• House owner to pay Rs 15 lakh compensation for cancelling sale deed: SC

    February 27, 2017

    The Supreme Court has asked a house owner to pay Rs 15 lakh as compensation to a buyer for backing out on the deal after signing an agreement while claiming that it was his only residential place. The court allowed him to retain the house but pay compensation to the buyer.

    The owner had signed an agreement in 1999 to sell a house for Rs 1.6 lakh at a village in Tamil Nadu and the buyer had paid Rs 60,000 in advance. Rest of the amount was to be paid at the time of execution of the sale deed.

    The owner, however, refused to honor the agreement, compelling the buyer to approach court. The trial court and Madras high court passed directions for execution of sale deed as per the agreement.

    The owner, Jayakantham failed to get any relief and decided to move to apex court challenging the orders of the lower court. He contended that the residential house was the sole property owned by the family and he could not sell it. He argued that the agreement was merely a document executed by way of security for a loan transaction but agreed to pay compensation to the buyer to retain the property.

    The SC bench consisting of Justices Arun Mishra and D Y Chandrachud said the hardship of the seller had to be considered and the court was not bound to grant relief of “specific performance” (contractual duty) merely because it is lawful to do so.

    The bench said, “The decree for specific performance shall accordingly stand set aside and shall stand substituted with a direction to the appellants (owners) to pay a sum of Rs 15 lakh to the respondent in lieu of specific performance. The amount shall be paid within two months from the date of receipt of a copy of this judgment”.


    The decision of the SC is justified in the present matter. It shall set up major example for all such fake and frivolous owner/builders who take the trust of buyer for granted. Here, the buyer had already submitted an advance amount and took up a loan. The owner is liable for such compensation.  

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