Delhi High Court
Sunita Sinha vs M/S Leela Builders Pvt Ltd & Ors on 17 April, 2026
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 19thDecember, 2025
Pronounced on:17th April, 2026.
+ RFA 70/2019, CM APPL. 3892/2019, CM APPL. 34117/2019 & CM
APPL. 46747/2023
SUNITA SINHA .....Appellant
Through: Mr. Anirudh Bakhru, Mr. Ayush Puri,
Mr. Kanav Madnani, Ms. Urvija
Sharma, Ms. Aayomi Sharma, Mr.
Sultan Jafri, Mr. Mohd. Umar and Mr.
Abhigyan Pandey, Advs.
M: 9958029634
versus
M/S LEELA BUILDERS PVT. LTD.& ORS. .....Respondents
Through: Mr. Samar Singh Kachwaha, Ms.
Aakanksha Kaul, Ms. Kavita Vinayak
and Mr. Gaurav Vashisth, Advs. for
R-1 to 8
M: 9540022777
Email: [email protected]
Mr. Lakshay Dhamija, Adv for R-9
Mr. Arpit Bhargava, Mr. Sarthak
Sharma, Mr. Abhishek Gaind, Mr.
Ajay Singh Gosain, Ms. Astha
Sharma and Ms. Nitasha Gupta, Advs.
for R-10
M: 9871316969
Mr. Manoj Pant, Advocate for R-11
(M:9971560508)
Signature Not Verified
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By:HARIOM SHARMA
Signing Date:17.04.2026
20:19:54
CORAM:
HON'BLE MS. JUSTICE MINI PUSHKARNA
JUDGMENT
MINI PUSHKARNA, J.
I. INTRODUCTION
1. The present Regular First Appeal (“RFA”) has been filed under
Section 96 of the Code of Civil Procedure, 1908 (“CPC“), thereby,
challenging the judgment dated 10th January, 2019 (“impugned
judgment”), passed by the Additional District Judge – 07, Saket Courts,
New Delhi (“ADJ”), in the suit bearing CS No. 2162/2008 (renumbered as
CS No. 1180/2017), titled as ―Sunita Sinha and Anr. Versus M/s. Leela
Builders Pvt. Ltd. & Ors.‖, whereby, the Trial Court dismissed the suit of the
appellant.
2. The aforesaid suit was filed by the plaintiffs, seeking mandatory
injunction to restrain defendant nos. 1 to 8 from using the property bearing
No. 48, Block No. 171, Sunder Nagar, New Delhi, admeasuring 966.33 sq.
yards (“suit property”), and to deliver the vacant and peaceful possession
of the same to the plaintiffs. The suit, in the alternative, prayed for grant of
decree of possession with respect to the suit property in favour of the
plaintiffs, along with recovery of mesne profits and for permanent
injunction, in respect of the same.
3. Before delving into the facts of the present case, it is pertinent to note
that this Court vide order dated 28th January, 2019, directed the parties to
maintain status quo with respect to the title and possession of the suit
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property. Subsequently, an application being C.M. APPL. 34117/2019 came
to be filed by respondent nos. 1 to 8 seeking modification of the order dated
28th January, 2019 in order for them to seek mutation of the suit property in
their name with the undertaking that they shall not part with the possession
of the suit property. However, by way the order dated 29th August, 2024, the
said application was directed to be dealt with directly at the time of hearing
of the main appeal.
4. This Court vide order dated 05th May, 2022 has recorded that
respondent nos. 1 to 8 are the only contesting parties in the present appeal.
Further, this Court dealt with the application, i.e., C.M. APPL. 7668/2021,
filed jointly by the four applicants, namely, Shri Sanjeev Sinha (husband of
the deceased appellant), Shri Gaurav Sinha (son of the deceased appellant),
Shri Mahesh Kapoor and Smt. Usha Kapoor, thereby, seeking their
substitution in the appeal in place of the deceased appellant, i.e., Smt. Sunita
Sinha, who died on 07th September, 2020.
5. By way of the aforesaid order, this Court impleaded Shri Sanjeev
Sinha (husband of the deceased appellant) and Shri Gaurav Sinha (son of the
deceased appellant) as the legal heirs of the deceased appellant. However,
the other applicants, being Shri Mahesh Kapoor and Smt. Usha Kapoor,
were not impleaded, since they were third parties who claimed interest in the
suit property on the basis of an Agreement to Sell dated 05th December,
2005, executed by the appellant in their favour. The said applicants,
however, were granted liberty to take appropriate steps for their intervention
in the appeal separately. However, no steps were taken in this regard.
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By:HARIOM SHARMA
Signing Date:17.04.2026
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II. BRIEF FACTS OF THE CASE
a. Pre-Filing of the Suit
6. The brief facts, relevant for adjudication of the appeal, as culled out
from the impugned judgment and the pleadings on record, are as follows:
6.1. The suit property was initially allotted by the President of India
(“lessor”) to one Shri R.N. Luthra by way of a perpetual lease deed dated
30th November, 1961. He, thereof, constructed a two and half storeyed super-
structure/bungalow, along with servant quarters and garage block over the
suit property.
6.2. Shri R.N. Luthra died on 16th December, 1972, leaving behind a Will
dated 10th September, 1971, as per which, the suit property was divided in
1/3rd equal shares between his two daughters, namely, Smt. Santosh Sethi
and Smt. Nirmal Krishan,and his grandson, namely, Shri Rajiv Luthra. By
order dated 26th November, 1975, in Probate Case No. 1/1974, the suit
property was probated in favour of the said legal heirs.
6.3. Smt. Santosh Sethi died on 29th June, 1984, and by way of her Will
dated 20th February, 1983, her 1/3rd share in the suit property devolved in
favour of her son, Shri. Sanjeev Sethi.
6.4. Smt. Nirmal Krishan, along with Shri Sanjeev Sethi and Shri Rajeev
Luthra (“sellers”), entered into an Agreement to Sell dated 24th January,
1989, whereby, the said co-owners agreed to sell their respective shares in
the suit property to respondent nos. 1 to 8 (“purchasers”) for a total agreed
sale consideration of Rs. 80.70 Lacs.
6.5. Clause 2 of the Agreement to Sell recorded that respondent nos. 1 to 8
had paid an amount of Rs. 10.50 Lacs as part payment to the sellers.
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By:HARIOM SHARMA
Signing Date:17.04.2026
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6.6. Additionally, as per Clause 4 of the Agreement to Sell, the purchasers
were required to pay a further sum of Rs. 62.40 Lacs upon clearance under
Section 269UC of the Income Tax Act, 1961 (“Income Tax Act“) or within
six months, whichever date is later. Further, the sellers shall deliver the
vacant physical possession of the self-occupied portion and symbolic
possession of the rented portion in the suit property to the purchasers, as part
performance of the Agreement to Sell against the said payment, and call
upon the tenants to attorn to the purchasers.
6.7. Further, as per Clause 6 of the Agreement to Sell, the balance sale
consideration of Rs. 7.80 Lacs was to be paid within 30 days of the sellers
having obtained permission under Section 230-A of the Income Tax Act.
6.8. Subsequently, a sum of Rs. 12 Lacs was paid by the purchasers to the
sellers, and the said payment was acknowledged by the sellers by way of the
receipt dated 01st August, 1989.
6.9. Thereafter, the purchasers also paid a sum of Rs. 15 Lacs to the sellers
and a receipt dated 03rd August, 1989 was also issued by the sellers in this
regard, whereby, the vacant physical possession of the self-occupied portion
and the symbolic possession of the tenanted portion of the suit property, was
handed over to the purchasers. By way of the said receipt dated 03rd August,
1989, the sellers also stated that the purchasers would be entitled to receive
and claim the rent. Accordingly, the Agreement to Sell dated 24th January,
1989, stood modified to that extent. The receipt also records that the sellers
executed a General Power of Attorney (“GPA”) in favor of respondent no. 7,
i.e., Shri U.S. Sitani, which is irrevocable.
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By:HARIOM SHARMA
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6.10. The aforesaid GPA dated 03rd August, 1989, as executed by the sellers
authorizes the purchasers to demolish, reconstruct, sell, create lease or deal
with the suit property, in any manner, whatsoever.
6.11. As per the purchasers, at the time of handing over of the possession of
the suit property by the sellers on 03rd August, 1989 and execution of GPA
on the same day, the parties arrived at an oral understanding that the
purchasers shall take steps to recover possession of the tenanted portion of
the suit property from the tenants, and any payments made by the purchasers
to the tenants in this regard, shall be adjusted towards payment of balance
sale consideration. Thus, the purchasers paid a sum of Rs. 45 Lacs in total,
i.e., Rs. 25 Lacs and 20 Lacs to the tenants of the ground and first floors of
the suit property, respectively, on 24th February, 1990. Receipts with regard
thereto, have been placed on record.
6.12. The sellers have further acknowledged that the purchasers paid a sum
of Rs. 8,23,646.72/- on 25thApril, 1990, as recorded in Ex. DW-1/13, and the
same was paid by the sellers to the L&DO for revocation of re-entry
proceedings.
6.13. One of the co-sellers, Smt. Nirmal Krishan passed away. She was
survived by her husband, Shri G.D. Krishan and her two children, i.e.,
plaintiff no. 1/appellant and plaintiff no. 2/respondent no. 11.
6.14. By way of a letter dated 14th March 1991, Shri Rajeev Luthra, one of
the sellers, informed the purchasers that certain challans had been received
from the Municipal Corporation of Delhi (“MCD”) for payment of property
taxes, and stated that there seems to be some mistake in the calculations
done by the MCD.In the said letter, Shri Rajiv Luthra requested to the sellers
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that ―you may like to take up the matter with the MCD and have their
records corrected.‖
6.15. The purchasers paid the lease rent in respect of the suit property for
the 10 years’ period from 1989 to 1998 on 05th September, 1997.
6.16. Mr. G.D. Krishan, husband of Ms. Nirmal Krishan passed away on
19th September, 1998.
6.17. The suit in question came to be filed on 13th August, 1999 by the
children of Late Smt. Nirmal Krishan and Late Shri G.D. Krishan,
approximately 11 years after the execution of the Agreement to Sell, GPA
and the possession of the suit property being handed over to the purchasers.
6.18. It is the case of the plaintiffs that the remaining sale consideration
under the Agreement to Sell, has not been paid by the purchasers, and
therefore, the Agreement to Sell, stands cancelled.
b. Post-Filing of the Suit
6.19. By way of the order dated 07th January, 2000, Shri Sanjeev Sethi, who
was defendant no. 10, was transposed as plaintiff in the suit on the ground
that he is the owner of 1/3rd share of the suit property, by virtue of the Will of
his mother, i.e., Smt. Santosh Sethi.
6.20. On 18th April, 2000, this Court restrained the L&DO from transferring
or converting the leasehold rights of the suit property into freehold or
transferring the same to any other person, till the next date of hearing.
6.21. Further, vide order dated 25th February, 2002, this Court granted
temporary injunction in favour of the plaintiffs, restraining the L&DO from
transferring or converting the leasehold rights of the suit property, or in any
manner, selling or alienating the propertyto any other person, till the disposal
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of the suit. However, it was further directed that the plaintiffs shall not
disturb the peaceful possession of the defendants in the suit property.
6.22. Subsequently, in an appeal being FAO(OS) 152/2002 against the order
dated 25th February, 2002 of the Single Judge, the Division Bench of this
Court vide order dated 26th March, 2003, vacated the aforesaid status quo
order on the basis of a consent order. The Division Bench passed directions
to the parties to move appropriate applications to the L&DO for conversion
of the suit property from leasehold to freehold and that the same shall be
done in the name of the recorded owners, i.e., Smt. Sunita Sinha, Shri
Arvind Krishna Malhotra, Shri Sanjeev Sethi and Shri Rajiv Luthra.
6.23. The suit was subsequently transferred to the District Court vide order
dated 17th November, 2003 in view of change in pecuniary jurisdiction of the
Court.
6.24. Subsequently, by way of order dated 26th October, 2006, the plaint
was allowed to be amended. The amended suit fell within the pecuniary
jurisdiction of this Court, and consequently, the proceedings were then again
continued before the High Court in CS(OS) 2162/2008.
6.25. This Court vide 08th November, 2011 dismissed the application filed
by the plaintiffs under Order 12 Rule 6 of the CPC, while noting that no
clear admission had been made by the defendants to the extent that the entire
sale consideration had not been paid to the sellers. The Court further
observed that prima facie reading of the GPA would show thatthe entire sale
consideration has been paid or else no ordinary prudent man would execute a
GPA with such sweeping powers or put the defendants in possession of the
suit property.
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By:HARIOM SHARMA
Signing Date:17.04.2026
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6.26. The aforesaid decision was further upheld vide judgment dated 20th
July, 2012 in FAO(OS) 139/2012, wherein, the Division Bench noted that the
plaintiffs will have to explain the conduct of their mother, along with the
other two co-owners, of handing over the possession to the purchasers and
permitting the purchasers to pay money to the tenants for vacation of the
tenanted portions. Pursuant thereto, the SLP (C) 32200/2012, against the
judgment of the Division Bench was also dismissed by the Supreme Court
vide order dated 23rd November, 2012.
6.27. Issues in the suit were framed by this Court by order dated 06th March,
2012, and the same are reproduced as under:
―(i) Whether the plaintiffs are entitled to a decree of mandatory
injunction or in the alternative a decree for possession? OPP
(ii) Whether the plaintiffs are entitled to a decree of mesne profits and if
so, at what rate and for what period? OPP
(iii) Whether the plaintiffs are entitled to a decree of Injunction as
prayed for? OPP
(iv) Whether the plaintiffs have no locus standi to file the present case?
OPD
(v) Whether the Agreement to Sell dated 24.01.1989 stood cancelled, as
alleged in para 14 of the plaint? OPP
(vi) Whether the suit is barred by limitation? OPD
(vii) Whether the suit has not been properly valued for the purposes of
court fees? OPD
(viii)Whether the answering defendants have discharged their
obligation under the Agreement to Sell dated 24.01.1989? OPD
(ix) Whether defendant nos.1 to 8 were given possession of the suit
property after receipt of the full consideration? OPD
(x) Whether the predecessors-in-interest of the plaintiffs and defendant
no.10 ceased to have any right, title or interest in the suit property, after
execution of the duly registered, irrevocable General Power of Attorney
dated 03.08.1989, in favour of the nominee (defendant no.7) of
Defendant No.1- 6? OPD
(xi) Relief.‖
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By:HARIOM SHARMA
Signing Date:17.04.2026
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6.28. Subsequent to the change in the pecuniary jurisdiction, the suit was
transferred from the Delhi High Court to the Patiala House Courts, in the
year 2016. Considering the territorial jurisdiction, the suit was transferred to
South East District, Saket Courts, in the year 2017.
6.29. Thereafter, the impugned judgment was pronounced by the Trial
Court, whereby, the suit of the plaintiffs was dismissed. Hence, the present
appeal has been filed.
6.30. In addition to the aforesaid, it is also to be noted that respondent no. 7,
namely, Shri U.S. Sitani had filed a criminal complaint against the
appellant/plaintiff no. 1 as well as respondent nos. 9 and 10, for committing
offences under Sections 420, 467, 468, 471 and 120-B of the Indian Penal
Code, 1860 (“IPC“). Subsequently, an FIR bearing No. 401/2002 was
registered. Pursuant thereto, in Cr. Case No. 40650/2016, vide order dated
22nd November, 2021, the proceedings qua Smt. Sunita Sinha were abated
due to her demise. The case is to be revived as and when the accused
persons, namely, Shri Arvind and Shri Sanjeev Sethi, both of whom were
declared as proclaimed offenders, are apprehended or arrested.
III. SUBMISSIONS OF THE APPELLANT
7. Before this Court, the appellant has raised the following contentions
for seeking setting aside of the impugned judgment:
7.1. The appellant acquired 1/3rd share in the suit property from her father,
Late Shri G.D. Krishan, who died intestate on 19th September, 1998.
7.2. The sellers under the Agreement to Sell dated 24th January, 1989 only
received 56.7% of the entire sale consideration, i.e., Rs. 45,73,646.72/- out
of the total sale consideration of Rs. 80,70,000/-. Since the entire paymentSignature Not Verified
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was never made by the purchasers, they failed to fulfill their contractual
obligation and the Agreement to Sell, stood automatically cancelled in terms
of Clause 1, read with Clause 4 therein.
