[2022] 18 S.C.R. 65

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65
DESH RAJ & ORS.
v.
ROHTASH SINGH
(Civil Appeal No. 9217 of 2022)
DECEMBER 14, 2022
[SURYA KANT AND BELA M. TRIVEDI, JJ.]
Contract Act, 1872: s. 55, 74 – Specific Relief Act - s. 22 –
Specific performance of agreement - Effect of failure to perform at
fixed time, in contract in which time is essential – Refund of earnest
money – Appellants, joint owners of their respective share in the
property entered into separate sale agreement with the respondent
– As per the agreements, the earnest money could be confiscated by
the appellants if the sale deed was not executed on prescribed date
– Respondent made a part payment towards the sale as earnest
money – Respondent was liable to secure necessary No Objection
Certificates and intimate the appellant before the date of execution
failing which the agreement was deemed to be cancelled – Appellant
was to obtain the permission under the HMGA and they obtained
the same and appeared before the sub-registrar on the date of
execution, however, the respondent failed to appear for execution
of the sale deed as also on the extended date – Appellant forfeited
the earnest money and treated the sale deed as cancelled –
Respondent then filed a suit for specific performance of the contract
– During pendency, the State Government initiated acquisition
proceedings and acquired the said property – Trial court holding
that both the parties were equally responsible for rendering sale
agreements as unenforceable, and that the sale agreements were
either way rendered impossible to perform in view of the land
acquisition proceedings, granted a decree of recovery of earnest
money to the respondent, along with requisite interest – First
appellate court and High Court upheld the same – On appeal, held:
Sale Agreements clearly indicate the intention of the parties to treat
time-bound performance as an essential condition – There was an
undue delay on behalf of the respondent to institute the suit, the
relief of specific performance cannot be granted – Respondent led
   [2022] 18 S.C.R. 65
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SUPREME COURT REPORTS
[2022] 18 S.C.R.
no evidence to indicate that he took any proactive steps to obtain
the purported NOC necessary to execute the sale deed – Plea of
non-corporation against the appellants in respect of obtaining the
NOC not made out by the respondent – Furthermore, no such NOC
was required in the first place as the property was agricultural land
on the date of execution – Respondent failed to prove that the
appellants were willfully avoiding the performance of their contract
– Further, as respondent did not pray for refund of earnest money
in original plaint, the court cannot suo moto grant the refund of
earnest money – Forfeiture of earnest money by appellants was
justified and within the confines of reasonable compensation as
per s. 74 of Contract Act since the nature of forfeiture was never
contested by the respondent and the respondent never prayed for
the refund of earnest money – Sale agreements should have been
rightly held to be terminated instead of being declared impossible
to perform – Thus, the judgments of courts below side aside and
suit is dismissed – Hindu Minority and Guardianship Act, 1956 –
Haryana Development and Regulation of Urban Areas Act, 1975.
Satish Batra v. Sudhir Rawal (2013) 1 SCC 345 :
[2012] 9 SCR 662; Fateh Chand v. Balkishan Dass
[1964] 1 SCR 515; Citadel Fine Pharmaceuticals v.
Ramaniyam Real Estates Private Ltd. (2011) 9 SCC
147 : [2011] 13 SCR 605; Saradamani  Kandappan v.
S. Rajalakshmi (2011) 12 SCC 18 : [2011] 8 SCR 874;
Kailash Nath Associates v. DDA (2015) 4 SCC 136 :
[2015] 1 SCR 627; ONGC Ltd. v. Saw Pipes Ltd.
(2003) 5 SCC 705 : [2003] 3 SCR 691 - referred to.
Case Law Reference
[2012] 9 SCR 662
referred to
Para 17
[1964] 1 SCR 515
referred to
Para 18
[2011] 13 SCR 605
referred to
Para 23
[2011] 8 SCR 874
referred to
Para 23
[2015] 1 SCR 627
referred to
Para 35
[2003] 3 SCR 691
referred to
Para 35

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CIVIL

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