Court Orders Plaintiffs to Pay Additional Sum to Balance Equities Amid Rising Property Prices
In a significant judgment delivered by the Bombay High Court on April 1, 2026, Justice Firdosh P. Pooniwalla ruled in favor of the appellants, the heirs of the original plaintiff, granting specific performance of an oral agreement for the sale of immovable property. The case, which dates back to 1978, involved a disputed agreement between the late Shri. M.K. Madhavan and Shri. R. Subramaniam over the sale of a flat in Mangla Goodwill Co-operative Housing Society, Wadala, Mumbai.
The court set aside the previous judgment of the Bombay City Civil Court, which had rejected specific performance and instead ordered a refund of the earnest amount with interest. The appellants argued that despite the original plaintiff's readiness and willingness to perform the contract, the defendant had unlawfully backed out of the agreement.
Justice Pooniwalla emphasized that the existence of an oral agreement was undisputed, and the plaintiffs had demonstrated continuous readiness and willingness to perform their part by paying a substantial portion of the agreed consideration. The court noted that the plaintiffs' conduct and documentary evidence supported their case, challenging the trial court's findings.
Acknowledging the steep rise in property prices since the agreement was made in 1978, the High Court balanced the equities by directing the plaintiffs to pay an additional sum of Rs. 25 lakhs to the defendants. This decision aimed to address the hardship that might otherwise be faced by the defendants due to the passage of time and changing market conditions.
The court's decision underscores the discretionary and equitable nature of specific performance under the Specific Relief Act, 1963, particularly when circumstances have evolved significantly since the original contract. The plaintiffs' willingness to pay an additional amount was noted as a factor in the court's decision to grant specific performance.
The judgment reflects broader principles concerning readiness and willingness in contract law, as well as the need for equitable considerations in long-standing property disputes. The decision is likely to influence future cases involving oral agreements and the complexities arising from substantial time lapses and market changes.
Bottom Line:
Specific performance of an oral agreement for sale of immovable property may be granted when readiness and willingness of the plaintiff is proven, and equitable considerations are balanced between the parties.
Statutory provision(s): Specific Relief Act, 1963 Section 16(c), Section 20 (pre-amendment), Sections 22, 23, 24
