Seller entitled for Compensation in case unduly delay by purchaser : Supreme Court

By | November 2, 2015

while dealing with a matter pertaining to specific performance of an agreement for sale of property, it was held that if the purchaser is entitled to claim compensation for deterioration, a fortiori the vendor should also be entitled to compensation for accretion in value of the subject matter of the agreement for specific performance, in case the execution thereof is unduly delayed by the purchaser.


Rajinder Kumar v. Shri Kuldeep Singh & Others

[Civil Appeal No. 1873 of 2014],

7th February, 2014


Facts of the case :-

The agreement for sale was executed by the appellants  on 30.07.1980. They received part of the consideration, viz., Rs. 1,40,000/- as earnest money. Possession of part of the agreement schedule property, a garage was parted with. The balance Rs.12,60,000/- was to be paid at the time of execution of the sale deed. That deed could have been executed only after obtaining permission from the L&DO, Delhi. As per the agreement, it was for the vendors to obtain that permission from the L&DO on paying the unearned increase. There were certain other obligations as well. That the vendors actually intended to sell the property is clear from the fact that they had approached the L&DO and the L&DO gave permission on 12.11.1981, subject to payment of an amount of Rs.7,17,330/-. The unearned increase came to be such a large amount only because of the delay caused by the purchaser in getting his power of attorney, it is alleged. The amount was not deposited by the vendors even during the time extended by the L&DO.

In the meanwhile, Rajinder Kumar (petitioner in SLP (Civil) No. 19215 of 2011) claiming to be the minor son of Din Dayal, filed a suit on 15.12.1981 attacking the agreement, claiming his 1/24th share and for other reliefs.

The purchaser-Kuldeep Singh on 10.01.1982 filed OS No. 1428 of 1981 on the original side of the High Court for specific performance.

The suit was decreed ex parte on 30.04.1984 in favour of Purchaser.

Though the decree is dated 30.04.1984, the execution petition was filed only after six and a half years, on 07.11.1990 by the Purchaser.

Meanwhile, on 24.04.1999, some of the appellants filed an application under Section 28 of Specific Relief Act,1963 for rescission of the agreement.

It was also contended that between the date of decree in 1984 and the date of filing the Application for rescission, even the notified rates in land value shot up from Rs.2,000/- per square yard to Rs.13,860/- per square meter and the unearned increase would be around Rs.50,00,000/- and, thus, it would be highly unjust, unconscionable and inequitable to compel the vendors to make the payment of the unearned increase. It was also averred that the vendors were prepared to pay a reasonable compensation to the purchaser.

The purchaser-Kuldeep Singh in response to the Application for rescission, stated that the court had not fixed any time for deposit of the balance amount, the balance amount was payable only on the execution and registration of the conveyance deed. He also contended that execution was possible only on permission from the L&DO on payment of unearned increase by the vendors and for which the vendors are at fault in not having taken any serious steps in completing their obligations under the decree; and that the purchaser had always been ready and willing to perform his part of the agreement.


The ultimate question that has now to be considered is: whether the plaintiff should be held to be entitled to a decree for specific performance of the agreement of 22-12-1970?

The long efflux of time (over 40 years) that has occurred and the galloping value of real estate in the meantime are the twin inhibiting factors in this regard

The circle rate of the residential property based on which the unearned increase is calculated by the L&DO, would show a sharp increase during the period. Sunder Nagar comes under Category ‘A’ colonies. Under the Delhi Stamp (Prevention of Undervaluation of Instruments) Rules, 2007, the notified circle rate for Category ‘A’ colonies

from July 2007 was Rs.43,000/- per square meter and

from February 8, 2011, it was Rs.86,000/- per square meter.

From November 16, 2011, it was Rs.2,15,000/- per square meter and

from January 5, 2012, it is Rs.6,45,000/- per square meter.

Having regard to the fact that the decree was passed in 1984, we feel that it would be unjust and unfair to relegate the parties to the trial court at this distance of time. For doing complete justice to the parties, we are of the view that it is a case where the purchaser should be directed to pay the land value to the vendors as per the circle rate notified for the residential property in Category ‘A’ colonies prevailing during November 16, 2011 to January 5, 2012, at the rate of Rs.2,15,000/- per square meter. The purchaser shall also be liable to meet the liability arising by way of unearned increase to be paid to the Land and Development Office.

It is also ordered that in case the plaintiff does not deposit the amount to be paid to the vendors within three months from today, the vendors shall deposit in court within two months thereafter the amount calculated as per the circle rate referred to above by way of compensation to be paid to the purchaser, and in which event, they shall stand discharged of their obligations under the contract and the decree

Rajinder Kumar Judgment

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