7.3. The impugned judgment has erred in holding that there existed any
oral understanding between the sellers and the purchasers, and the alleged
payment of Rs. 45 Lacs made to the tenants, stood adjusted against the
balance sale consideration.
7.4. The Agreement to Sell dated 24th January, 1989, did not provide for
any obligation on the sellers to get the tenanted portion of the suit premises
vacated and handover possession of the same to the purchasers. Further,
there is no mention of any Clause, whereby, payments made to the tenants
could be construed as fulfillment of the obligations of the respondent nos. 1
to 8 under the Agreement to Sell.
7.5. The receipt dated 01st August, 1989 also records that the balance sale
consideration had to be paid at the time of registration of sale deed. The GPA
dated 03th August, 1989, also never recorded any fact about any oral
understanding between the sellers and the purchasers. Further, on the same
date, the receipt issued by the sellers for a sum of Rs. 15 Lacs categorically
stated that the balance sale consideration shall be paid at the time of
registration of sale deed. Additionally, the receipt noted that the vacant
physical possession of the self-occupied portion and the symbolic possession
of the tenanted portion of the suit property, has been handed over to the
purchasers, and the Agreement to Sell dated 24th January, 1989 was modified
to that extent only. The said receipt does not record any oral understanding
between the purchasers and the sellers.
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7.6. Had the parties to the Agreement to Sell, agreed that the payment to
the tenant would be adjusted towards the sale consideration, there would
have been no question for providing payment of balance sale consideration
at the time of registration of sale deed.
7.7. The findings in the impugned judgment are contradictory to the bare
terms of the receipt dated 03rd August, 1989, which clearly records that the
balance sale consideration was to be paid at the time of registration of the
sale deed. Further, the said receipt only records that physical and symbolic
possession of the vacant and the tenanted portions of the suit property,
respectively, was handed over to respondent nos. 1 to 8. Thus, the impugned
judgment failed to note that the Agreement to Sell dated 24th January, 1989,
was modified only to this extent.
7.8. As per the case of the respondent nos. 1 to 8, the alleged oral
understanding occurred prior to the execution of the GPA and the receipt
dated 03rd August, 1989. Therefore, the said are subsequent documents to the
alleged oral understanding, however, they do not record anything about the
oral understanding or about the payment to tenants to secure relinquishment
of tenancy. Hence, this alleged oral understanding being contrary to the
admitted terms of the Agreement to Sell, GPA and the receipts is hit by
Sections 91 and 92 of the Indian Evidence Act, 1872 (“Evidence Act“).
7.9. Even otherwise, the alleged payments made by the purchasers to the
tenants for relinquishment of tenancy, could not have been adjusted against
the balance sale consideration under the Agreement to Sell, as such
payments were unlawful under Section 5(3) of the Delhi Rent Control Act,
1958 (“DRC Act“). Hence, the said alleged payments cannot be regarded as
valid consideration in terms of Sections 23 and 24 of the Indian ContractSignature Not Verified
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Act, 1872 (“Contract Act“). Thus, the alleged oral understanding is also
void under the DRC Act.
7.10. The alleged payment of Rs. 45 Lacs and the receipts thereto dated 24th
February, 1990, were never proved as the tenants were never called as
witnesses before the Trial Court.
7.11. By way of the letter dated 23rd November, 1993, Shri G.D. Krishan
called upon Shri U.S. Sitani to pay the balance sale consideration or
otherwise, the Agreement to Sell dated 24th January, 1989, will stand
cancelled. Since the balance sale consideration was never paid to the sellers,
the Agreement to Sell stood cancelled. Therefore, no sale deed was ever
executed pursuant to the Agreement to Sell and the GPA.
7.12. As per the Clause 7 of the Agreement to Sell, the respondent nos. 1 to
8 were empowered to file a suit for specific performance if they were ready
and willing to pay the sale consideration. However, since the respondents
never made the requisite payments, no suit for specific performance was
filed by them.
7.13. It is settled law that an Agreement to Sell or a GPA is not a document
of title or a deed of transfer of property by sale, and as such, does not confer
absolute title upon the buyer over the suit property in view of Section 54 of
the Transfer of Property Act, 1882 (“TP Act“).
7.14. The Trial Court by way of the impugned judgment erroneously held
that the dictum in Suraj Lamp and Industries Private Limited Versus State
of Haryana and Another1, would not apply to the present case, as the said
decision is prospective in nature. This Court in the case of Chander Dutt1
(2012) 1 SCC 656.
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Sharma Versus Prem Chand and Others2, has held that the judgment passed
by the Supreme Court in Suraj Lamp (Supra) only puts down the settled law
that there can be no transfer of title without a registered conveyance deed,
and documents such as an Agreement to Sell or GPA can only give a right to
file a suit for specific performance. In that regard, further reliance has been
placed upon the judgment of Shakeel Ahmed Versus Syed Akhlaq Hussain3.
7.15. Further, the receipt dated 03rd August, 1989 categorically mandates
entering into a deed of sale, therefore, it cannot be said that the GPA is as
good as a sale deed, as payments were yet to be made on the date when the
GPA had been executed.
7.16. The respondent nos. 1 to 8 are estopped from seeking possession
under Section 53-A of the TP Act on the basis of part-performance as the
same is inherently contradictory to the case of the contesting respondents
that they are the owners of the suit property vide the GPA.
7.17. The benefit under Section 53-A of the TP Act is not available to the
purchasers, since they kept quiet, remained passive, and took no effective
steps, even when the suit for specific performance was barred by time. Thus,
the respondent nos. 1 to 8 cannot be said to be willing to perform their
obligations under the Agreement to Sell. Further, if the argument of the
respondent nos. 1 to 8 is to be accepted, a part performer would take control
over the property till eternity without ever performing the contract.
7.18. The benefit under Section 53-A of the TP Act is only with respect to a
contract in writing and therefore, the respondents could not rely on this
provision on the basis of an alleged oral understanding.
2
2018 SCC OnLine Del 9903.
3
(2023) 20 SCC 655.
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7.19. The GPA is not irrevocable, and lapsed after the death of the principal,
Smt. Nirmal Krishan on 03rd August, 1990. An Agreement to Sell coupled
with a GPA, even where both documents are contemporaneous, executed in
favour of the same person and described as ‘irrevocable’, is neither
irrevocable nor does it create title or ownership in favour of the GPA holder
or create any ‘interest’ in the subject-matter, so as to attract the protection of
Section 202 of the Contract Act.
7.20. The GPA, in the present case, does not satisfy the mandatory
requirements of Section 202 of the Contract Act, since no proprietary or
protectable interest whatsoever was created in favour of respondent nos. 1 to
8.
7.21. The suit in question is maintainable being one based on title and is
well within the limitation period. The law stands settled that when title is
directly in issue and adjudication on title is necessary for deciding
possession, a suit for possession or injunction is perfectly maintainable
without a separate declaratory relief. Where the question of title is directly
and substantially in issue, and where the Court must determine title in order
to grant the relief sought, no independent declaratory relief is necessary.
7.22. Once the Trial Court framed and decided the issue of ownership, the
appellant’s suit for possession, being a suit based on title, did not require a
separate prayer for cancellation of the underlying documents. Thus, the suit
is fundamentally one which is based on title and was filed within the
limitation period of 12 years under Article 65 of the Limitation Act, 1963
(“Limitation Act“).
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7.23. A co-owner is entitled to protect the joint property and may sue for
possession or injunction without impleading every other co-owner, so long
as there is no conflict of interest between them.
IV. SUBMISSIONS MADE BY RESPONDENT NOS. 1 TO 8
8. Rebutting the contentions of the appellant, the respondent nos. 1 to 8
have raised the following arguments before this Court:
8.1. The suit filed before the Trial Court was completely frivolous and
vexatious, wherein, a sale transaction in relation to an immovable property,
was sought to be challenged after approximately 11 years, and that too, not
by the sellers, but by the children of one of the sellers, who has passed away.
The original surviving sellers were also approached by the plaintiffs at the
time of filing of suit, however, they refused to join them in the same,
showcasing that the suit was baseless and dishonest.
8.2. The contentions of the appellant that the Agreement to Sell stood
cancelled cannot be accepted, given the conduct of the parties to the
Agreement to Sell.
8.3. Even though the time limit to pay the amount of Rs. 62.4 Lacs expired
on 20th June, 1989 as per Clause 4 of the Agreement to Sell, the sellers did
not forfeit the sum of Rs. 10.5 Lacs. Rather, the sellers acquiesced and
continued with the transaction as they accepted a further sum of Rs. 12 Lacs
on 01st August, 1989 and a sum of Rs. 15 Lacs on 03rd August, 1989, from
the purchasers, and handed over the possession of the suit property to the
purchasers. On the same date, the sellers also executed an irrevocable GPA,
whereby, the purchasers were given rights akin to an owner.
8.4. The parties had arrived at an oral understanding that the purchasers
shall take all the steps required to recover possession from the tenants and
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any payments made in this regard to the tenants shall be adjusted against the
balance sale consideration.
8.5. In line with this oral understanding, the receipt dated 03rd August,
1989 stated the balance sale consideration shall be paid at the time of
registration of the sale deed, as the amounts which the purchasers may have
to pay to the tenants were not known at this stage. The receipt does not, by
any stretch, bar the respondent nos. 1 to 8 from asserting that there existed
any oral understanding with the sellers.
8.6. The oral understanding arrived between the parties is not hit by
Sections 91 and 92 of the Evidence Act, since the purpose of the said
provisions is to only exclude oral evidence that varies or contradicts a
written agreement or instrument. The payment receipt dated 03rd August,
1989 acknowledges that subsequent to handing of possession of the suit
property to the contesting respondents and execution of irrevocable GPA, the
Agreement to Sell dated 24th January, 1989 has been ‘modified’ to that
extent. Therefore, to prove said oral understanding, the contesting
respondents can certainly lead appropriate oral evidence.
8.7. The plaintiffs had, in fact, sought a decree on admission in the
underlying suit, by heavily relying on Sections 91 and 92 of the Evidence
Act, to contend that no oral evidence to prove payment of full consideration
is permissible in this case. Their application, in this regard, was dismissed by
this Court and subsequently, the said decision was upheld by the Division
Bench of this Court, which categorically held that the matter required
leading of evidence and the onus was upon the plaintiffs therein to explain
the conduct of their mother and other co-sellers. The said decision of the
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Division Bench was further upheld by the Supreme Court vide order dated
23rd November, 2012.
8.8. However, the plaintiffs have failed to explain the conduct of the
sellers and the evidence led by the contesting respondents regarding the oral
understanding remains un-rebutted.
8.9. Since the sellers handed over the possession to the purchasers and also
irrevocably conveyed all rights akin to an owner through the GPA, it is clear
that they had received what they considered as adequate sale consideration.
8.10. Had the sellers not been satisfied with the aforesaid understanding,
there would have been no occasion for them to hand over the possession and
execute the GPA.
8.11. It is in line with this understanding, that the purchasers paid a sum of
Rs. 45 Lacs to the tenants on 24th February, 1990. Further, the sellers on 25th
April, 1990 also accepted Demand Drafts for a sum of Rs. 8,23,646.72/-
from the purchasers, and submitted the same to the L&DO to revoke re-entry
proceedings. Thus, the purchasers have paid a total sum of Rs.
90,73,646.67/- for the suit property, which is more than the sale
consideration under the Agreement to Sell. Since no balance sale
consideration remained to be paid, none was ever demanded by the sellers
and the sale transaction had been concluded.
8.12. Thereafter, on 14th March, 1991, the sellers informed the purchasers
about certain challans received from the MCD for payment of property
taxes, and that there were certain mistakes in the calculations therein.
Therefore, the purchasers could take up the matter with the MCD. This
conduct of the sellers is consistent with the parties, who have no remaining
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rights, interests or obligations in relation to the said property, including
payment of statutory dues.
8.13. The appellant has further alleged that the understanding with respect
to paying tenants to vacate the suit property is prohibited under the
provisions of DRC Act. The said objection was never taken by the appellant
in her pleadings.
8.14. The intention of the legislature behind Section 5(3) of the DRC Act
was to protect a statutory tenant and not assist a third-party, who has no
locus, to setup a dishonest challenge to a different contract. The challenge
under this provision could have only been raised by a tenant and the same is
not applicable where the tenant raises no grievance and willingly
relinquishes the tenancy.
8.15. The reliance placed by the appellants on the alleged letter dated 23rd
November, 1993, allegedly written by Shri. G.D. Krishan to respondent no. 7
is devoid of any merits, as the said letter is forged or fabricated and no such
letter was ever sent to the contesting respondents.
8.16. The plaintiffs have placed reliance on the photocopy of the
Acknowledgement Due Card (“AD Card”) bearing a stamp of a money
order. However, the purchasers have led evidence of witnesses from the
postal department, who confirmed that the postal department does not use
any such stamp.
8.17. The fact that respondent nos. 1 to 8 have paid a lease rent for the suit
property for a period of ten years from the year 1989 to 1998 shows that the
sale transaction has been concluded and the Agreement to Sell has not been
cancelled.
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8.18. The suit in question came to be filed only after 11 years of the
execution of the Agreement to Sell, GPA and the possession being handed
over to the purchasers, and pursuant to the death of Shri G.D. Krishan. This
is because the plaintiffs could not have filed the suit during the lifetime of
their parents, who were satisfied with the receipt of the full sale
consideration and treated the transaction as a concluded one. This is also
substantiated by the statement of the appellant during her cross-examination
that the other co-sellers refused to join her in the underlying suit.
8.19. Plaintiff, being a purported successors-in-interest to one of the original
sellers, has no locus to contend that the Agreement to Sell stood cancelled,
when her predecessor-in-interest clearly acted in a manner contrary to such
assertions.
8.20. Since the plaintiffs have admitted to the execution of the Agreement to
Sell, GPA and the fact of possession, the relief claimed with respect to the
possession and mandatory injunction in the plaint is untenable, as no
cancellation of the Agreement to Sell and GPA, has been sought. Since the
appellant in her cross-examination has confirmed that the possession of the
suit property has not been taken forcibly by the purchasers, she has admitted
that possession was handed over in terms of Agreement to Sell and GPA.
Therefore, no relief as to recovery of possession can be sought without
seeking the principal relief of cancellation in relation to such documents.
8.21. The purchasers have all rights akin to ownership on the basis of the
irrevocable GPA, since the GPA remains unchallenged. Further, the rights
under the said GPA do not lapse with the death of the executors and the
rights of the purchasers stand protected under Section 200 of the Contract
Act.
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8.22. Even if it assumed that the transaction was not concluded, the
possession of the respondent over the suit property is protected under the
principle of part-performance as per Section 53-A of the TP Act.
8.23. The contesting respondents have been in uninterrupted and continuous
possession of the suit property since at least August, 1989 and the same has
never been challenged or disputed by the sellers. Therefore, without
prejudice, even if the appellant’s contention was to be accepted, the only
legal remedy of the plaintiffs was to file a suit for payment of the balance
sale consideration.
8.24. In order to enjoy the protection under Section 53-A of the TP Act, the
purchasers in possession need not file a suit for specific performance for
execution of a sale deed.
8.25. In order to sustain the relief sought in the plaint, a challenge to the
GPA and the Agreement to Sell was mandatory. Further, the period of
limitation to such a challenge is 3 years as per Article 58 of the Limitation
Act. Since said period expired on 03rd August, 1992 and 24th January, 1992,
respectively, thus, the suit is barred by limitation.
V. ANALYSIS AND FINDINGS
9. This Court has heard the arguments of the parties, and perused the
documents and evidence on record.
a. Subsistence of the Agreement to Sell dated 24th January, 1989
10. The first question for consideration before this Court is, as to whether
the Agreement to Sell dated 24th January, 1989, executed by the sellers in
favour of respondent nos. 1 to 8, i.e., the purchasers, stood cancelled or
continued to subsist.
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11. The undisputed facts that emerge from the pleadings and evidence on
record is that an Agreement to Sell dated 24th January, 1989, Ex. PW-1/2,
was executed by three individual co-owners, namely, Shri Sanjeev
Sethi/respondent no. 10, Shri Rajeev Luthra/respondent no. 9 and Late Smt.
