Summary
The courts below refused specific performance of a1978 property sale solely because the agreement provided double earnest-money repayment without expressly mentioning specific performance. The Court held that this payment secured performance and supplied no alternative right to default. It decreed performance on the purchaser’s undertaking to payRs10crore in view of the long passage of time.
Issues
- Whether omission of an express specific-performance clause and provision for double earnest-money repayment barred the remedy.
Provisions considered
- Section23, Specific Relief Act,1963Naming damages does not bar otherwise proper specific performance where the sum secures performance rather than offering payment in substitution; the named sum is not additionally decreed with performance. (¶¶ 8–9, 15)
Held
- Specific performance need not be expressly promised in the contract. A damages or penalty clause precludes it only where the parties intended an option to pay money instead of performing, assessed from the terms and circumstances. (¶ 8–14)
- Dadarao had already been held per incuriam for overlooking the statute and binding precedent and was also distinguishable. Here the authorisation and sale agreement retained the same earnest-money repayment and penalty; omission of the express remedy did not convert security for performance into an alternative obligation. Agreement and purchaser’s readiness and willingness were concurrently established. (¶¶ 4, 7, 15)
- Specific performance was ordered with the purchaser’s undertaking to depositRs10crore in the Supreme Court Registry within nine months. Vacant possession was to follow payment to the respondent. No additional payment of the originalRs2,92,500 balance was required. (¶ 16–18)
Result
Appeal allowed; specific performance decreed subject to deposit ofRs10crore within nine months and delivery of vacant possession on payment, without an additional demand for the original balance price.