Law: Specific Relief Act, 1877

Section: 12, 22, and 24(b)

Law: Code Of Civil Procedure, 1908.

Section: 35, 1 & 2

Tagline

Specific performance is an equitable and discretionary remedy that requires utmost good faith; where an agreement makes time of the essence, a trial court must not routinely allow a defaulting purchaser (especially a property dealer) to deposit the balance sale consideration months after filing, as doing so unjustly locks up the vendor's property in litigation and facilitates speculative "punting" in the real estate market.

 Summary

1. Context & Case History

The petitioner (Seller/homeowner) entered into an agreement to sell his house in Sector G-11/2, Islamabad, to the respondent (Purchaser/property dealer) for Rs. 1 crore 20 lakhs. The agreement explicitly stipulated that the balance payment of Rs. 60 lakhs had to be paid by a fixed date (28.03.2020), failing which the contract would stand cancelled. The Purchaser defaulted on the payment date.

About 7.5 months after the default, the Purchaser filed a suit for specific performance. The trial court initially directed him to deposit the balance sale price on the date of filing (17.11.2020), but the Purchaser failed to do so. Ten months later, the trial court passed an order (dated 16.09.2021) permitting the Purchaser to deposit the balance sale consideration on the excuse that he was unaware of the earlier order. The Seller, highly aggrieved by this unwarranted indulgence, challenged the order in the High Court.