Nirmal Krishan, mother of appellant and respondent no. 11, in favour of
respondent nos. 1 to 8 herein.
12. The plaintiff no. 1/appellant, passed away during the proceedings
before this Court. She was substituted by her LRs. The LRs of the deceased
plaintiff no.1/appellant, have vehemently argued that since the entire
payment as per the Agreement to Sell dated 24th January, 1989 was never
made by the respondent nos. 1 to 8, the Agreement to Sell stood
automatically cancelled in terms of Clause 1, read with Clause 4 therein, for
failure in performing their contractual obligation.
13. In this regard, it is to be noted that under the Agreement to Sell, a total
consideration of Rs. 80.70 Lacs was payable. Clause 2 of the Agreement to
Sell records the receipt of a sum of Rs. 10.50 Lacs by the sellers, as part-
consideration. As per Clause 4 of the Agreement to Sell, another amount of
Rs. 62.40 Lacs was to be paid after obtaining Clearance Certificate under
Section 269UC of the Income Tax Act or within 6 months, whichever date
was later, failing which, the transaction would stand cancelled and part
payment of Rs. 10.50 Lacs, shall stand forfeited.
14. Further, Clause 5 provides that the sellers shall take steps for
cancellation of re-entry proceedings, and compromise with the
lessors/L&DO. Any amount demanded by the lessors shall be borne by the
purchasers, and the same would be adjusted in the consideration payable.
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15. Clause 6 of the Agreement to Sell further provides that upon delivery
of the possession, the sellers shall obtain income tax clearance under Section
238 of the Income Tax Act, and the purchasers shall pay the balance sale
consideration of Rs. 7.80 Lacs.
16. The Clearance Certificate for sale under Section 269UC of the Income
Tax Act was received on 07th March, 1989. The stipulated period of 6
months, as agreed under Clause 4 of the Agreement to Sell, lapsed on 20th
June, 1989. However, the said amount of Rs. 62.40 Lacs was not paid by the
purchasers till said date.
17. This Court notes that despite the lapse of the time period provided
under the Agreement to Sell, the sellers did not forfeit the sum of Rs. 10.50
Lacs already paid by the purchasers. Rather, even after the expiry of the time
period under Clause 4 of the Agreement to Sell, a sum of Rs. 12 Lacs was
received and accepted by the sellers from the purchasers towards sale
consideration on 01st August, 1989, by way of two Demand Drafts for Rs. 6
Lacs each, marked as Ex. DW-1/5 (A)-(B). The said payment of Rs. 12 Lacs
was also acknowledged by the sellers vide a receipt dated 01st August, 1989,
marked as Ex. DW-1/6, in this regard.
18. The sellers subsequently accepted a sum of Rs. 15 Lacs from the
purchasers on 03rd August, 1989, by way of three Demand Drafts, for sum of
Rs. 5 Lacs each, marked as Ex. DW-1/7-(a)-(b)-(c).The payment of Rs. 15
Lacs was acknowledged by the sellers by issuing the receipt dated 03rd
August, 1989, marked as Ex. DW-1/8.
19. The aforesaid receipt dated 03rd August, 1989 also records that the
sellers handed over the vacant physical possession of the self-occupied
portion and symbolic possession of the tenanted portion of the suit property
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to the purchasers. It also states that the purchasers shall be entitled to claim
the rent amount and the Agreement to Sell, stands modified to this extent.
Further, the said receipt also mentions the fact of execution of the
irrevocable GPA. The said GPA dated 03rd August, 1989, marked as Ex. DW-
1/10, was executed by the sellers in favour of respondent no. 7 herein. The
receipt dated 03rd August, 1989, modifying the terms of the Agreement to
Sell dated 24th January, 1989, is reproduced as under:
―xxx xxx xxx
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xxx xxx xxx‖
20. Thereafter, the sellers approached the L&DO for revocation of re-
entry proceedings with respect to the suit property. In terms of Clause 5 of
the Agreement to Sell, the purchasers paid an amount of Rs. 8,23,646.72/- on
25th April, 1990 to the sellers by way of a Demand Draft. The said payment
was acknowledged by way of a receipt by Shri Rajeev Luthra, i.e., one of the
sellers. Thereafter, the sellers paid the requisite amount to the L&DO for
revocation of the re-entry proceedings.
21. Further, by way of the letter dated 14th March, 1991, marked as Ex.
DW-1/17, Shri Rajeev Luthra wrote to Shri U.S. Sitani, respondent no. 7
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herein, that he received two challans from the MCD for payment of property
tax, and that there seemed to be some mistake in the calculations done by the
MCD. He, thus, requested respondent no. 7 herein to take up the matter with
the MCD and have the records corrected.
22. It bears consideration as to why Shri Rajiv Luthra would address the
said letter calling upon Shri U.S. Sitani, to take up the matter of property tax
with the MCD, if he treated the Agreement to Sell as having been cancelled,
for any alleged non-payment of balance sale consideration. Rather, said
letter is consistent with the conduct of a person who no longer had any
interest in the statutory obligations that came with the suit property, and who
did not treat the Agreement to Sell as having been cancelled.
23. It is also to be noted that the purchasers, respondent nos. 1 to 8 herein,
have been paying statutory dues towards payment of the lease rent to the
L&DO, as well as property tax to the MCD with respect to the suit property
since 1989. The documents with regard thereto are before this Court, and
marked as Ex. DW-1/16 (a)-(i).
24. Thus, from the aforesaid sequence of conduct of the original sellers, it
is manifest that the sellers never treated the Agreement to Sell as cancelled,
at any point of time. The subsequent payments, after lapse of the time period
under Clause 4 of the Agreement to Sell, have been established during the
course of evidence. Rather than cancelling the Agreement to Sell, all the
signatories thereto, i.e., the sellers, executed the GPA dated 03rd August,
1989 in favour of respondent no. 7, thereby handing over possession of the
suit property to the purchasers.
25. Moreover, it is undisputed that the original sellers never demanded
any alleged balance amount from the purchasers due under the Agreement to
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Sell, executed between the parties. None of the original owners/ sellers
initiated any legal action against the purchasers, respondent nos. 1 to 8.
26. The appellant has also admitted that her mother did not take any
action against the respondents while she was alive. It is imperative to note
that it is not the case of the appellant that her mother was constrained or
compelled by any circumstances in not filing the suit or taking any legal
action while she was alive. Not even a single letter or correspondence has
been shown by the appellant to prove that her mother, or the other two
sellers, ever demanded any balance sale consideration from the purchasers.
27. Although the appellant alleges that the Agreement to Sell was
cancelled, the exact date as to when it was cancelled, has not been
mentioned. No pleading has been made in the plaint to the effect that any
legal notice was sent to the purchasers/ respondent nos. 1 to 8, that the
Agreement to Sell, stood cancelled.
28. This Court finds it incomprehensible that the sellers not only parted
with the possession of the suit property even though they allegedly did not
receive almost half of the sale consideration, but took no further steps
whatsoever, for 11 years to secure the alleged balance sale consideration.
The said inaction of the original sellers, coupled with the lack of any
justification/explanation as to the said conduct, makes the case put forth by
the appellant highly improbable.
29. The aforesaid narration is a clear pointer to the fact that the sellers
have consistently acted upon the Agreement to Sell by accepting payments
repeatedly from the purchasers, and handing over the possession of the suit
property to the purchasers. From the evidence on record, it is manifest that
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the appellant failed to prove that sellers treated the Agreement to Sell, as
having been cancelled.
30. The conduct of the sellers clearly establishes that they acquiesced and
ratified the Agreement to Sell, and hence it cannot be contended that the
Agreement to Sell stood cancelled. Further, the appellant has nowhere
pleaded that the sale consideration admitted to have been received by the
sellers, was ever returned to the purchasers. Therefore, the appellant cannot
be allowed to contend that the Agreement to Sell, stood cancelled.
31. In this regard, it would be apposite to refer to the decision in the case
of Union of India and Others Versus N. Murugesan and Others4, wherein,
the Supreme Court held that acquiescence, whether by words or conduct, is
an exception to termination of contract. Additionally, where one knowingly
accepts benefits of a contract, he is estopped from denying the
validity/binding effect of such contract, as the law does not permit a person
to both approbate and reprobate or blow hot and cold. The relevant
paragraphs of the said decision are reproduced as under:
―xxx xxx xxx
19. Section 39 deals with the effect of the refusal of the party to
perform a promise wholly. Though we are not concerned with this
provision, this provision is the only one that speaks of the concept of
acquiescence, which could be signified by words or conduct, being
an exception for terminating the contract. Under this provision, a
promisee may put an end to the contract unless there exists an
element of acquiescence that could be seen and exhibited through
his words or conduct. Obviously, such a contract which would also
involve words or conduct, is to be seen on the facts of each case.
xxx xxx xxx
25. Acquiescence would mean a tacit or passive acceptance. It is
implied and reluctant consent to an act. In other words, such an
action would qualify a passive assent. Thus, when acquiescence4
(2022) 2 SCC 25.
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takes place, it presupposes knowledge against a particular act. From
the knowledge comes passive acceptance, therefore instead of taking
any action against any alleged refusal to perform the original
contract, despite adequate knowledge of its terms, and instead being
allowed to continue by consciously ignoring it and thereafter
proceeding further, acquiescence does take place. As a consequence,
it reintroduces a new implied agreement between the parties. Once
such a situation arises, it is not open to the party that acquiesced
itself to insist upon the compliance of the original terms. Hence,
what is essential, is the conduct of the parties. We only dealt with the
distinction involving a mere acquiescence. When acquiescence is
followed by delay, it may become laches. Here again, we are inclined
to hold that the concept of acquiescence is to be seen on a case-to-
case basis.
Approbate and reprobate
26. These phrases are borrowed from the Scots law. They would only
mean that no party can be allowed to accept and reject the same
thing, and thus one cannot blow hot and cold. The principle behind
the doctrine of election is inbuilt in the concept of approbate and
reprobate. Once again, it is a principle of equity coming under the
contours of common law. Therefore, he who knows that if he objects
to an instrument, he will not get the benefit he wants cannot be
allowed to do so while enjoying the fruits. One cannot take
advantage of one part while rejecting the rest. A person cannot be
allowed to have the benefit of an instrument while questioning the
same. Such a party either has to affirm or disaffirm the transaction.
This principle has to be applied with more vigour as a common law
principle, if such a party actually enjoys the one part fully and on
near completion of the said enjoyment, thereafter questions the other
part. An element of fair play is inbuilt in this principle. It is also a
species of estoppel dealing with the conduct of a party. We have
already dealt with the provisions of the Contract Act concerning the
conduct of a party, and his presumption of knowledge while
confirming an offer through his acceptance unconditionally.
27. We would like to quote the following judgments for better
appreciation and understanding of the said principle:
27.1. Nagubai Ammal v. B. Shama Rao [Nagubai Ammal v. B.
Shama Rao, 1956 SCR 451: AIR 1956 SC 593]: (AIR pp. 601-02, para
23)
“23. But it is argued by Sri Krishnaswami Ayyangar that as the
proceedings in OS. No. 92 of 1938-39 are relied on as barring the
plea that the decree and sale in OS. No. 100 of 1919-20 are not
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principle that a person cannot both approbate and reprobate. It is
immaterial that the present appellants were not parties thereto, and
the decision in Verschures Creameries Ltd. v. Hull & Netherlands
Steamship Co. Ltd. [Verschures Creameries Ltd. v. Hull &
Netherlands Steamship Co. Ltd., (1921) 2 KB 608 (CA)], and in
particular, the observations of Scrutton, LJ., at p. 611 were quoted
in support of this position. There, the facts were that an agent
delivered goods to the customer contrary to the instructions of the
principal, who thereafter filed a suit against the purchaser for price
of goods and obtained a decree.
Not having obtained satisfaction, the principal next filed a suit
against the agent for damages on the ground of negligence and
breach of duty. It was held that such an action was barred. The
ground of the decision is that when on the same facts, a person has
the right to claim one of two reliefs and with full knowledge he
elects to claim one and obtains it, it is not open to him thereafter to
go back on his election and claim the alternative relief. The
principle was thus stated by Bankes, L.J.: (Verschures Creameries
Ltd. case [Verschures Creameries Ltd. v. Hull & Netherlands
Steamship Co. Ltd., (1921) 2 KB 608 (CA)], KB p. 611)
‗… Having elected to treat the delivery to him as an authorised
delivery they cannot treat the same act as a misdelivery. To do so
would be to approbate and reprobate the same act.’
The observations of Scrutton, L.J. on which the appellants rely are
as follows: (Verschures Creameries Ltd. case [Verschures
Creameries Ltd. v. Hull & Netherlands Steamship Co. Ltd., (1921)
2 KB 608 (CA)], KB pp. 611-12)
‗… A plaintiff is not permitted to ―approbate and reprobate‖. The
phrase is apparently borrowed from the Scotch law, where it is
used to express the principle embodied in our doctrine of election
— namely, that no party can accept and reject the same instrument
: Ker v. Wauchope [Ker v. Wauchope, (1819) 1 Bligh PC 1 at p. 21
: 4 ER 1 at p. 8] : Douglas-Menzies v. Umphelby [Douglas-
Menzies v. Umphelby, 1908 AC 224 at p. 232 (PC)] . The doctrine
of election is not however confined to instruments. A person cannot
say at one time that a transaction is valid and thereby obtain some
advantage, to which he could only be entitled on the footing that it
is valid, and then turn round and say it is void for the purpose of
securing some other advantage. That is to approbate and reprobate
the transaction.’
It is clear from the above observations that the maxim that a
person cannot ―approbate and reprobate‖ is only one application
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of the doctrine of election, and that its operation must be confined
to reliefs claimed in respect of the same transaction and to the
persons who are parties thereto. The law is thus stated
in Halsbury’s Laws of England, Vol. XIII, p. 464, para 512:
‗On the principle that a person may not approbate and
reprobate, a species of estoppel has arisen which seems to be
intermediate between estoppel by record and estoppel in pais, and
may conveniently be referred to here. Thus a party cannot, after
taking advantage under an order (e.g. payment of costs), be heard
to say that it is invalid and ask to set it aside, or to set up to the
prejudice of persons who have relied upon it a case inconsistent
with that upon which it was founded; nor will he be allowed to go
behind an order made in ignorance of the true facts to the
prejudice of third parties who have acted on it.’
27.2.State of Punjab v. Dhanjit Singh Sandhu [State of
Punjab v. Dhanjit Singh Sandhu, (2014) 15 SCC 144]: (SCC pp. 153-
54, paras 22-23 & 25-26)
―22. The doctrine of ―approbate and reprobate‖ is only a
species of estoppel, it implies only to the conduct of parties. As in
the case of estoppel it cannot operate against the provisions of a
statute. (Vide CIT v. MR. P. Firm Muar [CIT v. MR. P. Firm Muar,
AIR 1965 SC 1216].)
23. It is settled proposition of law that once an order has been
passed, it is complied with, accepted by the other party and derived
the benefit out of it, he cannot challenge it on any ground.
(Vide Maharashtra SRTC v. Balwant Regular Motor
Service [Maharashtra SRTC v. Balwant Regular Motor Service,
AIR 1969 SC 329].) In R.N. Gosain v. Yashpal Dhir [R.N.
Gosain v. Yashpal Dhir, (1992) 4 SCC 683] this Court has
observed as under: (R.N. Gosain case [R.N. Gosain v. Yashpal
Dhir, (1992) 4 SCC 683], SCC pp. 687-88, para 10)
‗10. Law does not permit a person to both approbate and
reprobate. This principle is based on the doctrine of election
which postulates that no party can accept and reject the same
instrument and that ‗a person cannot say at one time that a
transaction is valid and thereby obtain some advantage, to which
he could only be entitled on the footing that it is valid, and then
turn round and say it is void for the purpose of securing some
other advantage’.’
* * *
25. The Supreme Court in Rajasthan State Industrial
Development & Investment Corpn. v. Diamond & Gem
Development Corpn. Ltd. [Rajasthan State Industrial
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Development & Investment Corpn. v. Diamond & Gem
Development Corpn. Ltd., (2013) 5 SCC 470: (2013) 3 SCC (Civ)
153], made an observation that a party cannot be permitted to
―blow hot and cold‖, ―fast and loose‖ or ―approbate and
reprobate‖. Where one knowingly accepts the benefits of a
contract or conveyance or an order, is estopped to deny the
validity or binding effect on him of such contract or conveyance
or order. This rule is applied to do equity, however, it must not be
applied in a manner as to violate the principles of right and good
conscience.
