SUPREME COURT DIRECTS APPELLANT-BUILDER TO REGISTER SALE DEED IN FAVOR OF THE RESPONDENT-BUYER AFTER 60 YEARS OF LITIGATION

A two-Judge Bench of the Supreme Court comprising of Justice Vikram Nath and Rajesh Bindal passed a Judgment dated 06-12-2023 in the matter of M/s Greater Ashoka And Land Development Company vs. Kanti Prasad Jain (Deceased) Through LRs, Special Leave Petition (Civil) No. 23655-56 / 2018 and cleared that the Respondent was entitled to specific performance of contract and thereby, directed the Appellant-Developer to register Sale Deed in favour of the Respondent after about 60 years of litigation.

FACTS:

i) That the aforesaid Appeal filed before the Apex Court by the Appellant, M/s Greater Ashoka and Land Development Company (Appellant) against the Deceased, Kanti Prasad Jain, Through LRs (Respondents), challenged the Order dated 02.05.2018 of the Hon’ble High Court of Punjab and Haryana, Chandigarh (High Court), which reversed the Judgment dated 07.08.1988 of the Ld. Additional District Judge (I), Faridabad (lower Appellate Court) and upheld the decision of the Ld. Additional Civil Judge (Senior Division), Faridabad (Trial Court) Order dated 29.03.1966.

ii) The Appellant, a Property Developer, had the layout plan of Ashoka Enclave Extension, Part-III approved in 1961. In 1963, the Appellant invited public applications for the sale of Plots at Rs.25/- per square yard. The Respondent provisionally booked Plot No. 103 by paying Rs. 500/- and Rs. 950/- on 01.11.1963 and 09.11.1963, respectively.

iii) Thereafter, despite the condition requiring 25% earnest money, the earnest money was not paid by the Respondent initially, and subsequent payments were also delayed. The area came under the Controlled Area due to the Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act, 1963 enacted on 22.11.1963.

iv) After several developments and delays, the Appellant offered a new plot to the Respondent at Rs. 135 per square yard in 1982. The Respondent requested details about the new offer, including the size of the plot and adjustments for the earnest money paid. The Appellant did not respond to these queries. Subsequently, the Respondent issued a Legal Notice, and when the Appellant did not respond, a Civil Suit for Specific Performance was filed in 1986.

v) The predecessor-in-interest of the Respondent (hereinafter described as ‘the Respondent’) filed a Suit for Specific Performance of the Contract, which was initially decreed by the Trial Court. However, the lower Appellate Court later reversed the decision, directing the refund of earnest money along with interest instead of execution of the Sale Deed. The High Court ultimately upheld the Trial Court’s judgment after setting aside the decision of the lower Appellate Court.

vi) The Appellant argued that the Contract was frustrated due to developments over the years, offering an alternative plot in 1982. The Respondent asserted that the Appellant did not provide necessary details, and the High Court rightly upheld the Trial Court’s judgment. The Appellant was ordered to register the Sale Deed.

vii) The Respondent, feeling dissatisfied, filed a Civil Suit for Specific Performance of the Contract with the Additional Civil Judge (Senior Division). The Trial Court vide Order dated 29.03.1966, made the following observations, while deciding the Suit:

TRIAL COURT FINDINGS:

I) The Trial Court initially decreed the Suit for Specific Performance of the Contract filed by the predecessor-in-interest of the Respondents (Plaintiff). The Court directed the execution of the Sale Deed, affirming the claim of the Plaintiff.

II) The Trial Court found that the Appellant, a Property Developer, had approved the layout plan of Ashoka Enclave Extension, Part-III in 1961. The Trial Court determined that the Respondent had requested details about the new offer, including the size of the plot and adjustments for the earnest money paid.

III) However, the Court observed that the Appellant did not respond to these queries. Subsequently, the Respondent issued a Legal Notice, and when the Appellant did not respond, a Civil Suit for Specific Performance was filed in 1986, within the period of limitation.

IV) The Trial Court rejected the Appellant’s argument that the Contract was frustrated due to developments over the years, emphasizing that the Appellant offered an alternative plot in 1982. The Court concluded that the Respondent was entitled to specific performance, and the Appellant was ordered to register the Sale Deed as per the original terms.

APPELLATE COURT:

Aggrieved by the Order dated 29.03.1966 of the Trial Court, the Appellant filed an Appeal Case No. 342 of 1986 before the Ld. Additional District Judge (I), Faridabad (Appellate Court), where the Appellate Court reversed the Judgment and Decree of the Trial Court, vide Order dated 07.08.1988, on the ground that the Trial Court made an erroneous application of evidence produced on record. However, the Appellate Court granted relief of refund of earnest money paid by the Respondent.

