In a significant property dispute, the Supreme Court of India has set aside a Madras High Court ruling and restored the first appellate court’s decree granting specific performance to Annamalai. The bench of Justices J.B. Pardiwala and Manoj Misra held that the High Court had overstepped its jurisdiction by interfering with factual findings, emphasizing that the contract in question was indeed valid and enforceable.
Background
The legal battle began in 2010 when Annamalai filed a suit seeking enforcement of a sale agreement dated January 8, 2010. The deal involved two pieces of land originally owned by Ponnusamy and Selvi, represented through power of attorney by Saraswathi (D-1) and Annamalai. Disputes erupted after Saraswathi and her son Dharmalingam (D-2) allegedly refused to execute the sale deed and instead sold part of the land to Vasanthi (D-3), Saraswathi’s daughter.
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The trial court dismissed Annamalai’s claim, calling the agreement a loan security. But the first appellate court reversed the finding, holding the document to be a genuine sale agreement, thereby granting Annamalai specific performance. The Madras High Court later overturned that decree in 2018, directing refund of the earnest money.
Court’s Observations
While hearing Annamalai’s appeal, the Supreme Court noted that the High Court’s interference under Section 100 of the Civil Procedure Code (CPC) was unwarranted.
Justice Manoj Misra observed, “Once the signatures on the endorsement acknowledging ₹1.95 lakh are admitted, a presumption arises that it was made for good consideration.”
The bench found that Annamalai had paid almost the entire consideration - ₹6.65 lakh out of ₹6.75 lakh - and was ready to pay the remaining ₹10,000. “When 90 percent of the amount stands paid, and the seller accepts more even after six months, the plea of delay or lack of readiness cannot stand,” the Court said.
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It added that by accepting additional payment after the stipulated time, the sellers effectively treated the agreement as subsisting and waived their right to terminate it.
On whether the suit was maintainable without seeking a separate declaration, the Court clarified that since the termination was void and contrary to the conduct of the parties, a declaratory relief was unnecessary.
Decision
Allowing Annamalai’s appeal, the Supreme Court restored the first appellate court’s decree, directing that the sale agreement be specifically performed. The Court ordered Annamalai to deposit the balance of ₹10,000 in the execution court within one month.
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“This was not a fit case to deny specific performance, especially when the plaintiff had paid over 90 percent of the sale consideration and the defendants had acted in bad faith,” the bench concluded.
The parties were directed to bear their own costs.
Case: Annamalai vs Vasanthi & Others (Supreme Court of India, 2025)
Case Type: Civil Appeal (arising out of SLP (C) Nos. 26848–26849 of 2018)
Citation: 2025 INSC 1267
Court: Supreme Court of India, Civil Appellate Jurisdiction
Bench: Justice J.B. Pardiwala and Justice Manoj Misra
Date of Judgment: October 29, 2025
