Punjab & Haryana High Court Sets Aside Decrees Granting Specific Performance; Holds Plaintiffs’ Acquiescence and Voluntary Delivery of Possession Created Equitable Estoppel in Favour of Subsequent Purchasers

Case Name: Harbhajan Singh and Others vs. Beant Singh and Others
Date of Judgment: 03 December 2025
Citation: RSA-344-2002
Bench: Hon’ble Mr. Justice Deepak Gupta

Held: The Punjab & Haryana High Court reversed concurrent findings of the Trial Court and First Appellate Court granting specific performance of an agreement to sell dated 22 April 1987, holding that the plaintiffs’ own conduct especially their voluntary delivery of possession to the subsequent purchaser and lack of protest created an equitable estoppel that disentitled them to the discretionary relief of specific performance.

Summary: The plaintiffs sought specific performance of an agreement to sell agricultural land at ₹31,500 per acre, asserting readiness and willingness and claiming that the owner later sold the land to Hazara Singh, the predecessor of the appellants, for ₹49,000 by a sham transaction. Although neither the original agreement nor any complaint of coercive dispossession existed, secondary evidence of the agreement was admitted and its execution proved through the deed writer and attesting witnesses. Defendant No.1, the owner, did not deny execution at any stage.

While the High Court endorsed the findings that the agreement was proved and that the plaintiffs had initially shown readiness and willingness, it found that the crucial issue ignored by both courts below was the plaintiffs’ conduct after the subsequent sale. The evidence revealed that plaintiff Beant Singh admitted handing over possession to Hazara Singh on execution of the sale deed. DW-1, son of Hazara Singh, corroborated this and testified, without challenge, that the plaintiffs were involved in negotiating the sale and voluntarily vacated the land. No pleadings or complaints of forcible dispossession existed despite the plaintiffs’ later claim.

The Court held that these facts showed clear acquiescence and full knowledge of the transaction. Their silence, voluntary delivery of possession, and failure to assert any right until after the sale undermined their claim that the earlier agreement subsisted. Applying the equitable principles recognised in Ram Awadh, the Court ruled that specific performance cannot be granted where the promisee’s conduct is inconsistent with the subsistence of the contract and prejudicial to a subsequent purchaser.

The Court also held that the subsequent sale deed dated 5 January 1988 was genuine, noting that the lower price alone did not establish fraud and that payment before the Sub-Registrar was proved.

Decision: The appeal was allowed. The decrees of the courts below were set aside and the suit for specific performance dismissed. The Court directed refund of the ₹10,000 earnest money with interest at 7.5% per annum from the date of suit, along with ₹2,00,000 compensation, payable by the original owner within three months, with enhanced interest on default.