Supreme Court Raps Plaintiff For Withholding Possession After Receiving ₹2 Crore In Lieu Of Specific Performance, Imposes Rs 10 Lakh Costs

The Supreme Court recently came down heavily on a plaintiff in a specific performance suit who refused to vacate the property even after being awarded ₹2 crore as compensation in lieu of specific performance of a sale agreement.

The Court strongly disapproved of the litigant's attempt to exploit the omission in the earlier order,which had not expressly directed the handing over of possession,to continue occupying the property.

The dispute arose from a sale agreement executed in 1989, under which the appellant paid an earnest money of ₹25,000 and obtained possession of part of the property. Over the years, litigation ensued, and in a judgment on April 1, 2025, this Court had set aside the decree granted by lower courts (in favor of specific performance) but awarded an equitable compensation of ₹2 crores to the appellant in lieu of that earnest money

However, when the respondents attempted to execute the order by depositing the amount, the appellant declined to accept it and resisted surrendering possession. The executing court, and subsequently the High Court of Punjab & Haryana in Chandigarh, directed issuance of warrants to deliver possession. The appellant's revision petition was rejected by the High Court.

In the present appeal, the Supreme Court held that the appellant had “shot himself in the foot” by obstructing execution. The Court emphasised that a litigant cannot retain possession while benefiting from an “extraordinary monetary award,” and equity would not permit such “unjust enrichment.”

A bench of Justices Vikram Nath and Sandeep Mehta heard the case.

The main ground for the plaintiff's resistance was that the order of the Supreme Court, which dismissed his specific performance suit, doesn't specifically mention about delivery or return of possession to the Respondent-defendant.

Noting that the award of ₹2 Crores was an "extraordinary monetary award" against Rs. 25,000/- deposited as earnest money, intended to "balance the equities" and "put a quietus" to the litigation. Retaining both the compensation and the possession would amount to unjust enrichment, the Court said.

“Once it has been held that no relief can be granted for specific performance and an extraordinary amount has been awarded to compensate the meagre amount of advance is only to adjust the equities. Appellant cannot have any right to resist possession and should not have obstructed or resisted the delivery of possession.”, the court observed.

Applying the maxim Actus Curiae Neminem Gravabit (an act of the court shall prejudice no one), a judgment authored by Justice Nath observed that an inadvertent omission by the court to mention the delivery of property should not be used by a litigant to gain an unfair advantage.

The Court said that the direction to pay ₹2 Crores was intrinsically linked to the dismissal of the suit. The compensation was for the loss of the bargain and the right to possess. Therefore, the obligation to return possession was a necessary and implied corollary of the judgment.

“Accordingly, where a party has been disadvantaged by reason of an act of the Court, it is incumbent upon the Court to undo such prejudice and restore the party to the position he would have occupied but for such act.”, the court said.

Accordingly, the Court justified the issuance of warrants of possession against the Appellant.

“We are thus satisfied that the Executing Court and the High Court have taken a correct view in directing for issuance of warrants of possession with police assistance. The appeal, therefore, deserves dismissal.”, the court held.

The appeal was dismissed with cost of Rs 10 lakhs.

Cause Title: PREM AGGARWAL Versus MOHAN SINGH & ORS.

Citation : 2025 LiveLaw (SC) 996

Click here to read/download the judgment

Appearance:

For Petitioner(s) Mr. Siddharth Bhatnagar, Sr. Adv. Mr. Mayank Kshirsagar, AOR Ms. Pavani Verma, Adv. Mrs. Anumita Verma, Adv. Mr. Akhilesh Yadav, Adv.

For Respondent(s) Mr. Aditya Dassaur, Adv. Ms. Priyanjali Singh, AOR