26. It is evident that the doctrine of election is based on the
rule of estoppel, the principle that one cannot approbate and
reprobate is inherent in it. The doctrine of estoppel by election is
one among the species of estoppel in pais (or equitable estoppel),
which is a rule of equity. By this law, a person may be precluded,
by way of his actions, or conduct, or silence when he has to speak,
from asserting a right which he would have otherwise had.‖
27.3.Rajasthan State Industrial Development & Investment
Corpn. v. Diamond & Gem Development Corpn. Ltd. [Rajasthan State
Industrial Development & Investment Corpn. v. Diamond & Gem
Development Corpn. Ltd., (2013) 5 SCC 47: (2013) 3 SCC (Civ) 153]:
(SCC pp. 480-81, paras 15-16)
―I. Approbate and reprobate
15. A party cannot be permitted to ―blow hot-blow cold‖, ―fast
and loose‖ or ―approbate and reprobate‖. Where one knowingly
accepts the benefits of a contract, or conveyance, or of an order, he
is estopped from denying the validity of, or the binding effect of such
contract, or conveyance, or order upon himself. This rule is applied
to ensure equity, however, it must not be applied in such a manner so
as to violate the principles of what is right and of good conscience.
[Vide Nagubai Ammal v. B. Shama Rao [Nagubai Ammal v. B. Shama
Rao, 1956 SCR 451: AIR 1956 SC 593], CIT v. V. MR. P. Firm
Muar [CIT v. MR. P. Firm Muar, AIR 1965 SC 1216], Ramesh
Chandra Sankla v. Vikram Cement [Ramesh Chandra
Sankla v. Vikram Cement, (2008) 14 SCC 58: (2009) 1 SCC (L&S)
706], Pradeep Oil Corpn. v. MCD [Pradeep Oil Corpn. v. MCD,
(2011) 5 SCC 270: (2011) 2 SCC (Civ) 712], Cauvery Coffee
Traders v. Hornor Resources (International) Co. Ltd. [Cauvery Coffee
Traders v. Hornor Resources (International) Co. Ltd., (2011) 10 SCC
420: (2012) 3 SCC (Civ) 685] and V.
Chandrasekaran v. AdministrativeOfficer [V.
Chandrasekaran v. Administrative Officer, (2012) 12 SCC 133: (2013)
2 SCC (Civ) 136 : (2013) 4 SCC (Cri) 587: (2013) 3 SCC (L&S)
416].]
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16. Thus, it is evident that the doctrine of election is based on the
rule of estoppel–the principle that one cannot approbate and
reprobate is inherent in it. The doctrine of estoppel by election is one
among the species of estoppel in pais (or equitable estoppel), which
is a rule of equity. By this law, a person may be precluded, by way of
his actions, or conduct, or silence when it is his duty to speak, from
asserting a right which he would have otherwise had.‖
xxx xxx xxx‖
(Emphasis Supplied)
32. Likewise, holding that an agreement to extend the time period for
performance of a contract need not necessarily be reduced to writing, and
may be proved by oral evidence or conduct of parties, including forbearance,
the Supreme Court in the case of S. Brahmanand and Others Versus K. R.
Muthugopal (Dead) and Others5, has held as follows:
―xxx xxx xxx
34. Thus, this was a situation where the original agreement of 10-3-
1989 had a ―fixed date‖ for performance, but by the subsequent
letter of 18-6-1992 the defendants made a request for postponing the
performance to a future date without fixing any further date for
performance. This was accepted by the plaintiffs by their act of
forbearance and not insisting on performance forthwith. There is
nothing strange in time for performance being extended, even
though originally the agreement had a fixed date. Section 63 of the
Contract Act, 1872 provides that every promisee may extend time for
the performance of the contract. Such an agreement to extend time
need not necessarily be reduced to writing, but may be proved by oral
evidence or, in some cases, even by evidence of conduct including
forbearance on the part of the other party. [See in this connection the
observations of this Court in Keshavlal Lallubhai Patel v. Lalbhai
Trikumlal Mills Ltd., 1959 SCR 213 : AIR 1958 SC 512, para 8. See
also in this connection Saraswathamma v. H. Sharad Shrikhande, AIR
2005 Kant 292 and K. Venkoji Rao v. M. Abdul Khuddur Kureshi, AIR
1991 Kant 119, following the judgment in Keshavlal Lallubhai Patel
(supra).] Thus, in this case there was a variation in the date of
performance by express representation by the defendants, agreed to
by the act of forbearance on the part of the plaintiffs. What was
originally covered by the first part of Article 54, now fell within the
5
(2005) 12 SCC 764.
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purview of the second part of the article. Pazhaniappa
Chettiyar v. South Indian Planting and Industrial Co. Ltd. [AIR
1953 Trav Co 161] was a similar instance where the contract when
initially made had a date fixed for the performance of the contract
but the Court was of the view that ―in the events that happened in
this case, the agreement in question though started with fixation of a
period for the completion of the transaction became one without
such period on account of the peculiar facts and circumstances
already explained and the contract, therefore, became one in which
no time was fixed for its performance‖ and held that what was
originally covered by the first part of Article 113 of the Limitation
Act, 1908 would fall under the second part of the said article because
of the supervening circumstances of the case.
xxx xxx xxx‖
(Emphasis Supplied)
33. Hence, the sequence of events that have transpired in the present case
is a clear pointer to the fact that the sellers never considered the Agreement
to Sell, as having been cancelled. Rather, the sellers affirmed and continued
with the transaction, by accepting payments even beyond the last date
envisaged under the Agreement to Sell, i.e., 20th June, 1989, and handing
over possession of the suit property to the purchasers.
34. The contention of the appellant that an alleged letter dated 23rd
November, 1993, had purportedly been sent by Shri G.D. Krishan to
respondent no. 7 herein, seeking payment of balance sale consideration, has
to be rejected. The evidence on record clearly points that the receipt of said
letter was never proved by the appellant, nor was the said letter acted upon,
by the alleged sender.
35. The plaintiffs in the suit failed to furnish the original AD Card and
only produced a photocopy of the same, bearing a stamp of a ‗money order’.
However, the contesting defendants led evidence of several witnesses from
the postal department, who confirmed that the postal department did not use
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a money stamp, and only used a date stamp. No evidence to counter this
position, or to otherwise prove delivery, was led by the plaintiffs.
36. In this regard, reference may be made to the deposition of DW-2, i.e.,
Shri Jai Bhagwan, retired Sub-Post Master, who has categorically stated in
his Evidence Affidavit that the postal AD Card bears a ‗money order’ stamp
which is not used on such cards and lacks proper postal stamping as there is
no date stamp on it. Thus, the said deposition clearly points out that the
postal AD Card with respect to the letter dated 23rd November, 1993, was not
genuine.
37. Further, DW-3, i.e., Shri Lalit Kumar, Postal Assistant, Passport Seva
Kendra, has deposed in his Evidence Affidavit that the ‗money order’ stamp
on the AD card is not used on such cards, as only date stamps are applied.
He further denied that the money stamp can be affixed by postal authorities
by an error.
38. To similar effect, DW-4, i.e., Shri Surender Saha, Post Master, Kalkaji
Head Office, has deposed that the AD Card was not proper, as it bears an
incorrect pin-code. Further, he deposed categorically that a‗money order’
stamp is not used on AD cards. He clarified that only metal date stamps are
used in post offices and not rubber stamps.
39. Likewise, DW-5, i.e., Shri Rajender Bahadur Singh, Post Master,
Naraina, Head Office has stated that the postal AD Card in support of letter
dated 23rd November, 1993, has a rubber stamp, whereas, only iron stamps
are used by the post office. He further deposed that a ‘REGD’ stamp is put in
AD Cards, which is missing in the AD card in question. Instead of a ‘REGD’
stamp, a ‗money order’ stamp has been put, which is not normally used on
AD Cards.
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40. Thus, the depositions of DW-2 to DW-5, clearly establishes that the
AD Card with regard to letter dated 23rd November,1993, was defective and
contained a ‗money order’ stamp, which is inconsistent with standard postal
practice of using a date stamp. Accordingly, the Trial Court rightly held that
the acknowledgment of the letter dated 23rd November, 1993, has not been
proved.
41. Even otherwise, it was admitted by the appellant that Shri G.D.
Krishan never took any steps on the basis of the alleged letter dated 23rd
November, 1993, though he remained alive for almost six years post the
purported letter. Thus, the reliance by the appellant on the said letter
becomes immaterial.
42. It is also undisputed that none of the sellers ever took any action, be it
by sending a letter or notice or filing a suit against the purchasers,
respondent nos. 1 to 8. Pertinently, in this regard, in her cross-examination,
the appellant has categorically deposed as follows:
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43. Perusal of the aforesaid deposition of the appellant clearly brings to
the fore that the sellers never initiated any action against the purchasers, with
respect to either recovery of any balance amount or possession of the suit
property. Further, when the appellant asked the other two original sellers,
i.e., respondent nos. 9 and 10 herein, to join in filing the suit, they refused to
join the appellant in the present suit.
44. The evidence on record points out that the transaction in question for
sale of the suit property was executed and validly concluded by the original
sellers. The sellers conducted themselves in a manner from which only one
conclusion can be drawn, i.e., that full sale consideration was received to
their satisfaction, in a mode and manner acceptable to them. Therefore, it is
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apparent that the sellers clearly considered the transaction as a concluded
one.
45. When the sellers and purchasers under the Agreement to Sell never
treated the same as being cancelled, and where the sellers, including the
mother of the appellant herein, have not asserted that any sale consideration
remained due, the appellant cannot contend that the Agreement to Sell stood
cancelled. In the garb of stepping into the shoes of her mother, who was one
of the original sellers, the appellant cannot seek to turn the clock back and
challenge a transaction which to the understanding of all the signatories to
the Agreement to Sell and GPA, had duly concluded/affirmed, and further
been reaffirmed by the conduct of all the parties.
46. Thus, the bare contention of the appellant, unsupported by any
evidence, after a passage of 11 years, that the Agreement to Sell stood
cancelled, has to be necessarily rejected.
b. Plea regarding payment of balance sale consideration raised by
appellant viz.-a-viz. plea of oral understanding raised by respondent
nos. 1 to 8/purchasers
47. The next question which arises for consideration before this Court is
as to whether it has been established that the balance amount towards the
sale consideration under the Agreement to Sell, has not been paid by the
purchasers, thereby, entitling the appellant to any relief.
48. With regard to the present issue, it is the stand of the purchasers, that
the parties had arrived at an oral understanding that the purchasers shall take
all steps required to recover the possession of the tenanted portion of the suit
property from the tenants, and any payments made by the purchasers to the
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tenants in this regard, shall be adjusted towards the payment of balance sale
consideration.
49. In contrast, the appellant has contended that there was no oral
understanding between the sellers and the purchasers, and the receipts dated
01st August, 1989 and 03rd August, 1989 categorically record that the balance
sale consideration was payable at the time of registration of Sale Deed.
50. Rebutting the same, respondent nos. 1 to 8 have asserted that the oral
understanding could not be recorded under the Agreement to Sell, the GPA
or the payment receipts, since the exact amount required to be paid to the
tenants for vacating the suit property could not have been contemplated by
the parties at the time of execution of these documents.
51. In essence, the issue before this Court is whether there existed an oral
understanding between the sellers and the purchasers, with respect to
adjusting the payments made to the tenants against the balance sale
consideration.
52. In this regard, law is settled that whether there existed an oral
understanding or not is a question of fact, and has to be determined in the
facts and circumstances of each individual case. Thus, in the case of Brij
Mohan and Others Versus Sugra Begum and Others6, it has been held as
follows:
―xxx xxx xxx
20. We have given our careful consideration to the arguments advanced
by learned counsel for the parties and have thoroughly perused the
record. We agree with the contention of the learned counsel for the
appellants to the extent that there is no requirement of law that an
agreement or contract of sale of immovable property should only be in
writing. However, in a case where the plaintiffs come forward to seek a6
(1990) 4 SCC 147.
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decree for specific performance of contract of sale of immovable
property on the basis of an oral agreement alone, heavy burden lies on
the plaintiffs to prove that there was consensus ad idem between the
parties for a concluded oral agreement for sale of immovable property.
Whether there was such a concluded oral contract or not would be a
question of fact to be determined in the facts and circumstances of each
individual case. It has to be established by the plaintiffs that vital and
fundamental terms for sale of immovable property were concluded
between the parties orally and a written agreement if any to be executed
subsequently would only be a formal agreement incorporating such
terms which had already been settled and concluded in the oral
agreement.
xxx xxx xxx‖
(Emphasis Supplied)
53. In order to prove the existence of the oral understanding between the
sellers and the purchasers, DW-1, i.e., Shri U.S. Sitani in his Evidence
Affidavit, has deposed as under:
―xxx xxx xxx
10. The receipt dated 03.08.1989 further states that the balance sale
consideration shall be paid at the time of registration of sale deed, and
that an irrevocable power of attorney in favour of the Deponent stands
executed. Vide the Agreement to Sell, it was agreed between the parties
that the purchaser i.e. the Defendants would pay another sum of Rs.
62,40,000/-and vacant physical possession was to be delivered
subsequent to payment of the said sum. However, at the stage of
issuance of the receipt dated 03.08.1989, the new understanding that
was arrived at between the parties was that any payments made by
the purchasers to the tenants, for having the property vacated, and/
or other payments made by the purchasers, for or on behalf of the
sellers, to statutory authorities such as L&DO etc., would be adjusted
against the final sale consideration payable to the sellers. That is the
reason why, although the said sum of Rs. 62.40 lakhs was not as yet
received by the sellers, vide the receipt dated 03.08.1989, the
possession was officially transferred on the said date.As on
03.08.1989, the clear understanding between the parties was that any
further consideration was payable to the sellers, only subject to, and
after adjusting payments made towards the tenant and/ or other
payments made on behalf of the sellers to statutory authorities such
as L&DO. In view of the fact that the exact amounts which the
purchasers may be required to pay on behalf of the sellers was not
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known on 03.08.1989, the balance sale consideration remaining
payable was not specified. It is for this reason that the receipt also
notices that the Agreement to sell dated 24.01.1989 stands modified, to
the extent that possession stands transferred. This understanding is
also clear from a reading of the General Power of Attorney executed
on the same date (03.08.1989) which virtually transferred all the
rights qua the property to the Defendant Nos. 1-8.
xxx xxx xxx
13. That thereafter, the Defendants no. 1 to 8, on 24.02.1990 got the
physical vacant possession of the tenanted portion of the suit
property from M/s. Bhardwaj Bhardwaj and Associates (i.e. the
tenants) against a payment of Rs. 25,00,000 and Rs. 20,00,000 for
the ground and first floor of the suit property respectively. That the
said possession w/ taken from the tenants under two separate
receipts, both dt. 24.02.1990. The said receipts are Exhibited as DW-
1/11 and DW-1/12 respectively.
xxx xxx xxx‖
(Emphasis Supplied)
54. As per the aforesaid deposition, the oral understanding was arrived at
the time of the receipt dated 03rd August, 1989, whereby, any payments made
by the purchasers to the tenants for having the suit property vacated, would
be adjusted against the final sale consideration payable to the sellers. Thus,
as per the case put forth by the purchasers, there was a clear understanding
that any further consideration would be payable to the sellers, only after
adjusting the payments made by the purchasers to the tenants and to
statutory authorities such as L&DO. Since the exact amount which the
purchasers would have been required to pay in this regard was not known,
the exact amount of sale consideration remaining payable, was not specified
in the receipt dated 03rd August, 1989.
55. Further, the statement of DW-1 during his cross-examination dated
10th September, 2018, is reproduced as under:
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―xxx xxx xxx
xxx xxx xxx‖
56. Perusal of the cross-examination clearly shows that the testimony of
the DW-1 remained unshaken during his cross-examination. This Court
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further notes that none of the sellers who were alive at that time, i.e., Shri
Rajiv Luthra and Shri Sanjeev Sethi entered the witness box to controvert
the testimony of DW-1, i.e., Shri U.S. Sitani with respect to the oral
understanding.
