Case Note & Summary
The dispute arose from a civil appeal concerning a contract for the sale of a plot of land between the appellant, a land development company, and the respondent, who sought specific performance of the contract. The respondent's predecessor had booked a plot in 1963 but faced delays due to regulatory changes and lack of development. The appellant had offered an alternative plot in 1982 at a higher price, which the respondent did not accept due to lack of information regarding additional costs. The respondent filed a suit for specific performance in 1986, which was decreed by the Trial Court but reversed by the lower Appellate Court. The High Court restored the Trial Court's decree, leading to the present appeal. The appellant contended that the contract was frustrated and offered to refund the earnest money, while the respondent argued that the delay was attributable to the appellant. The court analyzed the history of the case, including the respondent's payments and the appellant's failure to provide necessary information. Ultimately, the court modified the High Court's order, directing the appellant to pay ₹ 50,00,000 as full and final settlement instead of registering the sale deed at the original rate, to be paid within three months.
Headnote
A) Contract Law - Specific Performance - Frustration of Contract - Specific Performance of Contract - The appellant's argument that the contract was frustrated due to the passage of time was rejected as the respondent had not refused the offer made by the appellant. The court held that the appellant was liable to pay damages instead of merely refunding the earnest money after a long delay, considering the increase in land prices over the years. (Paras 10-12).
Issue of Consideration
Whether the appellant was liable to register the sale deed or refund the earnest money with interest.
Final Decision
The court modified the High Court's order, directing the appellant to pay ₹ 50,00,000 as full and final settlement of the claim instead of registering the sale deed at ₹ 25 per square yard, to be paid within three months.
Law Points
- Specific performance
- refund of earnest money
- frustration of contract
- limitation period
- damages
