Merely Refunding Earnest Money After 60 Years Unreasonable: SC Disposes Appeal Arising Out Of Specific Performance Suit Filed In 1986
The Supreme Court, while disposing an appeal arising out of a suit for specific performance, observed that simply refunding the earnest money after sixty years is insufficient compensation for the aggrieved Buyer.
The Court ordered the developer to pay the Buyer a lump sum of ₹50,00,000/- in compensation for the substantial delay and significant land value appreciation that took place over the six decades.
The Bench comprising Justice Vikram Nath and Justice Rajesh Bindal observed, “Merely refunding the earnest money paid, after sixty years will be unreasonable as the respondent, after booking the plot, has been waiting all along as even in the litigation since 1986. The price of the land in the area has increased manifold for the last sixty years”.
Advocate Gaurav Sharma appeared for the Appellant and Advocate Umang Shankar appeared for the Respondent.
The Respondent applied for a plot of land in 1963, which was delayed in development due to government regulations. In 1982, the Appellant offered an alternative plot at a higher price, and the Respondent sought more information but received no response. The Respondent demanded the original plot at the agreed price, but the Appellant refused. The Respondent then filed a suit for specific performance. The Trial Court ruled in favour of the Respondent, but the Appellate Court overturned the decision. The High Court later restored the Trial Court's judgment. Aggrieved, the Appellant approached the Supreme Court by way of a Civil Appeal challening the judgment of the High Court.
The Court noted that the Respondent had claimed adequate damages, including a refund of the earnest money along with interest. The Court observed that the refund of the original earnest money after sixty years is insufficient compensation for the Respondent.
Taking into account all the facts of the case, the Court modified the High Court's judgment. Instead of ordering the sale deed to be registered at ₹25/- per square yard, the Court directed the Appellant to pay a lump sum of ₹50,00,000/- to the Respondent as full and final settlement of the claim within three months.
Accordingly, the Court disposed of the Appeal.
Cause Title: M/S Greater Ashoka And Land Development Company v Kanti Prasad Jain (Deceased) Through Lrs (2023 INSC 1055)
Appearance:
Appellant: Advocates Dhawal Mohan, Prateek Bhatia, Paranjay Tripathi, Ankita Dogra.
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