57. Further, it is to be noted that Clause 4 of the Agreement to Sell states
that the sellers had to deliver possession of the suit property to the
purchasers against the payment of Rs. 62.40 Lacs and call upon the tenants
to attorn to the purchasers. This Court finds force in the contention of the
respondent nos. 1 to 8 that although the entire sum of Rs. 62.40 Lacs had not
been received by the sellers as on 03rd August, 1989, the sellers executed the
receipt dated 03rd August, 1989, and transferred the vacant physical
possession of the self-occupied portion and the symbolic possession of the
tenanted portion of the suit property to the purchasers, in lieu of the oral
understanding between the parties, as aforesaid.
58. Had there been no such oral understanding, there would have been no
occasion for the sellers to transfer the possession of the suit property to the
purchasers, and modify the Agreement to sell to such extent.
59. This Court also notes that the sellers executed the GPA on 03rd August,
1989 in favor of the respondent no. 7. The appellant in her Evidence
Affidavit has categorically admitted that the GPA, marked as Ex. PW-1/4,
had been executed to facilitate the handing over of the possession of the suit
property to the purchasers, respondent nos. 1 to 8 herein, in terms of Clause
4 of the Agreement to Sell. The relevant portion of the Evidence Affidavit of
the appellant herein, is reproduced as under:
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―xxx xxx xxx
xxx xxx xxx‖
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60. A perusal of the GPA shows that wide sweeping powers were
conferred by the sellers in favor of the respondent no. 7, such as to carry
construction, to create lease, execute sale agreements, to deal with statutory
authorities with respect to the suit property, etc. Had there been no oral
understanding between the sellers and the purchasers, there would have been
no occasion for the sellers to grant such wide sweeping powers to respondent
no. 7 under the GPA, especially, when allegedly, almost half of the sale
consideration remained pending. In this regard, some important
authorizations given under the GPA dated 03rd August, 1989, as taken note
of by the learned Trial Court in paragraph 27 of the impugned judgment, are
reproduced as under:
―xxx xxx xxx
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61. It is in line with the oral understanding that the purchasers paid a sum
of Rs. 45 Lacs to the tenants on 24th February, 1990, by way of multiple
Demand Drafts as recorded in the two receipts dated 24th February, 1990,
acknowledging payments of Rs. 25 Lacs and Rs. 20 Lacs, and marked as
Ex.DW-1/11 and Ex.DW-1/12, respectively.
62. It is undisputed that the tenants handed over possession of the suit
premises under their possession to the purchasers as far back as the year
1989. The purchasers have continued with the possession of the entire suit
property even at the time of filing of the suit in the present case in the year
1999, and till date. There is nothing on record that there was any protest by
the sellers as to why the tenants had handed over possession to the
purchasers. Moreover, even the appellant has admitted that the
purchasers/respondent nos. 1 to 8, have not taken the possession forcibly.
Further, the purchasers had been paying the statutory dues with respect to the
suit property.
63. This Court also notes that the sellers accepted Demand Draft on 25th
April, 1990 for a sum of Rs. 8,23,646.72/- from the purchasers, and
submitted the same to the L&DO for revocation of re-entry proceedings.
This conduct of the sellers in accepting the money from the purchasers for
the purpose of depositing the same with the L&DO, is again in line with the
case put forward by the purchasers as regards an oral understanding between
the parties regarding payments to be made to the tenants and statutory
authorities, as set off against the balance sale consideration. The conduct of
the sellers in transferring possession, allowing the tenants to hand over the
vacant possession of the part of the premises occupied by them to the
purchasers, taking steps for revocation of the re-entry proceedings, and not
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raising any dispute or demand for any pending amount, makes it evident that
they were satisfied with the consideration they received and accepted it as
full payment with respect to the suit property.
64. Reference may also be made to the judgment in the case of S.V.
Narayanaswamy Versus Smt. Savitharamma, since deceased by her LRs.
and Others7, wherein, it has been held that the oral agreement stood proved
on the basis of the possession of the property in question by the appellant
therein and documents regarding payment of statutory dues, etc. Thus, it was
held as follows:
―xxx xxx xxx
92. There is no merit in the contention that the appellant has not
pleaded oral sale agreement. The appellant has pleaded all the
ingredients of the oral sale agreement i.e., the date of sale agreement,
the property agreed to be sold, the consideration, the amount paid, the
mode of payment, delivery of possession, putting up of construction,
demand to execute the sale deed, readiness and willingness to perform
his part of the contract. Therefore, there is no merit in the contention
that oral sale agreement is not pleaded. The pleadings conform to
form No. 47 and 48 of 1st schedule to CPC and Section 16 of the
Specific Relief Act.
93. The respondents contend that they are in possession and
enjoyment of the suit schedule property. They have produced Ex. P1
khatha certificate, Ex. P2 assessment register extract, Ex. P3 death
certificate of Venkatanarasimhaiah, Ex. P4 certified copy of the
lease cum sale agreement, Ex. P5 certified copy of the sale deed,
Ex.P6 copy of legal notice, exhibits P7 to P13, P15 and P16 tax paid
receipts, Ex. P14 copy of the order in disciplinary proceedings
against the appellant and others. Ex. P17 is the certified copy of the
order passed on issue No. 4. Ex. P18 is the certified copy of the
decree in O.S. No. 1920/1989.
94. The appellant contends that he was put in possession of the suit
schedule property pursuant to the sale agreement dated 17.12.79 and
the documents were handed over to him. The appellant has produced
possession certificate and the documents which were handed over to7
2013 SCC OnLine Kar 7650.
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him. PW.1 has deposed that the original possession certificate, lease
cum sale agreement and other documents pertaining to the suit
schedule property were given to the appellant as he was a GPA
holder. DW.1 and DW.2 have deposed that the documents were
handed over to the appellant on the date of sale agreement i.e., on
17.12.1979. There is no mention in the power of attorney Ex. D1 that
the documents were handed over to the appellant at the time of
executing Ex. D1 power of attorney. Therefore, it is clear, the
documents were handed over pursuant to the sale agreement dated
17.12.1979.
95. Thereafter, the appellant has obtained sanctioned plan as per Ex.
D.9. The documents produced by the appellant i.e., exhibits D.36 to
D.67 clearly show that the appellant has purchased construction
material and spent considerable amount to put up construction.
Exhibits D.36 to D.67 are receipts and cash bills for having purchased
cement, steel, boulders, stones, sand, jelly, bricks, tiles, borewell and
labour charges. The respondents have pleaded that the construction
was put up by late Venkatanarasimhaiah. PW. 1 has deposed that they
have put up construction in the suit property at their cost. The
respondents have not produced anything to show that the respondents
or late Venkatanarasimhaiah had put up construction or spent money
to put up construction or participated in the construction work.
Therefore, it is clear, the construction was put up by the appellant and
he has spent money. The claim of the respondents that they have put up
construction is baseless and cannot be accepted. The documents
produced by the appellant and the oral evidence on record clearly
show that the appellant was put in possession of the property by
virtue of the oral sale agreement dated 17.12.79 and he has put up
construction by spending considerable amount. The contention that
the respondents are in possession of the suit schedule property
cannot be accepted.
96. It is contended that Ex. D1 GPA dated 3.2.1982 was executed by A.
Venkatanarasimhaiah in favour of the appellant only for the purpose
of putting up construction. The appellant has acted only as an agent.
The GPA is not coupled with interest. It is determined by death.
Reliance was placed on the decision reported in 1993 (3) Kar. LJ page
331.
97. In Mohammed alias Podiya Beary v. AC, Puttur [1993 (3) Kar.
LJ page 331], this Court has held, a power of attorney is an
authority whereby one is authorised to act for another. Where all the
rights and liabilities under a contract were made over by a power of
attorney, such power is an agency coupled with interest. An authority
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coupled with interest is not determined by death, insanity or
bankruptcy of the principal. Power of attorney is ordinarily
construed strictly and general powers are interpreted in the light of
the special powers.
xxx xxx xxx
99. It is clear from the terms of GPA, the appellant has been
authorised to put up construction, to obtain license, to pay tax, to
apply for necessary permits, to get cement, steel etc., to enter into an
agreement or agreements to lease out, to realise rent, to manage,
supervise and direct construction, to pay after construction house
tax, light and water charges, to attend repairs or alteration, and to
defend all actions. Clause No. 15 of the GPA provides that the
executant i.e., Venkatanarasimhaiah shall not revoke the GPA until
such time that his attorney voluntarily seeks for such revocation. It
is clear, the GPA cannot be revoked until such time the appellant
seeks for its revocation. Therefore, it cannot be said that the GPA
was given only for the purpose of putting up construction. The GPA
authorises the appellant to enter into agreement, to lease out the
property, to attend to repairs and alteration, to pay tax and other
charges after construction. The GPA cannot be revoked until such
time the appellant voluntarily seeks for its revocation. Therefore, the
contention of the respondents that the GPA was given only for the
purpose of construction cannot be accepted and accordingly, it is
rejected.
100. The appellant is not claiming possession based on the GPA. The
appellant claims possession based on the oral sale agreement dated
17.12.1979. According to the appellant, he was put in possession on
17.12.1979 and documents were handed over. The appellant has
produced the documents handed over to him. DWs. 1 to 3 have
deposed regarding the oral sale agreement. The evidence of DWs. 1
to 3 coupled with admission of PW-1 clearly show that there was oral
sale agreement dated 17.12.1979 between the appellant and
Venkatanarasimhaiah and the entire sale consideration amount of
Rs. 16,000/- has been paid. The respondents contend that they are in
possession of the suit schedule property. But, the documents
produced by the appellant clearly show that he is in possession of the
suit schedule property and he has put up construction by spending
considerable amount.
101. Ex. D2 is the copy of the letter dated 22.4.1986 written by the
2nd respondent to the Spl. D.C., Urban Ceiling Bangalore requesting
to permit to sell the site. Ex.D2(a) is the signature of the
2nd respondent. Ex.D3 is the xerox of the notice under Section 26 of the
Urban Ceiling Regulation Act, 1976. Ex. D4 is the copy of the affidavit
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of A. Venkatanarasimhaiah in support of Ex. D3. Ex. D5 is the
endorsement. PW-1, in his evidence has denied his signature in Ex.
D2. DW-1 has deposed that Ex. D2 was handed over to him by the
2nd respondent and he has identified the signature of the
2nd respondent in Ex. D2 as Ex. D2(a). Ex. D3 and Ex. D4 are not
authenticated documents. Ex. D5 is the endorsement dated 25.4.1986
stating that notice issued under ULC(2) SR.607/85-86 dated 27.2.1986
is cancelled. Ex. D2 is the copy of the letter sent to the Urban Ceiling
Authority. It bears the signature of the 2nd respondent. The
2nd respondent i.e., PW.1 has denied his signature in Ex.D2 evasively
stating that Ex. D2(a) is not his signature because in Ex. D2 the
appellant is shown as his uncle, but, actually the appellant is not his
uncle. He has stated, he does not know whether his father had filed
application seeking permission to sell the property. He does not
remember whether the document shown to him is the endorsement
received by him from the Spl. D.C. ULC, Bangalore. Ex. D2 shows that
request was made to the ULC, Authority, Bangalore to sell the
property.
102. Exhibits D21, D22, D23, D25, D26 and D27 are copies of the
statements of assets and liabilities for the years 1983, 1984, 1985,
1988 and 1989 submitted by the appellant to the concerned authority.
In the said statements, the appellant has shown that the suit schedule
property belongs to him. However, exhibits D21, D22, D23, D25, D26
and D27 are not authenticated documents. Therefore, they cannot be
relied upon.
103. Exhibits D33, D34 and D35 are the letters addressed to the
appellant. In exhibits D33 and D34 the address shown is No. 106,
Koramangala, Bangalore, i.e., the suit schedule property.
104. Ex. D9 is the sanctioned plan obtained by the appellant. Ex. D11
is the cement allotment card. It is in the name of the appellant. Ex.
D19 is cash memo for having purchased cement. Exhibits D36 to D67
are the receipts and cash bills. They show that the appellant has
purchased the building material like cement, steel, boulders, stones,
sand, jelly, bricks, tiles and dug borewell and paid labour charges.
105. From the evidence on record, it is clear, that there was an oral
sale agreement between the appellant and A. Venkatanarasimhaiah
on 17.12.1979. Thereafter, Ex. D1 GPA has been executed on
3.2.1982. The appellant has put up construction after obtaining
sanctioned plan. The amount is spent by the appellant. The sale
consideration amount except Rs. 1,500/- has been paid through
cheque. A sum of Rs. 1,500/- has been paid in cash. Thus, the entire
sale consideration amount has been paid. The appellant has proved
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oral sale agreement dated 17.12.1979. Point No. 1 answered
accordingly holding that the appellant has proved oral sale
agreement dated 17.12.1979.
xxx xxx xxx‖
(Emphasis Supplied)
65. It is also pertinent to note that while rejecting the application filed by
the appellant herein, seeking a judgment under Order XII Rule 6 of the CPC,
this Court vide judgment dated 08th November, 2011, had observed as under:
―xxx xxx xxx
15. It is not in dispute that payments have been made to the tenants
by cheque. It is also not in dispute that tenants handed over
possession to the defendants as far back from the year 1989 till the
date of filing of the present suit i.e. in the year 2008. There was no
protest on the part of the plaintiffs as to why tenants had handed
over possession to the defendants nor any steps were taken by the
plaintiffs to safeguard their rights.
16. I have also carefully perused the General Power of Attorney,
which has been placed on record, which would prima facie show
that wide and extensive powers have been given to the defendants
and plaintiffs had for all intents and purposes severed all their rights
with respect to the suit property. The powers include the right to
reconstruct and right to sell. Prima facie reading of the General
Power of Attorney would show that the entire sale consideration has
been paid or else no ordinary prudent man would execute such a
Power of Attorney. This is also to be considered in the light of the
fact that plaintiffs considered it appropriate to hand over possession
of the suit property to the defendants and in case less than 50% of
the amount has been received by them there would have been no
occasion either to have executed such a Power of Attorney with such
sweeping powers or to put the defendants in possession of the suit
property. There is also no explanation much less a reasonable
explanation as to why the plaintiffs allowed the defendants to take
possession of the property from the tenants in case the sale
consideration was not paid. It has also not been explained as to why
during the life time of the original sellers no action was initiated by
them or the plaintiffs as according to the plaintiffs more than 50% of
the sale consideration was not paid to them. Applying the law laid
down by the Apex Court to the facts of this case and having regard to
the stand taken by the defendants in the written statement it cannot be
said that defendants have admitted that they have not paid the entireSignature Not Verified
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sale consideration to the plaintiffs. It is also not in dispute that
besides payments to the tenants, all of which fortunately have been
paid by means of cheques, the defendants have also paid a sum of
Rs.8.23 lakhs to L&DO to enable L&DO to withdraw the notice of
re-entry. The judgment, sought to be relied upon by learned senior
counsel for the plaintiffs in the case of FGP Limited (supra), is not
applicable to the facts of the present case as in the present matter as
per the defendants the entire sale consideration stands paid by them.
The question, whether the defendants were authorized to make the
payments or not, can only be decided on the basis of evidence.
xxx xxx xxx‖
(Emphasis Supplied)
66. In concurrence with the aforesaid findings of the learned Single Judge,
the Division Bench of this Court vide judgment dated 30th July, 2012 in
FAO(OS) 139/2012, upheld the judgment dated 08th November, 2011 in the
following manner:
―xxx xxx xxx
2. The agreement to sell records that the six companies who were
acting through their Directors U.S.Sitani and Leela Sitani, impleaded
as defendants No.7 and 8 in the suit, would pay ₹80,70,000/- as sale
consideration for sale of the house. It records Nirmal Krishan, Rajiv
Luthra and Sanjiv Sethi having received ₹10,50,000/- and envisages
that upon clearance being obtained under the Income Tax Act within
six months the six companies would pay another sum of ₹62,40,000/-
and the balance sum of ₹7,80,000/- would be paid when sale deed
would be executed. It stands further recorded that simultaneously upon
receipt of ₹62,40,000/- the sellers shall deliver vacant physical
possession of such portion of the house which was self-occupied and
symbolic possession of the rented portion to the buyers. The document
records that the property had been re-entered by the lessor and
envisages the purchasers to have the re-entry cancelled and such
amount as was payable to the lessor would be paid by the purchasers,
but the samewould be adjustable from the amount payable to the
sellers.
