The Supreme Court has held that once a decree for specific performance of an agreement to sell has culminated in execution of the sale deed and delivery of possession, the completed transaction cannot be undone by substituting it with an enhanced monetary refund merely to "settle equities".

A bench of Justice JB Pardiwala and Justice K Vinod Chandran made the observation while restoring a 1979 Trial Court decree for specific performance concerning around five bighas of agricultural land near Agra.

The dispute arose from a registered agreement to sell dated June 16, 1975, under which approximately five bighas of agricultural land was agreed to be sold within two years for ₹20,000, with ₹5,000 paid as advance by the Appellant-plaintiff.

The Trial Court decreed specific performance on February 28, 1979. Pursuant to that decree, the sale was executed through the Court on June 7, 1979. The plaintiff was also stated to have remained in possession of the property since 1979.

The First Appellate Court had reversed the decree on the ground that there was no material showing the plaintiff's readiness and willingness.

The Allahabad High Court, while entertaining the second appeal, found that the Trial Court was correct in its findings concerning the agreement and the defendant's defence. But, instead of restoring the sale, the High Court tried to "settle equities" by directing the Respondent-defendant to pay the Appellant-plaintiff ₹15 lakh (instead of the ₹5,000 advance) with interest, because so many years had passed.

Setting aside the concurrent findings of the First Appellate Court and High Court, the Supreme Court found the High Court's approach to be unsustainable, which had replaced the completed sale with a money payment, just because time had passed.

Instead, the Court said that since the sale was already completed in 1979 and the Appellant-plaintiff had owned and possessed the land for more than four decades, the equity must favour the plaintiff because he had paid the money more than four decades ago and had obtained ownership and possession.

“Equity, hence, has to be applied in favour of the plaintiff who parted with Rs.20,000/- more than four decades and a half back, and obtained the ownership and possession of the property.”, the Court said.

“We are, hence, of the opinion that the decisions of the First Appellate Court and the High Court are to be reversed and that of the Trial Court restored. We do so allowing the appeal and restoring the order of the Trial Court. The plaintiff's possession at this juncture cannot be interfered with. The defendant has deposited a sum of Rs.15,00,000/- after the High Court judgment has come, which will be refunded to the defendant itself with any interest accrued thereon, within a period of one month.”, the Court held.

In terms of the aforesaid, the appeal was allowed.

Cause Title: Sobaran Singh (Dead) Through Lrs. Versus Gordhan Singh (Dead) Thr. Lrs.

Citation : 2026 LiveLaw (SC) 962

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Appearance:

For Petitioner(s) : Mr. Shyam Kishore Sharma, Sr. Adv. Mr. Smarhar Singh, AOR Mr. Pankaj Prakash, Adv. Ms. Shweta Kumari, Adv. Mr. Mohd Asim, Adv. Ms. Prerna Singh, AOR

For Respondent(s) : Jetendra Singh, Adv. Vijendra Kumar Kaushik, Adv. Kalpana Sabharwal, Adv. Priyanka Singh, Adv. Ashutosh Parashar, Adv. Ms. Manju Jetley, AOR Ankit Tiwari, Adv.