HIGH COURT FINDINGS:

Aggrieved by the Order dated 07.08.1988 of the Appellate Court, the Respondent filed Regular Second Appeal No. 2956 of 1998 before the Hon’ble Punjab and Haryana High Court, thereby challenging the Appellate Court Order that reversed the Trial Court Order dated 29.03.1966.

(a) The High Court, upon reviewing the case, set aside the judgment and decree of the Appellate Court, which had reversed the well-reasoned judgment and decree of the Trial Court on the ground that the Appellate Court made an erroneous appreciation of evidence produced on record and reinstated the decision of the Trial Court. The High Court affirmed the findings of the Trial Court in favor of the Plaintiff seeking specific performance of the Contract.

(b) The High Court noted that the Trial Court had correctly decreed the Suit, directing the execution of the Sale Deed. The Court emphasized that the Appellant, a Property Developer, had approved the layout plan of Ashoka Enclave Extension, Part-III in 1961.

(c) Thereafter, addressing the developments over the years, including the enactment of the Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act, 1963 (1963 Act) and the Haryana Restriction of Development and Regulation of Colonies Act, 1971 (1971 Act), the High Court observed that the Appellant had offered alternative plot to Respondent in 1982 at ₹135 per square yard.

(d) The Hon’ble Court highlighted the Respondent’s request for details about the new offer, including the size of the plot and adjustments for the earnest money paid, and noted that the Appellant did not respond to these queries. The High Court upheld the Trial Court’s decision, directing the Appellant to register the Sale Deed as per the original terms. The findings emphasized the entitlement of the Respondent to specific performance, rejecting the Appellant’s argument that the Contract was frustrated due to developments over the years.

SUPREME COURT FINDINGS:

Aggrieved by the Order dated 02.05.2018 of the High Court, the Appellant filed Special Leave Petition SLP(C) No. 23655-56 / 2018, thereby challenging the High Court Order 02.05.2018.

ISSUES:

A) The primary issue before the Supreme Court in this case was the Appeal against the decision of the High Court. The Appellant, dissatisfied with the judgments of the Trial Court and the lower Appellate Court, sought a review of the case.

B) The Apex Court was tasked with examining the legal validity and correctness of the lower Courts’ decisions, including the Trial Court’s initial decree for specific performance, the subsequent reversal by the lower Appellate Court, and the High Court’s reinstatement of the Trial Court’s judgment.

SUPREME COURT OBSERVATIONS:

1) The Supreme Court acknowledged the contractual background, where the predecessor-in-interest of the Respondents filed a Suit for Specific Performance of the Contract initially decreed by the Trial Court but later reversed by the Appellate Court. The High Court had reinstated the Trial Court’s decision.

2) The Apex Court noted the actions of the Appellant, a Property Developer, in approving the layout plan, inviting public applications in 1963, and the subsequent developments including the enactment of the 1963 Act and the 1971 Act. The Court observed that the Appellant’s offer of alternative plot to Respondent in 1982 was at a different rate.

3) The Supreme Court considered the Respondent’s requests for details about the new offer, including the size of the plot and adjustments for the earnest money paid. It took note of the Respondent’s Legal Notice and the subsequent filing of a Civil Suit for specific performance within the stipulated period of limitation.

4) The Bench recognized the findings of Trial Court, which had initially decreed the Suit, and the subsequent reversal by Appellate Court. The Apex Court observed that the High Court had correctly set aside the decision of Appellate Court and reinstated the judgment of Trial Court, directing the Appellant to execute the sale deed.

5) The Supreme Court addressed and rejected the Appellant’s argument that the Contract was frustrated due to the developments over the years, emphasizing that the Appellant had offered an alternative plot in 1982.

6) Based on the overall assessment of the case, the Apex Court upheld the High Court’s decision, affirming the Trial Court’s Decree for Specific Performance, and directed the Appellant to register the Sale Deed as per the original terms.

CONCLUSION:

Based on the aforementioned grounds, the Supreme Court affirmed the High Court’s decision, rejecting the Appellant’s argument of contract frustration and emphasizing the Respondent’s entitlement to specific performance. The case underscored the significance of adhering to contractual terms and the developer’s responsibility to address reasonable queries. The Apex Court’s rejection of the alternative plot offer in 1982 highlighted the importance of clear communication in real estate transactions.

Hence, the Supreme Court upheld the principles of equity and specific performance and hence, provided a resolution in favor of the Respondent and reinforced the importance of contractual commitments.

 

Sakshi Raghuvanshi

Legal Associate

The Indian Lawyer