Home > Recent Judgements > Supreme Court Sets Aside Decree For Specific Performance
Oct 02, 2024
BACKGROUND
In the case between Lakha Singh versus Balwinder Singh & Anr. This is a case of the agreement to sell an agricultural land in the state of Punjab whose ownership is in dispute. On May 7, 2007, the respondent-plaintiff and the appellant-defendant entered into an agreement where the appellant-defendant would sell the land for Rs. 5, 00, 000 per Killa at an advance deposit of Rs. 16, 00, 000. There was also a clause which provided that the sale deed would be executed on September 19, 2008. It further included a clause stating that if the appellant-defendant failed to execute the sale deed on that date, he would be liable to return the earnest money and one third of total penalty amounting Rs. 32,00,000. The respondent then asserted that on the date appointed to attend the Joint Registrar’s office, which was the agreed date, the appellant-defendant failed to attend and breached the agreement. To support this assertion, the respondent provided an affidavit from the Executive Magistrate stating that the respondent’s presence was in aid. The trial court eventually ordered the recovery of Rs. 16,00,000 in favour of the respondent but refused positive agreements enforcement. Later, the appeals filed by the appellant against that order were unsuccessful upholding the order of the trial court. The respondent also sought a permanent injunction to prevent the appellant-defendant from alienating the property.
ISSUES
- Whether the respondent-plaintiff was ready and willing to perform his part of the contract on the stipulated date (19th September 2008)?
- Whether the respondent-plaintiff is entitled to specific performance of the agreement or any alternative relief?
- Whether the respondent-plaintiff is entitled to the claimed damages of Rs. 3,00,000/- in addition to the recovery of earnest money?
JUDGEMENT
In the case under review, this court is in appellate arms against the ruling of the High Court of Punjab and Haryana, and has exercised its jurisdiction. The court exercised its powers under Article 136 of the Constitution and quashed the decisions of the Trial Court, First Appellate Court, and the High Court which had declared a sale agreement, and the subsequent deeds enforcing the original agreement, as legitimate. The core of the reasoning of the Court as to why it was going to set aside the agreement was that it was executed in a manner which appeared rather suspicious; for example, the agreement was written on a blank stamp paper and the defendant’s thumb impression as to the agreement was taken without any supporting documents. This practice was deemed a “sheer piece of fraud and concoction,” highlighting the unethical behaviour of the plaintiff.
Moreover, the Court observed that the plaintiff had failed to approach the defendant for sixteen months to execute the sale deed, which indicated a lack of genuine intent to fulfil the agreement’s terms. The Supreme Court also rejected the plaintiff’s assertion of being ready and willing to execute the agreement based solely on his appearance at the Registrar’s Office. The Court emphasized that the plaintiff had not demonstrated that he possessed the balance consideration necessary at that time, further undermining his claim. Ultimately, the Supreme Court invalidated the sale agreement and denied the plaintiff’s request for specific performance, reinforcing the principle that contracts must be executed with integrity and genuine intent.
ANALYSIS
It is an agricultural land sale agreement which is under litigation in Punjab and where the respondent-plaintiff is the one claiming that the appellant-defendant did not carry out the sale enactment as was required of him. Initially, the trial court made an order in favour of the respondent and ordered the funds in dispute held by the court to be paid to the respondent since the said respondent was a successful plaintiff, but the order did not grant specific performance of the contract. Defense appeals that followed in the instances where losing parties appealed were dismissed but along the way, the Supreme Court came in and noticed the existence of some problems with the agreement. The Court observed that such agreements are not proper and it indicated that the plaintiff had no real intention of carrying out the terms of the agreement, especially considering that he did not make attempts to contact the defendant for a long time. In the end, the Supreme Court provided the interpretation that nullified the sale and ignored the plaintiff’s desire for the other party to execute the sale denying all ethical concerns, originality, and good faith in all non-judicial contracts.
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