Tag: Specific Performance

Moratorium Doesn’t Protect Inaction: Supreme Court Upholds Termination of Defaulting Developer’s Agreement
14Feb By The Legal ChamberNo Comments
Supreme Court

Moratorium Doesn’t Protect Inaction: Supreme Court Upholds Termination of Defaulting Developer’s Agreement

This Supreme Court judgment clarifies that validly terminated contracts do not constitute "assets" of a corporate debtor under the IBC, and its moratorium does not revive extinguished rights. It reaffirms that NCLT cannot interfere with terminations based on pre-existing, non-insolvency-related defaults. Furthermore, High Courts retain constitutional jurisdiction to direct statutory authorities, even during moratorium. Facts Of The Case: The dispute originated from a 2005 Development Agreement between Kher Nagar Sukhsadan Co-operative Housing Society and developer AA Estates for redevelopment of a dilapidated Mumbai building declared dangerous under municipal laws. The agreement required completion within 24 months, but the developer failed to meet this timeline. A Supple...
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Supreme Court Rules: Counter-Claim Against Co-Defendant Not Allowed
2Feb By The Legal ChamberNo Comments
Supreme Court

Supreme Court Rules: Counter-Claim Against Co-Defendant Not Allowed

The Supreme Court held that a counter-claim by impleaded defendants against a co-defendant is not maintainable in a suit for specific performance. Such a claim must be incidental to the original suit's cause of action and cannot be independently raised against another defendant. The Court set aside the admitted counter-claim. Facts Of The Case: The appellant, Sanjay Tiwari, filed a suit for specific performance against the first respondent, Yugal Kishore Prasad Sao, based on an alleged oral agreement dated 02.12.2002 for the sale of 0.93 acres of land. The plaintiff claimed full payment was made and he was put in possession. The first defendant, in his written statement, contended that defendants 2 and 3 were in possession of part of the property, making the suit defective for non-joinde...
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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...
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Specific Performance Upheld: Supreme Court Reinstates Decree in Property Dispute
15Jan By The Legal ChamberNo Comments
Supreme Court

Specific Performance Upheld: Supreme Court Reinstates Decree in Property Dispute

The Supreme Court held that the High Court exceeded its jurisdiction under Section 100 CPC by interfering with the first appellate court's findings of fact, particularly regarding additional payment and the plaintiff's readiness and willingness. The Court reiterated that time is not ordinarily the essence in immovable property contracts and that acceptance of further payment post-deadline constitutes a waiver of the right to forfeit earnest money, making the suit for specific performance maintainable without a separate declaratory relief. Facts Of The Case: The appellant, Annamalai, entered into a registered sale agreement dated 08.01.2010 with Saraswathi (D-1) and Dharmalingam (D-2) for two property items. The total consideration was Rs. 4,80,000, of which Rs. 4,70,000 was paid as a...
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Supreme Court Denies Specific Performance for Deal Breaching Construction Laws
27Dec By The Legal ChamberNo Comments
Supreme Court

Supreme Court Denies Specific Performance for Deal Breaching Construction Laws

The Supreme Court held that an agreement mandating construction violating building laws is void and unenforceable. The illegality rendered specific performance impossible under Section 12 of the Specific Relief Act, as the unlawful object was essential to the contract. The Court affirmed that contracts contravening statutory provisions cannot be severed to remove their core illegal purpose. Facts Of The Case: The appellant, Canara Bank, entered into an agreement with the respondent, K.L. Rajgarhia, on 27.12.1984 for the purchase of residential flats to be constructed on a plot in East of Kailash, Delhi. The total consideration was ₹32,07,500, of which approximately 90% (₹28,86,750) was paid upfront. The agreement stipulated the construction and delivery of eight flats and a basement with...
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When a Contract Becomes Void: Supreme Court Explains the Limits of Specific Performance
25Dec By The Legal ChamberNo Comments
Supreme Court

When a Contract Becomes Void: Supreme Court Explains the Limits of Specific Performance

The Supreme Court held that an agreement to sell flats, which was contingent upon construction violating building bye-laws and the master plan, was unlawful and void under Section 23 of the Indian Contract Act. The Court ruled that specific performance cannot be granted for an illegal contract, and courts cannot rewrite or sever its essential, unlawful terms to make it enforceable. Facts Of The Case: In December 1984, Canara Bank entered into an agreement with K.L. Rajgarhia to purchase residential flats to be constructed on his plot in East of Kailash, Delhi, for ₹32,07,500. The bank paid approximately 90% of the consideration upfront. The agreement specified the construction and sale of eight flats and a basement, with completion required within 18 months. When the defendant failed to ...
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Society Cannot Evade Decree by Raising Unauthorized Constructions, Rules Supreme Court
24Dec By The Legal ChamberNo Comments
Supreme Court

Society Cannot Evade Decree by Raising Unauthorized Constructions, Rules Supreme Court

The Supreme Court upheld the enforceability of a cooperative court's decree for specific performance, ruling that subsequent unauthorized constructions and unapproved plot mergers do not render a decree inexecutable. The Court directed the removal of obstructing structures to facilitate the allotment and delivery of vacant possession to the decree-holder, affirming the executability of the award. Facts Of The Case: The appellant, Southern Nagpur Co-operative Society Limited, was directed by the Cooperative Court in a 2000 award to allot Plot No. 5A to its member, respondent Ganpati Yadavrao Kumbhare, a decree upheld in subsequent appeals. During execution proceedings, the appellant society objected, claiming the plot had lost its identity as it was merged with adjoining Plots 4 and 4A in...
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Supreme Court Clarifies: Licensee Must Pay Arrears, Not Liquidated Damages, at Interim Stage
4Dec By The Legal ChamberNo Comments
Supreme Court

Supreme Court Clarifies: Licensee Must Pay Arrears, Not Liquidated Damages, at Interim Stage

In a suit for eviction under a lapsed license agreement, the Supreme Court ruled that the trial court cannot grant liquidated damages as an interim measure under Order XXXIX Rules 1 & 2 CPC. However, it upheld the application of Order XV-A CPC (Bombay Amendment), directing the licensee to pay ascertained arrears and ongoing license fees with annual increments, failing which the defense can be struck off. Facts Of The Case: The case originated from a Leave and License Agreement executed on 08.10.2013 between the appellant licensors and the respondent licensee for 36 months, from 01.11.2013 to 31.10.2016, with a 7% annual increase in license fee. Clause 19 stipulated liquidated damages of Rs. 10,000 per day if the licensee failed to vacate upon expiry. After the license period lapsed, ...
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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 ...
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Fabricated Documents Can’t Validate a Sale, Rules Supreme Court in Insolvency Case
19Nov By The Legal ChamberNo Comments
Supreme Court

Fabricated Documents Can’t Validate a Sale, Rules Supreme Court in Insolvency Case

The Supreme Court held that for a sale by an Official Receiver to be protected under Section 37 of the Provincial Insolvency Act, 1920 upon annulment, the underlying transaction must be valid and attain finality. A transfer based on a fundamentally flawed and fabricated agreement is not a "duly made" disposition and does not survive the annulment of insolvency, requiring the property to revert to the debtor. Facts Of The Case: The case originated from a partnership firm, M/s Gavisiddheshwara & Co. Following the death of partner Singamasetty Subbarayudu, his son (the appellant) was inducted. Due to family indebtedness, the appellant was alleged to have offered his inherited one-anna share for sale via a letter. Respondent Allam Karibasappa claimed to have accepted this offer, assertin...
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