The plaintiff was given six weeks to make the payment, after which the defendants were to execute the sale deed.

Legal Precedents Considered

• Pratap Lakshman Muchandi vs. Shamlal Uddavadas Wadhwa (2008): Held that increasing the sale price while granting specific performance can balance equities.
• Saradamani Kandappan vs. S. Rajalakshmi (2011): Addressed the significance of time and price escalation in property transactions.
• J.P. Builders vs. A. Ramdas Rao (2011): Reaffirmed the necessity of proving readiness and willingness to fulfill contractual obligations in specific performance cases.

Implications of the Judgment

• The ruling reinforces that courts should not deny specific performance when the plaintiff is ready and willing to perform the contract.
• It establishes that courts have the discretion to adjust sale consideration to balance equities.
• The decision ensures that sellers cannot escape contractual obligations merely because property values have appreciated.
• The judgment sets a precedent for protecting contractual rights while maintaining fairness in property transactions.

Conclusion

The Supreme Court’s ruling in this case underscores the principle that specific performance should be granted when a valid contract exists and the buyer demonstrates readiness and willingness to fulfill the contract. The decision highlights that courts can balance equities by adjusting sale consideration rather than outright denying relief. This ruling strengthens the enforceability of property sale agreements and serves as an important precedent in contract law.

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Petitioner Name: C. Haridasan.
Respondent Name: Anappath Parakkattu Vasudeva Kurup & Others.
Judgment By: Justice M.R. Shah, Justice B.V. Nagarathna.
Place Of Incident: Kerala.
Judgment Date: 13-01-2023.

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