Supreme Court Upholds Buyer’s Right in Specific Performance Suit Over Land Sale Dispute

The case of Ramathal v. Maruthathal & Others revolves around the enforcement of a sale agreement for land, where the seller failed to perform their obligations. The Supreme Court had to determine whether the contract should be specifically enforced and whether the High Court had exceeded its jurisdiction in overturning the concurrent findings of the lower courts.

Background of the Case

The dispute arose over a sale agreement dated 10.12.1986 between the appellant (buyer) and the respondent (seller). The contract required the seller to conduct a survey and demarcate the boundaries before the final sale could be completed. The buyer paid Rs. 40,000 as earnest money, and the total sale consideration was fixed at Rs. 1,01,000 per acre. When the seller failed to fulfill their obligation, the buyer issued a legal notice and later filed a suit for specific performance of the contract.

Legal Issues Before the Court

• Whether the seller was required to conduct a survey as a condition precedent to the sale.
• Whether the High Court exceeded its appellate jurisdiction under Section 100 CPC by re-evaluating factual findings.
• Whether the buyer was ready and willing to perform their part of the contract.

Arguments by the Parties

Petitioner’s Arguments (Buyer)

The buyer’s counsel argued:

• The High Court could not reappreciate evidence in a second appeal under Section 100 CPC.
• The contract explicitly required the seller to conduct a survey, which was not done.
• The lower courts had correctly ruled in favor of the buyer, finding that the seller had breached the agreement.
• The buyer was always ready and willing to complete the transaction.

Respondent’s Arguments (Seller)

The seller’s counsel countered:

• The survey condition was not a prerequisite for completing the sale.
• The buyer failed to prove their financial capability to complete the purchase.
• The High Court had properly considered the oral evidence, which suggested the survey had been conducted.

Supreme Court’s Judgment

The Supreme Court, comprising Justices N.V. Ramana and Prafulla C. Pant, ruled in favor of the buyer, reinstating the trial court and appellate court judgments.

“The High Court has exceeded its jurisdiction by reversing the well-considered judgment of the courts below, which was based on cogent reasoning.”

The Court held that:

• The seller had failed to conduct the survey, as there was no documentary evidence proving otherwise.
• The High Court should not have interfered with factual findings unless there was a substantial question of law.
• The buyer had sufficiently demonstrated their readiness and willingness to complete the transaction.

Key Legal Observations

• Under Section 100 CPC, High Courts can only interfere in second appeals when a substantial question of law is involved.
• Specific performance of a contract depends on the conduct of the parties and their ability to fulfill contractual obligations.
• Escalation in property prices is not a ground to deny specific performance.

Final Order

The Supreme Court allowed the appeal, restored the trial court’s decree for specific performance, and set aside the High Court’s ruling.

Conclusion

This judgment reinforces the principle that contracts must be honored as per their terms and that High Courts cannot reassess factual findings in second appeals unless a substantial question of law exists. The ruling ensures that buyers who act in good faith are protected from arbitrary breaches by sellers.

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Download Judgment: Ramathal vs Maruthathal & Others Supreme Court of India Judgment Dated 22-08-2017.pdf

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