In Brief
A company (Golden Forest) sought specific performance of an agreement to buy land from Santosh Batra (deceased). The seller contended the agreement was cancelled by mutual consent in 1991 and refund of earnest money was made. The trial court agreed and dismissed the suit. The high court and first appellate court reversed this, arguing the refund was incomplete (₹61,434 returned out of ₹62,500 paid). The Supreme Court allowed the seller's appeal, holding that a covering letter explicitly stating the dispute was settled, coupled with the buyer's unchallenged encashment of the refund cheque, proved mutual cancellation of the agreement, making specific performance untenable.
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