As per Section 73 of the Indian Contract Act, a plaintiff shall be entitled to the refund of the amount of sale consideration paid, with interest.

This Supreme Court judgement clarifies that if a contract for sale is breached, the plaintiff is entitled to a refund of the sale consideration paid, along with interest. This ruling stems from a case where land was agreed to be sold, a significant portion of the price was paid, but the seller failed to execute the sale deed. Subsequently, the land was acquired, leading the court to affirm the buyer's right to recover their money with interest.

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1653 OF 2021

Sukhbir …Appellant

Versus

Ajit Singh …Respondent

J U D G M E N T

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 23.09.2016 passed by the High Court of Punjab and Haryana at Chandigarh in R.S.A. No. 4848/2016, by which the High Court has disposed of the said second appeal modifying the judgment and decree for specific performance qua agreement to sell which was in favour of the original plaintiff to the extent holding that the respondent-original plaintiff shall be deemed to have stepped into the shoes of the vendor and shall be entitled to the entire amount of compensation along with solatium and interest etc. owing to the acquisition of the land, the original defendant has preferred the present appeal.

2. The facts leading to the present appeal in nutshell are as under: That an agreement to sell was executed by the appellant – original defendant (hereinafter referred to as the ‘defendant’) in favour of the respondent – original plaintiff (hereinafter referred to as the ‘plaintiff’) on 9.3.2010 with respect to the land in question for a total sale consideration of Rs. 32 lakhs. That out of the total sale consideration of Rs. 32 lakhs, the plaintiff paid Rs. 31, 50,000/- to the defendant. That as per the agreement the sale deed was to be executed on 8.7.2010. Upon failure of the defendant to execute the sale deed, the plaintiff served a legal notice dated 13.7.2020 requesting the defendant to remain present at Sub-Registrar’s office on 6.8.2010 to execute the sale deed. But instead of remaining present on the said date at the office of the SubRegistrar, the defendant refused to do so on 4.8.2010. That thereafter the plaintiff instituted a suit on 5.8.2010 being Civil Suit No. RBT-34/2010 in the Court of learned Civil Judge, Senior Division, Jhajjar, Haryana for specific performance of the agreement to sell and to handover the possession of the land in question. By way of an alternative prayer, it was prayed for recovery of Rs. 31,50,000/- with interest @ 24% per annum from 9.3.2010 till the date of payment. That after the filing of the suit but before passing of the final decree, the land in question came to be acquired by the acquiring body for which a notification under Section 6 of the Land Acquisition Act was issued on 6.7.2012. That the learned trial Court decreed the suit by judgment and decree dated 19.12.2012 and passed a decree for specific performance.

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