3. On August 03, 1989 Nirmal Krishan, Sanjiv Sethi and Rajiv
Luthra executed a General Power of Attorney in favour of
U.S.Sitani, describing him as the nominee of the six purchaser
companies; and under the General Power of Attorney empowered
him to deal with the property and do acts, which an owner could
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perform i.e. demolish the existing construction and reconstruct a
building, let out the property and even sell the same. And on the
same day handed over possession of such portions of the property as
were with Nirmal Krishan, Sanjiv Sethi and Rajiv Luthra and wrote
to the tenant to attorn to the purchasers. Thereafter the six
companies paid money to the tenant to vacate such portions of the
property as were tenanted, and in all paid ₹45,00,000/- to the tenant.
4. Since August 03, 1989 possession of the entire property remained
with the purchasers, who paid ₹8,23,646.72 to the lessor for the re-
entry to be revoked.
5. Noting that the agreed sale consideration was ₹80,70,000/- and
out of which as per the agreement to sell ₹10,50,000/- was received
by the sellers, the stage for paying further sum of ₹62,40,000/- was
within six months of the execution of the agreement to sell on
January 24, 1989 and that left balance sale consideration in sum of
₹7,80,000/-, to be paid, but from which amount such sum which the
purchasers had to pay to the lessor for revocation of the re-entry
notice had to be deducted, suffice would it be to state that if the
purchasers would have paid ₹62,40,000/-, no further amount was
payable to the sellers; rather it was the sellers who would have to
make a refund to the buyers inasmuch as the buyers paid
₹8,23,646.72 to the lessor.
6. Everything remained quiet till the appellants, Sunita Sinha and
her brother Arvind Krishan filed a suit on September 04, 2002 to
restrain defendants No.1 to 8 from using the property and for the
decree of possession.
7. In the written statement filed by defendants No.1 to 8, who we note
are the six purchasers companies and their two directors who
represented the companies, it was pleaded that the six companies are
the owners of the property having paid full sale consideration for the
same. It was pleaded that the suit filed in the year 2002 was highly
belated and was barred by limitation.
8. Now, as per the agreement to sell, the sale consideration in sum of
₹80,70,000/- had to be paid at three stages. Firstly when the
agreement to sell was executed. At this stage, ₹10,50,000/- was to be
paid; and was paid. The second stage was to pay ₹62,40,000/- within
six months. That left ₹7,80,000/- to be paid when sale deed was to be
executed, but from which such amount as was paid by the buyers to the
lessor for re-entry to be revoked had to be deducted. In the written
statement filed it was pleaded that the entire sale consideration was
paid, and suffice would it be to state that since ₹8,23,646.72 was
admittedly paid by the buyers to the lessor and further since
admittedly ₹10,50,000/- was paid to the sellers when the agreement to
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sell was executed, the defence would succeed if the buyers could prove
having paid ₹62,40,000/- to the sellers, in respect whereof it has been
pleaded in the written statement that entire sale consideration was
paid.
9. It may be true that there is no specific plea in the written statement
as to when ₹62,40,000/- was paid; the general plea taken is that the
entire sale consideration was paid, and it is equally true that no
documentary evidence by means of a receipt, acknowledgement or
payment by a mode under which there would be proof that
₹62,40,000/- flowed from the coffers of the buyers to those of the
sellers has been filed, but one fact of importance needs to be noted
i.e. the agreement to sell dated January 24, 1989 recording that
₹62,40,000/- would be paid within six months and simultaneously
therewith vacant possession of such portion of the property as was
with the sellers would be parted with to the buyers and symbolic
possession of the rest would be given, and that just at the expiry of
six months of January 24, 1989 i.e. on August 03, 1989 possession of
such portions as were with the sellers was handed over to the buyers
as also symbolic possession of the tenanted portion was handed over.
10. The appellants i.e. the plaintiffs filed IA No.3759/2010 under
Order XII Rule 6 CPC praying for a decree on admission in which it
was pleaded that the defendants have admitted the agreement to sell in
question; have admitted having paid ₹10,50,000/- out of the agreed
sale consideration in sum of ₹80,70,000/- and that in the absence of a
specific pleading and further in the absence of any proof that the
defendants paid ₹62,40,000/-, it is apparent that the purchasers have
not acquired any title to the property and thus a decree should follow.
11. Dismissing the application the learned Single Judge has held that
a suit can be decreed under Order XII Rule 6 CPC if there is a clear
admission, and none has been found.
12. Suffice would it be for us to note that an admission by a party may
be relied upon by the opposite party through the medium of a pleading
or even otherwise. But the law is clear, the admission must be clear
and unequivocal.
13. We do not find any admission made by the defendants which
warrants a decree to follow. It may be true that the defendants have
not pleaded the date when they paid ₹62,40,000/- to the sellers and
further have no documentary proof to sustain said fact. But conduct of
a party is also relevant and admissible evidence. The plaintiffs will
have to explain the conduct of their mother along with the other two
co-owners handing over vacant possession of such portions of the
suit property as were with them to the buyers as also they giving
symbolic possession of the tenanted portion and permitting the
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purchasers to pay money to the tenant for the tenant to vacate the
tenanted portion of the property. The plaintiffs would also have to
explain the conduct of their mother and the other two co-owners
executing a General Power of Attorney in favour of a director of the
six purchaser companies and authorizing him thereunder to sell the
property. The power of attorney has been executed just after six
months of the date when the agreement to sell was executed, and
relevant would it be to state that it is the case of the defendants that
when the power of attorney was executed on August 03, 1989
physical possession of the vacant portion and symbolic possession of
the tenanted portion was delivered. This is a matter of trial and
surely a matter of a good argument that from the fact that the
agreement to sell envisages ₹62,40,000/- to be further paid and
simultaneously possession handed over; from the fact that
possession was handed over would be proof that ₹62,40,000/- was
paid.The ominous silence for over 10 years has also to be explained,
and who says that silence has no sound, we remind ourselves of the
famous song : ‗The Sound of Silence’ by Simon & Garfunkel.
14. On the subject of possession, notwithstanding there being no sale
deed executed in favour of the buyers, Section 53A of the Transfer of
Property Act needs to be noted. Possession by a purchaser can be
successfully defended against even the title holder of a property
upon proof that the possession is under an agreement to sell and sale
consideration has been paid.
xxx xxx xxx‖
(Emphasis Supplied)
67. From the evidence and documents on record, the conclusion is
inescapable that the appellant has been unable to explain the conduct of her
mother and the other two sellers in handing over possession of the suit
property, and authorizing respondent no. 7 under the GPA to sell the suit
property, and the silence and inaction of the sellers in raising any dispute,
whatsoever.
68. Accordingly, this Court is of the considered opinion that the fact of
oral understanding as pleaded by the purchasers/respondent nos. 1 to 8,
stands proved by the evidence on record and the conduct of the parties. The
appellant has been unable to rebut the said plea of the purchasers.
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Pertinently, though, the purchasers set up the defence of oral understanding,
the same was not rebutted by the sellers by entering into the witness box and
deposing to the contrary, when two of the sellers, were defendants and party
to the suit.
69. It is a settled legal proposition that the Courts in a civil trial apply a
standard of proof governed by preponderance of probabilities. Proof of a
fact depends on the probability of its existence. The Court would balance the
conflicting probabilities concerning a fact situation. Upon weighing the
various probabilities, the Court would come to a conclusion as regards
preponderance in favour of existence of a particular fact. In this regard,
reference may be made to the judgment in the case of M. Siddiq (Ram
Janmabhumi Temple Case) Versus Mahant Suresh Das and Others8,
wherein, while delving on the aspect of preponderance of probabilities, it
was held as follows:
―xxx xxx xxx
The standard of proof
720. The court in a civil trial applies a standard of proof governed by
a preponderance of probabilities. This standard is also described
sometimes as a balance of probability or the preponderance of the
evidence. Phipson on Evidence formulates the standard succinctly :If
therefore, the evidence is such that the court can say ―we think it
more probable than not‖, the burden is discharged, but if the
probabilities are equal, it is not. [Phipson on Evidence.]
In Miller v. Minister of Pensions [Miller v. Minister of Pensions,
(1947) 2 All ER 372], Lord Denning, J. (as the Master of Rolls then
was) defined the doctrine of the balance or preponderance of
probabilities in the following terms : (All ER p. 373 H)―(1) … It need not reach certainty, but it must carry a high degree
of probability. Proof beyond reasonable doubt does not mean
proof beyond the shadow of doubt. The law would fail to protect8
(2020) 1 SCC 1.
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the community if it admitted fanciful possibilities to deflect the
course of justice. If the evidence is so strong against a man as to
leave only a remote possibility in his favour which can be
dismissed with the sentence, ―of course it is possible, but not in
the least probable‖ the case is proved beyond reasonable doubt,
but nothing short of that will suffice.‖
(emphasis supplied)
721. The law recognises that within the standard of preponderance
of probabilities, there could be different degrees of probability. This
was succinctly summarised by Denning, L.J.
in Bater v. Bater [Bater v. Bater, 1951 P 35 (CA)], where he
formulated the principle thus: (p. 37)
―… So also in civil cases, the case must be proved by a
preponderance of probability, but there may be degrees of
probability within that standard. The degree depends on the
subject-matter.‖
(emphasis supplied)
722. The definition of the expression ―proved‖ in Section 3 of the
Evidence Act is in the following terms:
―3. … ―Proved‖.–A fact is said to be proved when, after
considering the matters before it, the court either believes it to
exist, or considers its existence so probable that a prudent man
ought, under the circumstances of the particular case, to act upon
the supposition that it exists.‖
723. Proof of a fact depends upon the probability of its existence.
The finding of the court must be based on:
723.1. The test of a prudent person, who acts under the supposition
that a fact exists.
723.2. In the context and circumstances of a particular case.
724. Analysing this, Y.V. Chandrachud, J. (as the learned Chief
Justice then was) in N.G. Dastane v. S. Dastane [N.G. Dastane v. S.
Dastane, (1975) 2 SCC 326] held : (SCC pp. 335-36, para 24)
―The belief regarding the existence of a fact may thus be
founded on a balance of probabilities. A prudent man faced
with conflicting probabilities concerning a fact situation will
act on the supposition that the fact exists, if on weighing the
various probabilities he finds that the preponderance is in
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man, so the court applies this test for finding whether a fact in
issue can be said to be proved. The first step in this process is
to fix the probabilities, the second to weigh them, though the
two may often intermingle. The impossible is weeded out at the
first stage, the improbable at the second. Within the wide range
of probabilities the court has often a difficult choice to make but
it is this choice which ultimately determines where the
preponderance of probabilities lies. Important issues like those
which affect the status of parties demand a closer scrutiny than
those like the loan on a promissory note: ‗the nature and
gravity of an issue necessarily determines the manner of
attaining reasonable satisfaction of the truth of the issue [ Per
Dixon, J. in Wright v. Wright, (1948) 77 CLR 191 (Aust).] , CLR
at p. 210′; or as said by Lord Denning, ‗the degree of
probability depends on the subject-matter’. In proportion as the
offence is grave, so ought the proof to be clear [Blyth v. Blyth,
1966 AC 643 : (1966) 2 WLR 634 : (1966) 1 All ER 524 (HL)],
All ER at p. 536′. But whether the issue is one of cruelty or of
a loan on a pronote, the test to apply is whether on a
preponderance of probabilities the relevant fact is proved. In
civil cases this, normally, is the standard of proof to apply for
finding whether the burden of proof is discharged.‖
(emphasis supplied)
725. The Court recognised that within the standard of
preponderance of probabilities, the degree of probability is based on
the subject-matter involved.
xxx xxx xxx‖
(Emphasis Supplied)
70. As noted hereinabove, the case set up by the purchasers regarding oral
agreement has not been controverted by the original sellers, i.e., respondent
nos. 9 and 10 herein, and they never entered into the witness box before the
Trial Court to dispute the assertions regarding oral agreement by the
purchasers. In this regard, it would be fruitful to refer to the judgment in the
case of Chowdamma (D) by LR and Another Versus Venkatappa (D) by
LRs and Another9,wherein it has been held as follows:
9
2025 SCC OnLine SC 1814.
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―xxx xxx xxx
54. This principle is neither novel nor uncertain. This Court
in Vidhyadhar v. Manikrao [1999 3 SCC 573] held thus:
―17. Where a party to the suit does not appear in the witness-box
and states his own case on oath and does not offer himself to be
cross-examined by the other side, a presumption would arise that
the case set up by him is not correct ….‖
55. The present case is a compelling invocation of the above principle.
Defendant No. 1, though physically present in the Court during the
trial, abstained from stepping into the witness box to rebut the
plaintiffs’ assertions — assertions that strike at the very core of the
dispute. In the absence of cogent medical evidence to support her
alleged incapacity, her abstention from the witness box constitutes
deliberate circumvention of the evidentiary burden resting upon her.
56. In the present factual matrix, the adverse presumption under
Section 114(g) of the Evidence Act is inevitable.
57. This Court cannot overlook that defendant No. 1, while central to
the controversy, chose not only to abstain from entering the witness
box but also wilfully bypassed the statutory remedy available to those
pleading physical incapacity.
58. Order XXVI, Rule 1 of the Civil Procedure Code, 1908, permits
the recording of evidence through a commission in cases of age or
infirmity. Yet, no application was filed invoking the said provision,
nor was any explanation tendered for its non-invocation. In a
dispute where the foundational facts lie squarely within her
exclusive knowledge, such omission assumes critical significance.
Her refusal to depose, despite the existence of a procedural
safeguard specifically tailored to her alleged condition, cannot be
dismissed as inadvertent. Rather, it reflects a conscious evasion from
the evidentiary process, compounded by her unexplained failure to
avail an accessible legal alternative, is not a neutral act. It
constitutes wilful shielding from judicial scrutiny.
59. A Court of law cannot offer refuge to studied silence where a
duty to disclose exists. The plaintiffs anchored their claim in
measured and unwavering testimony of P.W.2 (Hanumanthappa), an
account rooted in personal knowledge and long-standing familiarity,
which withstood the rigours of cross-examination. His evidence,
unshaken and consistent, found further corroboration in the
genealogical chart presented by the plaintiffs. It, therefore, stands
established that the plaintiffs have discharged the evidentiary burden
imposed upon them by law. In contrast, the defendants, bereft of
probative material or candour, resorted solely to denials. When
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measured against the touchstone of preponderance of probabilities,
the scales unambiguously tilt in favour of the plaintiffs.
xxx xxx xxx‖
(Emphasis Supplied)
71. Reference may also be made to the case of Heinz India Private
Limited and Another Versus State of Uttar Pradesh and Others10, wherein,
the Supreme Court dealt with the standard of proof in civil action and
elucidated on the concept of standard of proof governed by preponderance
of probabilities. Thus, it was held as follows:
―xxx xxx xxx
43. In England, the civil standard of proof is defined by Lord
Denning in Miller v. Minister of Pensions [(1947) 2 All ER 372]
thus: (All ER p. 373 H)
―(1) … It need not reach certainty, but it must carry a high degree
of probability. Proof beyond reasonable doubt does not mean
proof beyond the shadow of doubt. The law would fail to protect
the community if it admitted fanciful possibilities to deflect the
course of justice. If the evidence is so strong against a man as to
leave only a remote possibility in his favour which can be
dismissed with the sentence ‗of course it is possible, but not in the
least probable,’ the case is proved beyond reasonable doubt, but
nothing short of that will suffice.‖
44. Three years later came Bater v. Bater [1951 P 35 at p. 37 :
(1950) 2 All ER 458 (CA)] in which the civil standard of proof was to
an extent modified, was seen by some jurists as somewhat confusing
the concept so clearly stated in Miller case [(1947) 2 All ER 372].
In Bater [1951 P 35 at p. 37 : (1950) 2 All ER 458 (CA)] the Court
declared that neither civil nor criminal standard of proof was an
absolute standard. A ―civil case‖ may be proved by a preponderance
of probability, explained Denning, J.: (Bater case [1951 P 35 at p. 37:
(1950) 2 All ER 458 (CA)], All ER p. 459)
―… but there may be degrees of probability within that standard.
