The Supreme Court affirmed the executability of a warrant of possession, ruling that a party who receives substantial monetary compensation in lieu of specific performance cannot retain possession of the property. The Court held that equity prevents unjust enrichment and that execution proceedings exist to enforce judgments, not to facilitate windfalls for unscrupulous litigants.
Facts Of The Case:
On 12.06.1989, the defendants agreed to sell a property to the plaintiff for ₹14,50,000, with ₹25,000 paid as earnest money. Possession of the vacant ground floor was handed over to the plaintiff. In 1990, the plaintiff first filed and withdrew a suit for permanent injunction. Subsequently, in June 1990, the plaintiff filed a suit for specific performance, which was decreed by the Trial Court in 2009. This decree was upheld through the first and second appeals. However, in 2025, the Supreme Court allowed the defendants’ appeal, holding the specific performance suit was barred under Order II Rule 2 of the CPC. While dismissing the suit, the Supreme Court moulded equitable relief, directing the defendants to pay the plaintiff ₹2,00,00,000 within three months in lieu of the 1989 earnest money. The defendants tendered this sum via fixed deposits, but the plaintiff refused to accept it and continued to retain possession. Consequently, the defendants initiated execution proceedings. The Executing Court ordered the issuance of a warrant of possession, which was upheld by the High Court, leading to the plaintiff’s appeal before the Supreme Court.
Procedural History:
The procedural history of this litigation is extensive. The plaintiff’s initial suit for permanent injunction (Civil Suit No. 44 of 1990) was dismissed as withdrawn in 1990. Subsequently, a suit for specific performance (Civil Suit No. 55 of 1990) was decreed by the Trial Court in 2009, an order upheld by the First Appellate Court in 2013 and the High Court in 2022, with a review petition dismissed later that year. The defendants’ appeal to the Supreme Court succeeded in April 2025, resulting in the dismissal of the specific performance suit but with an award of ₹2 crores as equitable compensation. When the plaintiff refused the tender, execution proceedings commenced. The Executing Court ordered a warrant of possession in August 2025, a decision affirmed by the High Court in revision in September 2025, leading to the final appeal before the Supreme Court, which was dismissed in October 2025.
READ ALSO:Supreme Court Upholds Conviction in Karnataka Murder Case: Why Witness Testimony Beat Medical Evidence
Court Observation:
The Supreme Court made critical observations on equity, unjust enrichment, and the role of execution proceedings. It held that a party receiving extraordinary monetary compensation in lieu of specific performance, amounting to 800 times the original earnest money, cannot be permitted to retain possession of the property. The Court emphasized that equity is not a tool for unjust enrichment and that the purpose of execution is to enforce judgments, not to underwrite windfalls for litigants. It further rejected the appellant’s claim of a right to retain possession under Section 53A of the Transfer of Property Act, stating that such a claim, rooted in the now-dismissed agreement, was extinguished by the compensatory award. The Court also invoked the maxim actus curiae neminem gravabit (an act of the court shall prejudice no one) to rectify its own inadvertent omission in not expressly ordering the handing over of possession, thereby ensuring no party suffered from the court’s error.
Final Decision & Judgement:
The Supreme Court dismissed the appeal, upholding the orders of the Executing Court and the High Court directing the issuance of a warrant of possession with police assistance. The Court imposed costs of ₹10,00,000 on the appellant, payable to the respondents within four weeks, with 12% annual interest in case of default. It ruled that the appellant, having been awarded ₹2 crores as equitable compensation after the dismissal of the specific performance suit, had no legal right to retain possession of the property. Retaining both the compensation and possession would constitute unjust enrichment. The execution proceedings were thus justified to give effect to the court’s judgment and ensure the respondents regain possession.
Case Details:
Case Title: Prem Aggarwal versus Mohan Singh & Ors. Appeal Number: (Arising out of SLP(C) No. 26593 of 2025) Date of Judgement: October 07, 2025 Judges/Justice Name: Justice Vikram Nath and Justice Sandeep Mehta