Case Name: SANGITA SINHA vs. BHAWANA BHARDWAJ AND ORS.
Case Number: CIVIL APPEAL NO. 4972 OF 2025
Date: 4 APRIL, 2025
Quorum: JUSTICE DIPANKAR DATTA, JUSTICE MANMOHAN
FACTS OF THE CASE
The case centers on an issue regarding specific contractual performance of an unsigned agreement that concerns the sale of fixed real estate properties. Through a registered sub-lease, the People’s Cooperative House Construction Society Limited gave the subject property to Late Kushum Kumari. A total of ₹25 lakh served as the complete sale consideration when the defendant entered into an unregistered Agreement to Sell with the respondent-buyer (plaintiff) during 2008. The agreement’s execution received ₹2,51,000 cash payment from the buyer while he submitted three post-dated cheques worth ₹7,50,000. The seller’s tenants created such a scene that they compelled the buyer and her husband to leave the property after their arrival. The seller refused to fulfill his obligation for executing a sale deed after the agreement. A suit was filed by the buyer at the Trial Court through the Specific Relief Act of 1963 to enforce the Agreement to Sell. The Trial Court initially granted victory to the buyer who succeeded in maintaining her position through a Patna High Court appellate ruling. The seller’s legal representatives moved to the Supreme Court due to their dissatisfaction about the relief granted.
ISSUES
- Whether specific performance can be applied for unregistered agreements to sell.
- Whether the respondent-buyer exhibits continuous readiness and willingness to execute her contractual obligations.
- Whether the buyer was properly allowed to request specific performance of the Agreement to Sell after a valid cancellation occurred before the lawsuit was filed.
- Whether suppression of material facts by the buyer in the plaint disentitled her from equitable relief.
LEGAL PROVISIONS
- Specific Relief Act, 1963, Sections 10 and 20 (pre-2018 amendment)
- Indian Contract Act, 1872
- The Registration Act, 1908
ARGUMENTS
APPELLANT’S CONTENTION:
The seller Late Kushum Kumari signed a termination document before the buyer took any legal action regarding specific performance of the Agreement to Sell that had been executed in 2008. The purchasers presented evidence through a letter from the seller dated 7th February 2008 that contained refund demand drafts and two out of the three post-dated cheques. According to the sellers, the cancellation acted as a jurisdictional fact which prevented the buyer from filing a suit seeking specific performance because the cancellation remained undisputed.
During the proceedings the sellers stated the buyer intentionally failed to reveal this material information included in her original statement. Part of the information revealed the cancellation letter combined with refund drafts remained concealed thus representing hiding essential details. Accorded by the court the discretionary nature of specific performance prevents buyers from obtaining this remunerative order once they suppress material facts.
The respondents pointed out that the respondent-buyer’s action of encashing the demand drafts established firm acceptance of the termination. The actual intention of the buyer to enforce the agreement would have involved either draft returns or litigative action against cancellation yet she opted for the refund instead. Through her actions she demonstrated that she would not fulfill her contractual obligations.
The lawyers maintained that the follow-through payment with cancellation of the agreement left no enforceable final contract. The court declared that the following legal action without declaratory relief procedures and full facts disclosure rendered the suit invalid.
RESPONDENT’S CONTENTION
According to the respondent-buyer the Agreement to Sell stood as a valid and binding contract but the seller improperly refused to execute the sale deed. She emphasized her actions to fulfill the contractual terms by providing the entire purchase cost and securing the sale deed registration.
The buyer asserted that the cancellation procedure from the seller was not genuine because it aimed at evading contractual obligations. She strongly refuted that she would accept the termination of the contract while showing that seller opposition led by tenant interference proved to be in bad faith.
The buyer documented her stance that drafting out demand drafts alone did not serve as acceptance of cancellation or it might have happened unexpectedly or would not eliminate her primary contractual rights. She requested the Court to take an integrated approach to the deal by showing how she had acted in a performance-compatible way while the seller broke his contractual commitment.
The buyer maintained before the court that the Trial Court and High Court displayed correct judgment when determining the validity of the agreement. The appeal should be dismissed according to her argument because the non-registered agreement did not prevent specific performance.
ANALYSIS
The Supreme Court paid in-depth attention to the ongoing state of readiness and willingness by parties to perform their part because Section 10 of the Specific Relief Act demands it as a condition for relief. To meet the requirements of Section 10 of the Specific Relief Act plaintiff needs continuous readiness and willingness to perform from the time of filing through the entire duration of the court proceedings. When the buyer cashed the demand drafts while sending a cancellation letter it proved she did not maintain genuine performance intentions toward the agreement. The court established that the buyer’s real intent to carry out the purchase would have led her to dismiss the returned money payments.
At the time of filing the suit the seller had already canceled the agreement on 7 February 2008. The written letter of cancellation remained unchallenged and without any attempt for nullification by the buyer who did not pursue declaratory relief. The Court demonstrated its belief that the buyer purposely omitted to reveal the cancellation letter and enclosed cheques through her legal submission.
The Court denied specific performance because of the buyer’s deceitful actions combined with his unwarranted conduct.
JUDGMENT
The Supreme Court accepted the appeal and rolled back the Trial and Patna High Court decisions and concluded that specific performance should not be granted to the respondent-buyer. The court invalidated the sale deed which the buyer received through its decision. The Supreme Court awarded the court-deposited remaining sale money of ₹24,61,000 to the buyer while ordering the appellant to make this return. The Court confirmed through this decision that parties seeking equitable remedies need to maintain transparency by disclosing relevant facts because nondisclosure justifies denial of equitable remedies even when they would otherwise possess prima facie contractual rights.
CONCLUSION
The Supreme Court’s decision stands as a discretionary remedy that requires the plaintiff to maintain transparency and show good faith. Unregistered agreements will be enforceable when the plaintiff demonstrates steady readiness and willingness to perform while keeping all material facts transparent to the court. The buyer received money back from the seller while failing to reveal the agreement termination which led to defeat of her claim. This ruling emphasizes the necessity of both complete openness and continued willingness along with legal care needed by parties who seek real estate equitable relief.
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WRITTEN BY RIMPLEPREET KAUR