The degree depends on the subject-matter. A civil court, when
considering a charge of fraud, will naturally require a higher
degree of probability than that which it would require if
10
(2012) 5 SCC 443.
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considering whether negligence were established. It does not
adopt so high a degree as a criminal court, even when it is
considering a charge of a criminal nature, but still it does require
a degree of probability which is commensurate with the
occasion.‖
45. Then came Hornal v. Neuberger Products Ltd. [(1957) 1 QB 247 :
(1956) 3 WLR 1034 : (1956) 3 All ER 970 (CA)] where the Court held
that: (QB p. 247)
―In a civil action where fraud or other matter which is or may be
a crime is alleged against a party or against persons not parties to
the action, the standard of proof to be applied is that applicable in
civil actions generally, namely, proof on the balance of
probability, and not the higher standard of proof beyond all
reasonable doubt required in criminal matters; but there is no
absolute standard of proof, and no great gulf between proof in
criminal and civil matters; for in all cases the degree of
probability must be commensurate with the occasion and
proportionate to the subject-matter. The elements of gravity of an
issue are part of the range of circumstances which have to be
weighed when deciding as to the balance of probabilities.‖
xxx xxx xxx‖
(Emphasis Supplied)
72. It is also pertinent to refer to the definition of ‘proved’ as given in
Section 3 of the Evidence Act, which deals with the interpretation clause.
Thus, ‘proved’, has been defined in the following manner:
――Proved‖.–A fact is said to be proved when, after considering
the matters before it, the Court either believes it to exist, or
considers its existence so probable that a prudent man ought,
under the circumstances of the particular case, to act upon the
supposition that it exists.‖
(Emphasis Supplied)
73. Thus, considering the oral and documentary evidence on record and
by applying the standard of preponderance of probabilities, this Court is of
the opinion that the purchasers have ‘proved’ that there existed an oral
understanding between the sellers and the purchasers.
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74. The contention of the appellant that the alleged payments by the
purchasers/respondent nos. 1 to 8, to the tenants is hit by Sections 91 and 92
of Evidence Act, since the GPA as well as the receipt, although being
subsequent documents to the alleged oral understanding, do not record
anything about the oral understanding or about the payment to tenants to
secure relinquishment of tenancy, is misplaced.
75. Section 92 of the Evidence Act provides that where the terms of the
contract have been proved according to Section 91, no evidence of any oral
agreement or statement shall be admitted for the purposes of contradicting,
varying, adding to, or subtracting from its terms. The question that arises in
the present appeal is whether the respondent nos. 1 to 8 were barred from
proving the existence of an oral understanding between the sellers and
purchasers under Section 92 of the Evidence Act.
76. In this regard, it would be apposite to refer to the provision of Section
92 of the Evidence Act and Provisos 2 and 6 to Section 92, which are
relevant for the present case. The same are reproduced as under:
―92. Exclusion of evidence of oral agreement.–When the terms of
any such contract, grant or other disposition of property, or any
matter required by law to be reduced to the form of a document,
have been proved according to the last section, no evidence of any
oral agreement or statement shall be admitted, as between the parties
to any such instrument or their representatives in interest, for the
purpose of contradicting, varying, adding to, or subtracting from, its
terms:
xxx xxx xxx
Proviso (2) –The existence of any separate oral agreement as to any
matter on which a document is silent, and which is not inconsistent
with its terms, may be proved. In considering whether or not this
proviso applies, the Court shall have regard to the degree of
formality of the document.
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xxx xxx xxx
Proviso (6).–Any fact may be proved which shows in what manner
the language of a document is related to existing facts.
xxx xxx xxx
(Emphasis Supplied)
77. Section 92 of Evidence Act provides that where the terms of a (i)
contract, (ii) grant, (iii) or, other disposition of property, or (iv) a matter
required to be reduced in the form of a document, are proved in accordance
with Section 91 of Evidence Act, then evidence of any oral agreement to
contradict, vary, add or subtract from the said terms, is barred.
78. Further, Proviso 2 of Section 92 carves an exception from the main
principle under Section 92 of the Evidence Act. Proviso 2 provides that
existence of any separate oral agreement can be proved, provided the
document is silent on that matter, and there is no inconsistency with the
terms of the document. In this regard, reference is made to the judgment in
the case of K. Manoharan Versus T. Janaki Ammal11, wherein, it has been
held as follows:
―xxx xxx xxx
27. When the terms of transaction which reduced into writing, it is
not possible to lead evidence to contradict its terms in view of Section
91 of Indian Evidence Act. As per Section 92 of Indian Evidence Act,
extrinsic parol evidence contradicting, varying adding to or
subtracting from the terms of a solemn written instrument is
inadmissible. This is because the parties have reduced into writing
their agreement, it must be presumed that they have put into writing
all that they considered necessary to give full expression to their
meaning yard intention. As between parties to an instrument oral of
intention is not admissible for the purpose either of construing deeds
or of proving the intention of the parties.
11
2012 SCC OnLine Mad 1261.
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28. Even though no extrinsic evidence is admissible in substitution
for the written document, there are exceptions to the Rule in Section
92 of Indian, Evidence Act. Proviso (2) to Section 92 of Indian
Evidence Act reads as under:
―Proviso (2).– The existence of any separate oral agreement
as to any matter on which a document is silent, and which is
not inconsistent with its terms, may be proved. In considering
whether or not this Proviso applies, the Court shall have
regard to the degree of formality of the document.‖Thus as per Proviso (2) to Section 92 of Indian Evidence Act, if there
is contemporaneous nor prior separate oral agreement as to any
matter which is not inconsistent with its terms may be proved. The
separate-agreement should be on a distinct collateral matter
although it may form part of the same transactions, the test being
that it should not vary or contradict the terms of the written contract.
29. In the light of the above principles, we need to analyse the
evidence of DWs.1 & 2 and consider whether they would fall within
the Proviso (2) to Section 92 of Indian Evidence Act. As pointed out
earlier, DWs.1 & 2 have stated that at the time of entering into an
Agreement of Sale (Ex.A1), parties have agreed that Plaintiff has to
allot six plots and on that understanding; the price was reduced to Rs.
13,500/- per cent. On such agreement between the parties, it was
agreed at the time of entering into Ex.A1-Agreement of Sale. Evidence
adduced as to the oral agreement between the parties for allotting six
plots to the Defendants 1 to 3 is no way contradicting, varying the
terms of Ex.A1-Agreement of Sale. Therefore, the evidence adduced to
establish the oral agreement between the parties to allot six plots to
the Defendants 1 to 3 by the Plaintiff is admissible in evidence and not
hit under Sections 91 & 92 of Indian Evidence Act.
xxx xxx xxx‖
(Emphasis Supplied)
79. Thus, the ingredients for the applicability of Proviso 2 of Section 92
of Evidence Act, can be summed up as follows:
i. The separate oral agreement envisaged under Proviso 2 refers to a
contemporaneous separate oral agreement.
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ii. The separate oral agreement should relate to any matter on which the
document is silent.
iii. The separate oral agreement should be on a distinct collateral matter,
although it may form part of the same transaction.
iv. Oral agreement should not contradict or vary the terms of the written
agreement.
v. The Court would have due regard to the degree of formality of the
document in writing.
80. Thus, where the document in writing is of a lower degree of formality,
i.e., it does not contain the entire agreement between the parties, but
embodies only some of the conditions, then oral evidence to prove
contemporaneous oral agreement is clearly admissible in evidence, provided
it is not inconsistent with the written document.
81. If the document is a formal one, the presumption is that it incorporates
the entire agreement between the parties, and therefore, oral evidence is
excluded. If the document is informal, it need not contain all the terms
agreed to between the parties, because by its very nature it is not supposed to
be a document complete in all respects. Oral evidence can be led in such
cases. Thus, spelling out the principles for proving oral agreement with
regard to a written document, the Division Bench of the Patna High Court in
the case of Rajendra Prasad Versus Gaya Prasad Sah12, has held as
follows:
―xxx xxx xxx
17. It is therefore obvious that where the document is silent the
existence of any separate oral agreement in respect thereof, if not
inconsistent with its term, may be given. It must be noted that in12
1975 SCC OnLine Pat 90.
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considering the question of application of this proviso, the court has
to keep regard to the degree of formality of the document itself. It is
well settled that where the document is formal and if the matter in
respect of which the evidence is sought to be adduced was a matter
which necessarily would have been mentioned in the document,
evidence in that regard shall not be allowed. If however the
document is not formal and it need not have contained all the
matters relating thereto and when the document is silent, in such
cases it is open to the party to lead evidence in respect of the matter
on which it is silent.
xxx xxx xxx
19. The principle underlying the law is that when a transaction has
been reduced to writing that must be regarded as the appropriate
and the only evidence of the terms of agreement. The question
therefore as to what is the nature of the document becomes a very
important one because upon its nature will depend the answer to the
question as to whether the document can be treated to be one which
is supposed to incorporate all the terms of agreement. If the
document is a formal one, obviously the presumption is that it
incorporates the entire agreement between, the parties. That is the
reason why oral evidence is excluded. If the document is of an
informal nature it need not contain within itself all the terms agreed
to between the parties because by its very nature it is not supposed to
be a document complete in all respect. It is therefore well settled that
where the document is a formal one no oral evidence relating to any
contemporaneous agreement inconsistent with the terms of the
document would be permitted. The same cannot however be said in
respect of an informal document. In the present case the chitha being
an informal document the law laid down in the cases aforesaid has no
application.
xxx xxx xxx‖
(Emphasis Supplied)
82. The aforesaid position of law is also supported by illustrations (f), (g)
and (h) to Section 92 of the Evidence Act, which read as under:
―xxx xxx xxx
(f) A orders goods of B by a letter in which nothing is said as to the
time of payment, and accepts the goods on delivery. B sues A for the
price. A may show that the goods were supplied on credit for a term
still unexpired.
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(g) A sells B a horse and verbally warrants him sound. A gives B a
paper in these words: ―Bought of A a horse of Rs. 500‖. B may
prove the verbal warranty.
(h) A hires lodgings of B, and gives B a card on which is written —
―Rooms, Rs. 200 a month.‖ A may prove a verbal agreement that
these terms were to include partial board.
A hires lodgings of B for a year, and a regularly stamped
agreement, drawn up by an attorney, is made between them. It is
silent on the subject of board. A may not prove that board was
included in the terms verbally.
xxx xxx xxx‖
(Emphasis Supplied)
83. The two scenarios in illustration (h) show that the Courts would have
due regard to the formality of the document while deciding whether to allow
oral evidence with respect to existence of any separate oral agreement.
84. In the light of the above principles, when analyzing the evidence on
record, the oral understanding as pleaded by the purchasers, is not barred by
Section 92 of the Evidence Act. In the present case, the formal Agreement to
Sell dated 24th January, 1989 was subsequently modified by way of the
covenant as contained in the receipt dated 03rd August, 1989, which records
that the sellers have handed over the vacant physical possession of the self-
occupied portion and symbolic possession of the tenanted portion of the suit
property. It also states that the purchasers shall be entitled to claim the rent.
85. Additionally, the receipt dated 03rd August, 1989 further states that the
balance sale consideration shall be paid at the time of registration of the sale
deed. The receipt is a writing of an ‘informal nature’, as it does not include
all the terms between the parties. The receipt only mentions the time/event
when the balance sale consideration was payable. However, the receipt is
silent on the manner and mode in which the balance sale consideration has to
be paid. The purchasers, i.e., respondent nos. 1 to 8 herein, seek to prove the
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oral understanding that payments made to tenants stand adjusted against the
balance sale consideration. Thus, the oral understanding pleaded is on a
matter of distinct collateral nature, forming part of the same transaction. It is
not contradictory to any terms of the receipt dated 03rd August, 1989.
Therefore, the purchasers could lead oral evidence to prove the terms of oral
agreement between the parties.
86. Further, Proviso 6 to Section 92 of the Evidence Act provides also an
exception to the general rule under Section 92, and states that any fact may
be proved which shows in what manner the language of a document is
related to existing facts.
87. Further, Section 95 of the Evidence Act provides that where the
language used in the document is plain in itself, but is unmeaning in
reference to its existing facts, evidence may be given to show that it was
used in a peculiar sense. Section 95 of the Evidence Act, reads as under:
―xxx xxx xxx
95. Evidence as to document in unmeaning reference to existing
facts.–When language used in a document is plain in itself, but is
unmeaning in reference to existing facts, evidence may be given to
show that it was used in a peculiar sense.
xxx xxx xxx‖
(Emphasis Supplied)
88. In this regard, it would be apposite to place reliance on the judgment
passed in Anglo American Metallurgical Coal Pty. Limited Versus MMTC
Ltd.13, wherein the Supreme Court noted that a latent ambiguity arises when
the words of the instrument are clear, but their application to the
circumstances is doubtful, and such an ambiguity, being raised solely by
13
(2021) 3 SCC 308.
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extrinsic evidence, is allowed to be removed by the same means. The
Supreme Court further held that under Section 95 of the Evidence Act,
which deals with latent ambiguity, read with Proviso (6) and Illustration (f)
to Section 92 of the Evidence Act, evidence may be led to show the peculiar
sense in which the language was used, when the plain language of the
document is otherwise unmeaning in reference. The relevant paragraphs of
the said decision are reproduced as under:
―xxx xxx xxx
30. Importantly, Section 92 of the Evidence Act refers to the terms of a
―contract, grant or other disposition of property or any matter
required by law to be reduced to the form of a document‖. In all these
cases, under Proviso (6) read with Illustration (f), any fact may be
proven which shows in what manner the language of a document is
related to existing facts. Illustration (f) of Section 92 of the Evidence
Act indicates that facts, which may on the face of it, be ambiguous
and vague, can be made certain in the contextual setting of the
contract, grant or other disposition of property. Section 94 of the
Evidence Act, then speaks of language being used in a document
being ―plain in itself‖. It is only when such document ―applies
accurately to existing facts‖, that evidence may not be given to show
that it was not meant to apply to such facts. Likewise, the obverse
situation is contained in Section 95 of the Evidence Act, which then
states that when the language used in a document is plain in itself,
but is ―unmeaning in reference to existing facts‖, only then may
evidence be given to show that it was used in a peculiar sense.
31. When Sections 92, 94 and 95 of the Evidence Act are applied to a
string of correspondence between parties, it is important to
remember that each document must be taken to be part of a coherent
whole, which happens only when the ―plain‖ language of the
document is first applied accurately to existing facts.
