Property Lawyer: The Supreme Court directs payment of compensation over and above refund of earnest money in specific performance suit.

Supreme Court of India

Justice U U Lalit and Justice Vineet Saran

The SC {VENKITALAKSHMI v. K. RAJU AND ORS.} while dismissing the appeal against the Judgment of the HC refusing to grant specific performance, holds that as against the consideration of Rs.1,19,500/- only Rs.5,000/- were paid as earnest money on 16.07.1980.  It was held that a finding of fact recorded by the High Court was to the effect that the Plaintiff had failed to prove that the time to complete the transaction was extended. It was further held that consequently the theory that time for completion of transaction was extended gets demolished - the argument that there was readiness and willingness on part of the Plaintiff also gets completely weakened. Therefore, it was held that the conclusions arrived at by the High Court are not in any way incorrect to justify interference in jurisdiction under Article 136(1) of the Constitution by the SC. 

It was further held that the fact remains that money amounting to Rs.5,000/- was parted with as early as in July 1980. Therefore, it was held by the SC, in the peculiar facts and circumstances of the present case, ends of justice would be met if the appellants are given some compensation over and above return of the earnest money. The SC directed the respondents to make over a sum of Rs.5 lakhs (Rupees five lakhs) in lieu of return of earnest to the appellants before the SC. In the said case, the trial Court had granted the decree of specific performance, which came to be set aside by the HC - the Judgment of the HC was affirmed by SC, but the direction was passed as aforesaid for paying compensation to the purchaser by the SC.