Supreme Court Upholds Partial Specific Performance in Land Dispute

The case of B. Santoshamma & Anr. vs. D. Sarala & Anr. revolves around a dispute over the enforcement of a land sale agreement. The Supreme Court had to decide whether specific performance of the agreement should be granted entirely or partially, given that a portion of the land was sold to a third party before execution of the sale deed.

The appellants, B. Santoshamma and her husband B. Darshan Reddy (the Vendors), challenged the Andhra Pradesh High Court’s decision, which upheld the Trial Court’s ruling that specific performance could be granted only for the portion of the land still owned by the Vendors. The Supreme Court affirmed the High Court’s judgment, stating that equity must be considered while enforcing specific performance.

Background of the Case

The dispute concerns 300 square yards of land in Survey No. 262, Hayathnagar Village, Ranga Reddy District. The facts are as follows:

The Vendors purchased the suit land on August 20, 1982.
Shortly after, they allegedly entered into an oral agreement with P. Pratap Reddy to sell 100 sq. yards for Rs. 3,000, with Rs. 2,500 paid in advance.
On March 21, 1984, the Vendors entered into an agreement with D. Sarala (the Vendee) to sell the entire 300 sq. yards for Rs. 75,000, of which Rs. 40,000 was paid upfront.
The Vendors claimed they informed the Vendee about the earlier oral agreement with Pratap Reddy.
On May 25, 1984, the Vendors executed a registered sale deed for 100 sq. yards in favor of Pratap Reddy.
When the Vendors refused to execute the sale deed for the remaining 200 sq. yards, the Vendee filed a suit for specific performance in 1984.

Petitioner’s Arguments

The Vendors contended:

The sale agreement with the Vendee was conditional upon obtaining clearance from Pratap Reddy.
The Vendee had assured the Vendors that she would cancel the earlier agreement with Pratap Reddy.
The Vendee failed to pay the balance amount within the agreed time.
Since the agreement was for 300 sq. yards as a whole, it could not be partially enforced.
The Vendors had already executed a sale deed for 100 sq. yards, making complete enforcement of the agreement impossible.

Respondent’s Arguments

The Vendee countered:

The Vendors failed to disclose the earlier agreement with Pratap Reddy.
The Vendors refused to execute the sale deed despite the Vendee offering the balance Rs. 30,000 within the stipulated time.
The sale agreement did not mention any condition regarding cancellation of the earlier agreement with Pratap Reddy.
The Vendors deliberately avoided their obligation and tried to resile from the agreement after receiving Rs. 40,000.
The Vendee had taken possession of the entire 300 sq. yards.

Supreme Court’s Key Observations

The Supreme Court made the following key observations:

“The agreement dated 21.3.1984 does not incorporate any condition requiring the Vendee to cancel the agreement with Pratap Reddy. The Vendors’ claim that they relied on the Vendee’s assurance is untenable.”

The Court further noted:

The Vendors did not provide sufficient evidence to show that the sale agreement was conditional.
Once a person enters into an agreement, they cannot escape obligations due to subsequent transactions.
The Vendee was ready and willing to perform her obligations, as evidenced by her legal notices and tendering of balance consideration.
However, since the Vendors had already transferred 100 sq. yards to Pratap Reddy, full enforcement of the agreement was impossible.

Legal Precedents Considered

The Supreme Court relied on multiple precedents:

Durga Prasad vs. Deep Chand (AIR 1954 SC 75): Held that in specific performance suits, all parties with an interest in the property must be joined.
Mahalaxmi Coop. Housing Society Ltd. vs. Ashabhai Atmaram Patel (2013) 4 SCC 404: Clarified that consolidation of suits does not merge them into one case.
Oswal vs. Deepak Jewellers (1999) 6 SCC 40: Stated that the bar under Order II Rule 2 CPC must be pleaded explicitly.

Final Judgment

The Supreme Court upheld the Trial Court’s decision:

“Since title in respect of 100 square yards had passed to Pratap Reddy, the suit for specific performance can only be enforced for the remaining 200 square yards. The Vendee is entitled to specific performance for the land still under the Vendors’ ownership.”

The Court directed:

The Vendors must execute a sale deed in favor of the Vendee for 200 sq. yards.
The balance sale consideration was proportionally reduced to Rs. 50,000.
The relief sought for 300 sq. yards was rejected since Pratap Reddy’s ownership could not be disturbed.

Implications of the Judgment

This ruling has significant implications for contract enforcement:

It clarifies that specific performance can be granted partially when full enforcement is impossible.
It prevents vendors from escaping liability by transferring a portion of the property to a third party.
It reinforces that an agreement must be performed unless proven to be conditional.
It upholds the principle that time is not of the essence in land sale agreements unless explicitly stated.

With this judgment, the Supreme Court reaffirmed the importance of upholding contractual obligations while ensuring equitable relief in cases where full enforcement is impractical.

Petitioner Name: B. Santoshamma & Anr..
Respondent Name: D. Sarala & Anr..
Judgment By: Justice Uday Umesh Lalit, Justice Indira Banerjee.
Place Of Incident: Ranga Reddy District, Andhra Pradesh.
Judgment Date: 18-09-2020.

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