2010 (7) TMI 1182 - SC - Indian Laws

Summary

Issues Involved:
1. Specific Performance of Contract
2. Refund of Earnest Money
3. Legal Bar due to Mortgage and Permissions
4. Increase in Market Value of Property
5. Discretion of Court in Granting Specific Performance

Summary:

1. Specific Performance of Contract:
The Trial Court partially decreed the suit for specific performance, ordering a refund of Rs. 10,000 with interest. The First Appellate Court decreed the suit entirely, granting specific performance upon obtaining necessary permissions u/s 12(c) of the Maharashtra Re-settlement of Project Displaced Persons Act, 1976, and u/s 47(2) of the Maharashtra Cooperative Societies Act, 1960. The High Court upheld this decree. The Supreme Court affirmed the findings, noting that the respondent was always ready and willing to perform her part of the contract and had paid Rs. 10,000 as earnest money.

2. Refund of Earnest Money:
The Trial Court directed the appellants to refund Rs. 10,000 with 6% interest per annum. The First Appellate Court set aside this decree and granted specific performance instead. The Supreme Court upheld this decision, emphasizing that the respondent had satisfied all requirements for specific performance.

3. Legal Bar due to Mortgage and Permissions:
The appellants contended that the property was mortgaged to a cooperative society, and thus, no title could be passed. The Supreme Court noted that no specific evidence was provided by the appellants to substantiate this claim. The Court held that the restriction u/s 48(d) of the Societies Act is conditional and can be overcome by repaying the loan. The Court also noted that the appellants failed to prove that the property was under any legal bar due to the Re-settlement Act.

4. Increase in Market Value of Property:
The appellants argued that the land's value had increased, making it unjust to pass a decree for specific performance. The Supreme Court dismissed this argument, stating that the increase in land value is not a valid ground to deny specific performance. The respondent's offer to pay Rs. 1,50,000 instead of Rs. 40,000 as the total sale consideration was deemed fair by the Court.

5. Discretion of Court in Granting Specific Performance:
The Supreme Court emphasized that the discretion to grant specific performance lies with the Court and must be exercised based on equitable principles. The Court found that the respondent met all conditions for specific performance and that the appellants' defense was not credible. The Court directed the respondent to pay Rs. 1,50,000, and upon payment, the sale deed should be registered in favor of the respondent.

Conclusion:
The Supreme Court dismissed the appeal, upholding the decree for specific performance with the modification that the respondent would pay Rs. 1,50,000 as the total sale consideration. The parties were directed to bear their own costs.