Supreme Court: Inequitable to Undo 1979 Sale Executed Under Specific Performance Decree by Ordering Refund Decades Later
The Supreme Court has held that it would be inequitable to unsettle a sale that was executed through the court more than four decades ago pursuant to a decree for specific performance and replace the purchaser’s established ownership with a monetary refund. The judgment came in Sobaran Singh (Dead) Through LRs v. Gordhan Singh (Dead) Through LRs, decided on September 15, 2026.
A Bench of Justices J.B. Pardiwala and K. Vinod Chandran was dealing with a dispute arising from a registered agreement to sell dated June 16, 1975. The agreement concerned around five bighas of agricultural land near Agra, for which the agreed consideration was Rs.20,000. The purchaser had paid Rs.5,000 as advance.
The purchaser instituted proceedings for specific performance after the seller failed to complete the transaction. The trial court, after examining the evidence, decreed specific performance on February 28, 1979. Pursuant to that decree, the sale deed was executed through the court on June 7, 1979, and possession of the property was delivered to the purchaser. He remained in possession thereafter.
The defendant subsequently maintained that the agreement was not genuinely an agreement for sale but had been executed as security for a loan. The trial court rejected that defence and found the agreement to have been proved. It also rejected the argument concerning the applicability of the Urban Land (Ceiling and Regulation) Act, 1976 to the agricultural land involved in the dispute.
The First Appellate Court nevertheless reversed the decree for specific performance, principally finding that the purchaser had failed to establish readiness and willingness. It directed refund of the advance amount with interest.
The matter then reached the High Court in second appeal. Although the High Court upheld findings supporting the genuineness of the agreement, it did not restore the specific-performance decree. Instead, it ordered a refund of Rs.15 lakh with interest, substantially enhancing the monetary relief.
The Supreme Court disagreed with that approach. A critical circumstance, according to the Court’s reasoning, was that the sale had already been executed through the court in 1979 and the purchaser had remained in possession for decades. The case therefore was materially different from one in which a decree for specific performance remained unexecuted and the court was still deciding whether the sale should ultimately take place.
The Court restored the trial court’s decree and protected the purchaser’s title and possession. It also directed that the Rs.15 lakh deposited by the defendant pursuant to the High Court’s order, together with accrued interest, be refunded to the defendant within one month.
The judgment also considered the Supreme Court’s earlier decision in Pratap Lakshman Muchandi v. Shamlal Uddavadas Wadhwa. The Court distinguished that precedent because, in that case, the sale had not already been executed. Here, by contrast, the court itself had executed the conveyance decades earlier and possession had followed.
The ruling underscores an important distinction in the law of specific performance: the passage of time can affect the equitable exercise of relief, but a court must also take account of legal rights and transactions that have already been completed pursuant to an operative decree. Once a court-executed sale has resulted in long-standing possession and ownership, substituting the completed conveyance with a later monetary refund raises fundamentally different equitable considerations.
The Supreme Court’s decision therefore restores the legal position created by the 1979 decree rather than permitting a later court to effectively undo the completed conveyance through an enhanced refund. The case is reported as Sobaran Singh (Dead) Through LRs v. Gordhan Singh (Dead) Through LRs, Civil Appeal No. 12945 of 2026, with neutral citation 2026 INSC 1005.
