Supreme Court Restores 1979 Decree For Sale Of Land Under 1975 Agreement

The Supreme Court recently restored a trial court’s 1979 decree directing specific performance of a 1975 agreement to sell five bighas of agricultural land, located around three kilometres from Agra, for a total consideration of Rs 20,000.

A Bench of Justices J B Pardiwala and K Vinod Chandran allowed an appeal filed by Sobaran Singh (dead) through his legal representatives and rejected the defendants’ claim that the transaction was actually a loan and that the agreement to sell was only a security for the loan.

Why did the Supreme Court restore the trial court’s decree?

The suit for specific performance was based on a registered agreement to sell dated June 16, 1975. The trial court decreed the suit on February 28, 1979 and directed execution of the sale deed upon payment of the balance sale consideration.

The plaintiff subsequently obtained the sale of the property through court on June 7, 1979 and was stated to have remained in possession of the land since then.

However, the first appellate court reversed the trial court’s decree, holding that there was nothing on record to show the plaintiff’s readiness and willingness to perform his part of the agreement. It instead directed that the advance amount be returned with interest.

In the second appeal, the high court upheld the trial court’s findings in favour of the plaintiff. However, while attempting to “maintain equity”, it enhanced the amount payable to the plaintiff from the Rs 5,000 advance paid under the agreement to Rs 15 lakh, along with interest.

The defendants then approached the Supreme Court, contending that the transaction was merely a loan and that the agreement for sale was executed only as security. They claimed that once the loan and interest were repaid, the agreement was to be cancelled.

What did the defendants argue about the 1975 agreement to sell?

The defendants also contended that the agreement of sale had not been read over to them before its execution. However, the trial court noted that this plea had not been taken in the written statement.

The trialcourt had found that the agreement was proved by the plaintiff as well as the two attesting witnesses.

Court also noted that the plaintiff owned land adjoining the suit property and had intended to purchase the land so that it could be annexed to his existing properties and increase his total holding.

One of the attesting witnesses specifically stated that the defendant had agreed to sell the property because he was in need of money. The witness also stated that the defendants were not cultivating the land themselves and had been giving it out for cultivation.

Why was the objection relating to Agra’s urban limits rejected?

The defendants had also argued that the required sanction had not been obtained because the land fell within the Urban Agglomeration, being located within five kilometres of the Agra Municipal limits.

The trial court rejected this contention, holding that the Urban Land (Ceiling and Regulation) Act, 1976 did not cover agricultural land.

It also found that the discretionary relief of specific performance was justified under Section 20 of the Specific Relief Act, 1963.

What did the Supreme Court say about the plaintiff’s possession?

The Supreme Court noted that the litigation had continued even though the 1975 agreement had a period of two years and the sale had ultimately been executed through the court in 1979.

The Bench also noted that both sides had made offers and counteroffers during the proceedings, but neither was acceptable to the other.

“Obviously, the appellant-plaintiff did not want to give up the land which he was in continued possession from the year 1979,” Court said.

The Bench noted that one offer involved Rs 5 lakh per bigha, while the plaintiff had offered Rs 5 lakh as a refund, which represented the value placed on the property four decades later.

Court held that equity had to be applied in favour of the plaintiff, who had parted with Rs 20,000 more than four decades earlier and had subsequently obtained ownership and possession of the property.

Accordingly, the Supreme Court reversed the decisions of the first appellate court and the high court and restored the trial court’s decree.

“The plaintiff’s possession at this juncture cannot be interfered with,” the Bench said.

Court also noted that the defendant had deposited Rs 15 lakh after the high court’s judgment. It directed that this amount, along with any interest accrued on it, be refunded to the defendant within one month.

Case Title: Sobaran Singh (Dead) Through LRs Vs Gordhan Singh (Dead) Thr LRs

Bench: Justices J B Pardiwala and K Vinod Chandran 

Date of Judgment: September 15, 2026