In a long-running property dispute that stretched nearly 18 years, the Supreme Court of India on Monday stepped in to balance equities between a buyer and sellers after finding fault on both sides. While refusing to revive a decree for specific performance of a property sale agreement, the Court ordered the sellers to pay ₹3 crore as a lump-sum compensation to the buyer, modifying a Delhi High Court judgment.
Background of the Case
The dispute arose from an Agreement to Sell dated January 22, 2008, under which Subhash Aggarwal agreed to purchase a 300 square yard property in Ashok Vihar, Phase-I, Delhi for a total consideration of ₹6.11 crore.
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At the time of the agreement, the buyer paid ₹60 lakh as earnest money, followed by another ₹30 lakh in March 2008. The sellers, Mahender Pal Chhabra and another, acknowledged receipt of ₹90 lakh.
When the sale did not go through, the buyer approached the trial court seeking specific performance, a legal remedy that asks the court to compel completion of a contract rather than awarding damages.
In February 2021, the trial court ruled in favour of the buyer, holding that he had shown readiness and willingness to complete the transaction. This decree was later set aside by a Division Bench of the Delhi High Court in September 2025, prompting the buyer to approach the Supreme Court.
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What the Supreme Court Examined
A Bench led by Justice Vikram Nath and Justice Sandeep Mehta closely examined whether the buyer had genuinely demonstrated “readiness and willingness”, a key requirement for granting specific performance.
The Court noted that the buyer failed to prove he had the financial capacity to pay the remaining ₹5.21 crore on the stipulated date of May 10, 2008. It also recorded that the buyer did not even visit the Sub-Registrar’s office on the due date.
At the same time, the Bench pointed out that the sellers were not entirely blameless either. They had failed to complete important contractual steps, including obtaining mutation and converting the property from leasehold to freehold.
“The concept of readiness and willingness has no fixed formula and must be judged on the facts of each case,” the Bench observed.
Court’s Observations on Equity
The Supreme Court agreed with the High Court that, given the passage of more than 17 years, ordering specific performance would no longer be an equitable solution.
However, the Bench took serious exception to the High Court’s decision allowing forfeiture of the entire ₹60 lakh earnest money.
The Court underlined that equity should prevent unjust enrichment, especially where both parties have contributed to the failure of the contract.
“Directing forfeiture of the earnest money would result in an equitable windfall to the respondents,” the Court said, stressing that justice must restore parties as close as possible to their original positions.
Final Decision
To “do complete justice” and finally close the dispute, the Supreme Court modified the High Court’s ruling.
Instead of forfeiture or specific performance, the Court directed the sellers to pay a lump-sum amount of ₹3 crore to the buyer within four weeks.
“This would fully restitute the appellant while avoiding further complications relating to the contract,” the Bench held, adding that the order would bring quietus to a dispute that had dragged on for over a decade.
With this modification, the appeal was partly allowed, and all pending applications were disposed of.
Case Title:- Subhash Aggarwal v. Mahender Pal Chhabra & Anr.
Case Number: Civil Appeal No. of 2026 (arising out of SLP (Civil) No. 30936 of 2025)
