Indian contract law - The Legal Chamber

Supreme Court: Decree for Specific Performance Does Not Create Title, So Assignment Deed Need Not Be Registered

6Feb

By The Legal ChamberNo Comments

Supreme Court

Supreme Court: Decree for Specific Performance Does Not Create Title, So Assignment Deed Need Not Be Registered

The Supreme Court held that a deed assigning a decree for specific performance of a sale agreement concerning immovable property does not require mandatory registration under Section 17(1)(e) of the Registration Act, 1908. This is because such a decree does not itself create, assign, or extinguish any right, title, or interest in the immovable property; it merely confers a right to seek performance through court execution. Facts Of The Case: The appellants are the legal heirs of a judgment-debtor against whom an ex-parte decree for specific performance of a sale agreement concerning immovable property was passed on 13.09.1993. The first respondent, Shanmugam, claimed to be the assignee of this decree by virtue of an assignment deed dated 17.07.1995. In 2004, the assignee filed an e...

Supreme Court Upholds Decree for Specific Performance; Unilateral Cancellation Not Permitted

30Jan

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Upholds Decree for Specific Performance; Unilateral Cancellation Not Permitted

The Supreme Court upheld the decree for specific performance, ruling that a suit for specific performance is maintainable without a declaratory relief against a unilateral termination when the agreement is not determinable in nature. The subsequent purchasers were held not to be bona fide purchasers for value without notice under Section 19(b) of the Specific Relief Act, 1963. Facts Of The Case: On 28.04.2000, the original vendors executed an unregistered Agreement to Sell (ATS) in favour of the original vendees for agricultural land in Karnataka. The vendees paid a substantial part of the consideration and performed their obligations, including getting the land converted and tenants relocated. In 2003, the original vendors issued a unilateral termination notice citing pending litigation...

Specific Performance Suit Fails: Supreme Court Explains Why Buyer Must Vacate Despite Long Possession

4Dec

By The Legal ChamberNo Comments

Supreme Court

Specific Performance Suit Fails: Supreme Court Explains Why Buyer Must Vacate Despite Long Possession

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 ...

Supreme Court Rules on Power Theft: Generator Must Pay Full Compensation for Diverted Electricity

19Nov

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Rules on Power Theft: Generator Must Pay Full Compensation for Diverted Electricity

In a significant ruling, the Supreme Court clarified that compensation for wrongful diversion of electricity under a Power Purchase Agreement is distinct from the reimbursement of fixed charges. The Court held that the beneficiary is entitled to both remedies concurrently, reinforcing the 'proportionate principle' and preventing unjust enrichment by the power generator. Facts Of The Case: The dispute originated from a 1996 Power Purchase Agreement (PPA) between Gujarat Electricity Board (GEB, later GUVNL) and Essar Power Limited (EPL). EPL's plant had a total capacity of 515 MW, with 300 MW allocated to GEB and 215 MW to its sister concern, Essar Steel Limited (ESL). The core issue arose when EPL began supplying more power to ESL from GUVNL's allocated 58% share, violating the ag...

Supreme Court Denies Specific Performance Over Tainted Agreement: Readiness to Pay Not Enough

23Sep

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Denies Specific Performance Over Tainted Agreement: Readiness to Pay Not Enough

The Supreme Court upheld the denial of specific performance, ruling that a material alteration in the sale agreement—visibly apparent from the use of different ink for a property's description—vitiated the contract. Courts are not always obligated to seek expert opinion under Section 73 of the Evidence Act when such an alteration is plainly discernible upon a mere perusal of the document itself. Facts Of The Case: The plaintiff-appellant, Syed Basheer Ahmed, entered into a sale agreement dated July 15, 1984, with the first defendant for the purchase of two properties: Item No. 1 (owned by the first defendant) and Item No. 2 (owned by a third party). The total agreed consideration was Rs. 56,000/-, with an advance of Rs. 1,000/- paid. The agreement stipulated that the sale deed was to be ...

Supreme Court Upholds Specific Performance: Land Sale Agreement Enforced After 24 Years

8Aug

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Upholds Specific Performance: Land Sale Agreement Enforced After 24 Years

The Supreme Court upheld the decree for specific performance of a 2001 land sale agreement, ruling that the plaintiffs proved readiness and willingness under the Specific Relief Act, 1963. It nullified subsequent fraudulent sales under Section 52 of the Transfer of Property Act (lis pendens) and affirmed the court’s power to grant possession under Section 22 despite omitted pleadings. The judgment emphasized that mere price escalation cannot deny equitable relief and imposed an additional ₹25 lakh payment to balance interests. Collusive transactions were declared void, reinforcing protections against pendente lite transfers. Facts Of The Case: In 2001, Krishan Gopal (appellant) agreed to sell 9 acres of agricultural land in Punjab to Gurmeet Kaur and her two sons for ₹10 lakh under an Ag...

Legal Heir or Tenant? : Supreme Court Decides on Protracted Property Battle in Kerala

7Jun

By The Legal ChamberNo Comments

Supreme Court

Legal Heir or Tenant? : Supreme Court Decides on Protracted Property Battle in Kerala

The Supreme Court dismissed an appeal challenging the impleadment of a party in execution proceedings, holding that the application for deletion was barred by res judicata as objections were not raised earlier. It ruled that a decree for specific performance implicitly includes possession unless contested by a third party. The Court rejected claims of tenancy rights under the Kerala Rent Control Act due to lack of evidence and upheld the lower courts' findings, emphasizing that frivolous pleas cannot delay execution. Costs of ₹25,000 were imposed for protracting litigation. The Executing Court was directed to ensure possession is handed over within two months Facts Of The Case: The case originated from a 1996 agreement to sell between the original plaintiff (Prakasan) and defendant (Jame...