32. In Woodroffe and Ali’s Law of Evidence [Woodroffe, J. and Ali, A.,
Law of Evidence, [19th Edn. (Vol. 3), Butterworths, Wadhwa, Nagpur,
2013].], the learned authors opine that whereas Sections 93 and 94 of
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of the Evidence Act deal with cases of latent ambiguity (see pp. 3119-
20). A ―patent ambiguity‖ is explained in the following terms in
Starkie on Evidence [Starkie, T., A Treatise on the Law of Evidence,
(7th Edn., William Benning, London, 1829)]:
―By patent ambiguity must be understood an ambiguity inherent
in the words, and incapable of being dispelled, either by any
legal rules of construction applied to the instrument itself, or by
evidence showing that terms in themselves unmeaning or
unintelligible are capable of receiving a known conventional
meaning, the great principle on which the rule is founded is that
the intention of parties, should be construed, not by vague
evidence of their intentions independently of the expressions
which they have thought fit to use, but by the expression
themselves. Now, those expressions which are incapable of any
legal construction and interpretation by the rules of art are
either so because they are in themselves unintelligible, or
because, being intelligible, they exhibit a plain and obvious
uncertainty. In the first instance, the case admits of two
varieties; the terms though at first sight unintelligible, may yet
be capable of having a meaning annexed to them by extrinsic
evidence, just as if they were written in a foreign language, as
when mercantile terms are used which amongst mercantile men
bear a distinct and definite meaning, although others do not
comprehend them; the terms used may, on the other hand, be
capable of no distinct and definite interpretation. Now, it is
evident that to give effect to an instrument, the terms of which,
though apparently ambiguous are capable of having a distinct
and definite meaning annexed to them is no violation of the
general principle, for, in such a case, effect is given, not to any
loose conjecture as to the intent and meaning of the party, but to
the expressed meaning and that, on the other hand, where either
the terms used are incapable of any certain and definite
meaning, or, being in themselves intelligible, exhibit plain and
obvious uncertainty, and are equally capable of different
applications, to give an effect to them by extrinsic evidence as to
the intention of the party would be to make the supposed
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understood an inherent ambiguity, which cannot be removed,
either by the ordinary rules of legal construction or by the
application of extrinsic and explanatory evidence, showing that
expressions, prima facie, unintelligible, are yet capable of
conveying a certain and definite meaning.‖
(emphasis supplied)
33. On the other hand, a ―latent ambiguity‖ is described in
Woodroffe and Ali’s Law of Evidence, as follows:
―Latent ambiguity, in the more ordinary application, arises
from the existence of facts external to the instrument, and the
creation by these facts of a question not solved by the
document itself. A latent ambiguity arises when the words of
the instrument are clear, but their application to the
circumstances is doubtful; here the ambiguity, being raised
solely by extrinsic evidence, is allowed to be removed by the
same means. In strictness of definition, such cases, as those in
which peculiar usage may afford a construction to a term
different from its natural one as can be seen in Section 98, would
be instances of latent ambiguity, since the double use of the term
would leave it open to the doubt in which of its two senses it was
to be taken. It is not, however, to this class of cases that
reference is now made, but to those in which the ambiguity is
rather that of description, either equivocal itself from the
existence of two subject-matter, or two persons, both falling
within its terms as can be seen in Section 96, or imperfect when
brought to bear on any given person or thing as per Sections 95
and 97.‖
xxx xxx xxx
36. However, Section 95 of the Evidence Act, dealing with latent
ambiguity, when read with Proviso (6) and Illustration (f) to Section
92 of the Evidence Act, could apply to the facts of the present case,
as when the plain language of a document is otherwise unmeaning
in reference to how particular words are used in a particular sense,
given the entirety of the correspondence, evidence may be led to
show the peculiar sense of such language. Thus, if this provision is
applied, the majority award cannot be faulted as it has accepted the
evidence given by Mr Wilcox, wherein he explained that the three
emails would only be meaningful if they were taken to refer toSignature Not Verified
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―mixed‖ supplies of coal, and not supplies of coal at the contractual
price.
xxx xxx xxx
38. The approach of the Singapore Court of Appeal has our broad
approval, being in line with the modern contextual approach to the
interpretation of contracts. When Proviso (6) and Illustration (f) to
Section 92, Section 94 and Section 95 of the Evidence Act are read
together, the picture that emerges is that when there are a number of
documents exchanged between the parties in the performance of a
contract, all of them must be read as a connected whole, relating
each particular document to ―existing facts‖, which include how
particular words are used in a particular sense, given the entirety of
correspondence between the parties. Thus, after the application of
Proviso (6) to Section 92 of the Evidence Act, the adjudicating
authority must be very careful when it applies provisions dealing
with patent ambiguity, as it must first ascertain whether the plain
language of a particular document applies accurately to existing
facts. If, however, it is ambiguous or unmeaning in reference to
existing facts, evidence may then be given to show that the words
used in a particular document were used in a sense that would make
the aforesaid words meaningful in the context of the entirety of the
correspondence between the parties.
xxx xxx xxx‖
(Emphasis Supplied)
89. Likewise, in the case of West Bengal State Electricity Distribution
Co. Ltd. Versus Adhunik Power & Natural Resource Ltd. and Others14, the
Supreme Court held that the rule that the terms of a contract must be
determined from the document itself does not bar the Court from looking
into attending circumstances and impart meaning to a term, which may
otherwise be meaningless or unworkable, in the following manner:
14
2026 SCC OnLine SC 328.
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―xxx xxx xxx
22. Mr. Sibal’s argument that a written contract between parties
cannot be qualified with reference to any prior or subsequent
statements/conduct is unfounded. The law in this regard is crystal
clear. Ordinarily, when a contract is reduced to writing, its terms
must be determined from the document itself. However, this rule
does not put an embargo on looking into such facts which (i)
establish a link between terms of the contract and existing facts i.e.
attending circumstances, or (ii) impart meaning to a term which
may otherwise be meaningless or unworkable. These principles have
been eloquently summarized in Anglo American Metallurgical Coal
Pty. Limited v. MMTC Limited wherein this Court observed:…
23. In the present context, we note that Article 2.5 of the PPA/PSA
refers to a ‗captive source’ for coal supply for generation & supply of
power and indemnifies WBSEDCL against any additional cost arising
from procurement of coal from alternate sources. Though the captive
source is not expressly identified in Article 2.5, its identity is clearly
discernible from the surrounding circumstances, in particular, the
Minutes of Meeting dated 03.01.2011 recording the salient features
underlying the PPA/PSA, which specifically note that APNRL had a
captive coal block at Ganeshpur. Further, the letter dated 30.04.2012
issued by WBSEDCL enquiring about the status of work relating to
lifting of coal from Ganeshpur captive coal block and its
transportation to the coal handling plant, reinforces this position.
WBSEDCL was a party to these correspondences and has never
disputed their contents. In these circumstances, it does not lie in the
mouth of WBSEDCL to contend that the PPA/PSA did not prescribe
Ganeshpur Coal Block as the captive coal source for generation and
supply of electricity.
xxx xxx xxx‖
(Emphasis Supplied)
90. Adverting to the present facts, the receipts dated 01st August, 1989 and
03rd August, 1989 record that the balance sale consideration is payable at the
time of registration of the sale deed. However, any specific amount as due
balance sale consideration is not expressly identified or recorded in the said
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receipts. The sellers transferred the possession of the suit property to the
purchasers, and raised no dispute as to the sale consideration, and only after
a passage of approximately 11 years, the successor-in-interest of one of the
sellers has raised a dispute as to the sale consideration not having been
satisfied.
91. In view of these attending circumstances, the plain meaning of the
words used in the said receipt have become doubtful, ambiguous or
unmeaning in reference to existing facts. Thus, the purchasers/respondent
nos. 1 to 8, can lead oral evidence to contend that the balance sale
consideration as mentioned in the said receipt, referred to the amount due
after the payments made to the tenants were adjusted.
92. The appellant has also argued that the alleged payments made by the
purchasers/respondent nos. 1 to 8 to the tenants in the suit property, could
not have been adjusted against the balance sale consideration, since the said
payments were unlawful under Section 5(3) of the DRC Act, and were not
valid consideration under Sections 23 and 24 of the Contract Act.
93. However, it is to be noted that these objections with respect to the
legal validity of payments made to the tenants were never taken by the
appellant in the pleadings before the Trial Court, and no such issue was
framed with regard thereto.
94. In this regard, decision of the Supreme Court in the case of Bachhaj
Nahar Versus Nilima Mandal and Another15, may be referred to, wherein,
the Supreme Court has held that:
15
(2008) 17 SCC 491.
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―xxx xxx xxx
10. The High Court, in this case, in its obvious zeal to cut delay and
hardship that may ensue by relegating the plaintiffs to one more round
of litigation, has rendered a judgment which violates several
fundamental rules of civil procedure. The rules breached are:
(i) No amount of evidence can be looked into, upon a plea
which was never put forward in the pleadings. A question
which did arise from the pleadings and which was not the
subject-matter of an issue, cannot be decided by the court.
(ii) A court cannot make out a case not pleaded. The court
should confine its decision to the question raised in pleadings.
Nor can it grant a relief which is not claimed and which does
not flow from the facts and the cause of action alleged in the
plaint.
(iii) A factual issue cannot be raised or considered for the first
time in a second appeal.
11. The Civil Procedure Code is an elaborate codification of the
principles of natural justice to be applied to civil litigation. The
provisions are so elaborate that many a time, fulfilment of the
procedural requirements of the Code may itself contribute to delay.
But any anxiety to cut the delay or further litigation should not be a
ground to flout the settled fundamental rules of civil procedure. Be
that as it may. We will briefly set out the reasons for the aforesaid
conclusions.
12.The object and purpose of pleadings and issues is to ensure that
the litigants come to trial with all issues clearly defined and to
prevent cases being expanded or grounds being shifted during trial.
Its object is also to ensure that each side is fully alive to the
questions that are likely to be raised or considered so that they may
have an opportunity of placing the relevant evidence appropriate to
the issues before the court for its consideration. This Court has
repeatedly held that the pleadings are meant to give to each side
intimation of the case of the other so that it may be met, to enable
courts to determine what is really at issue between the parties, and to
prevent any deviation from the course which litigation on particular
causes must take.
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13. The object of issues is to identify from the pleadings the
questions or points required to be decided by the courts so as to
enable parties to let in evidence thereon. When the facts necessary to
make out a particular claim, or to seek a particular relief, are not
found in the plaint, the court cannot focus the attention of the
parties, or its own attention on that claim or relief, by framing an
appropriate issue. As a result the defendant does not get an
opportunity to place the facts and contentions necessary to repudiate
or challenge such a claim or relief. Therefore, the court cannot, on
finding that the plaintiff has not made out the case put forth by him,
grant some other relief. The question before a court is not whether
there is some material on the basis of which some relief can be
granted. The question is whether any relief can be granted, when the
defendant had no opportunity to show that the relief proposed by the
court could not be granted. When there is no prayer for a particular
relief and no pleadings to support such a relief, and when the
defendant has no opportunity to resist or oppose such a relief, if the
court considers and grants such a relief, it will lead to miscarriage of
justice.Thus it is said that no amount of evidence, on a plea that is not
put forward in the pleadings, can be looked into to grant any relief.
xxx xxx xxx
17.It is thus clear that a case not specifically pleaded can be
considered by the court only where the pleadings in substance,
though not in specific terms, contain the necessary averments to
make out a particular case and the issues framed also generally
cover the question involved and the parties proceed on the basis that
such case was at issue and had led evidence thereon. As the very
requirements indicate, this should be only in exceptional cases
where the court is fully satisfied that the pleadings and issues
generally cover the case subsequently put forward and that the
parties being conscious of the issue, had led evidence on such issue.
But where the court is not satisfied that such case was at issue, the
question of resorting to the exception to the general rule does not
arise. The principles laid down in Bhagwati Prasad [AIR 1966 SC
735] and Ram Sarup Gupta [(1987) 2 SCC 555 : AIR 1987 SC 1242]
referred to above and several other decisions of this Court following
the same cannot be construed as diluting the well-settled principle
that without pleadings and issues, evidence cannot be considered to
make out a new case which is not pleaded. Another aspect to be
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noticed, is that the court can consider such a case not specifically
pleaded, only when one of the parties raises the same at the stage of
arguments by contending that the pleadings and issues are sufficient
to make out a particular case and that the parties proceeded on that
basis and had led evidence on that case. Where neither party puts
forth such a contention, the court cannot obviously make out such a
case not pleaded, suo motu.
xxx xxx xxx
23.It is fundamental that in a civil suit, relief to be granted can be only
with reference to the prayers made in the pleadings. That apart, in
civil suits, grant of relief is circumscribed by various factors like court
fee, limitation, parties to the suits, as also grounds barring relief, like
res judicata, estoppel, acquiescence, non-joinder of causes of action
or parties, etc., which require pleading and proof. Therefore, it would
be hazardous to hold that in a civil suit whatever be the relief that is
prayed, the court can on examination of facts grant any relief as it
thinks fit. In a suit for recovery of rupees one lakh, the court cannot
grant a decree for rupees ten lakhs. In a suit for recovery possession
of property ‗A’, court cannot grant possession of property ‗B’. In a
suit praying for permanent injunction, court cannot grant a relief of
declaration or possession. The jurisdiction to grant relief in a civil
suit necessarily depends on the pleadings, prayer, court fee paid,
evidence let in, etc.
24. In the absence of a claim by the plaintiffs based on an easementary
right, the first defendant did not have an opportunity to demonstrate
that the plaintiffs had no easementary right. In the absence of
pleadings and an opportunity to the first defendant to deny such
claim, the High Court could not have converted a suit for title into a
suit for enforcement of an easementary right. The first appellate
court had recorded a finding of fact that the plaintiffs had not made
out title. The High Court in second appeal did not disturb the said
finding. As no question of law arose for consideration, the High Court
ought to have dismissed the second appeal. Even if the High Court felt
that a case for easement was made out, at best liberty could have been
reserved to the plaintiffs to file a separate suit for easement. But the
High Court could not, in a second appeal, while rejecting the plea of
the plaintiffs that they were owners of the suit property, grant the
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relief of injunction in regard to an easementary right by assuming that
they had an easementary right to use the schedule property as a
passage.
xxx xxx xxx‖
(Emphasis Supplied)
95. The appellant has neither asserted nor established the applicability of
the DRC Act to the tenancy in question, by proving the monthly rent amount
of the suit property. Since the appellant did not do so, the contesting
respondents had no occasion to deal with the same in their pleadings and
evidence. Therefore, in the absence of any evidence in regard to applicability
of the DRC Act, this Court would not presume that the suit premises were
covered under the DRC Act.
96. In this regard, it would be apposite to refer to the case of M/s Sentinel
Consultants Pvt. Ltd. Versus Shri Sudhir Malhotra16, wherein, it was held
that if the premises were not covered under the DRC Act, payment of
compensation to a tenant for surrendering the tenancy rights, cannot be
considered as unlawful, in the following manner:
―xxx xxx xxx
17. One of the objections taken in the Written Statement is that since
the agreement to sell provided for payment of Rs. 10 lac to the plaintiff
for surrender of the tenancy rights in the ground floor portion and
adjustment of that amount towards payment of sale consideration of
the basement floor, the consideration being unlawful in terms of
Section 23 of the Indian Contract Act, the agreement is void and
unenforceable in law. Section 23 of the Indian Contract Act, 1872, to
the extent it is relevant, provides that the consideration or object of an
agreement is lawful, unless it is forbidden by law or is of such a
nature, if permitted, it would defeat the provisions of any law. Section
24 of the Indian Contract Act, to the extent it is relevant, provides that
if any part of a single consideration for one or more objects, or any
one or any part of any one of several considerations for a single object
is unlawful, the agreement is void. When questioned in this regard, the16
2011 SCC OnLine Del 4485.
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learned Counsel for the plaintiff stated that the rent of the ground floor
premises which defendant No. 1 had let out to the plaintiff and which it
had vacated pursuant to the agreement to sell dated 27th March, 1997
was Rs. 6,000/- p.m. Section 5(3) of Delhi Rent Control Act provides
that it shall not be lawful for the tenant to receive any payment in
consideration of the relinquishment of tenancy of any premises.
Therefore, if the provisions of Delhi Rent Control Act apply to the
Ground Floor which was let out to the plaintiff and was vacated by it
pursuant to the agreement to sell dated 27th March, 1997, the part of
the consideration may be held unlawful and consequently the
agreement may be void. Section 3 (c) of Delhi Rent Control Act, to
the extent it is relevant provides, that nothing in the Act shall apply
to any premises whether residential or not, whose monthly rent
exceeds Rs. 3500/-. Hence, the provisions of Delhi Rent Control Act
including Section 5 thereof do not apply to the ground floor premises
which defendant No. 1 had let out to the plaintiff and which was
surrendered by the plaintiff company pursuant to the agreement to
sell dated 27th March, 1997. No other provision of law, prohibiting
payment of compensation to a tenant for surrendering the tenancy
rights has been brought to my notice. I, therefore hold that the
consideration or object of the agreement to sell dated 27th March,
1997 cannot be said to be unlawful.
xxx xxx xxx‖
(Emphasis Supplied)
97. Thus, the appellant has failed to establish that full payment has not
been received by the sellers, in terms of the Agreement to Sell between the
sellers and the purchasers.
c. Validity of the GPA dated 03rd August, 1989
98. The appellant has contended that the GPA dated 03rd August, 1989
was revocable under Section 201 of the Contract Act as it did not create any
interest in favor of the respondent no. 7 in the subject matter, and therefore,
the GPA stood terminated upon the demise of Smt. Nirmal Krishan. On the
other hand, it is the case of respondent nos. 1 to 8 that the said GPA was
irrevocable in nature, and did not lapse upon the death of the executant.
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99. At the outset, it is to be noted that no challenge was raised by the
appellant herein to the validity of the said GPA before the Trial Court.
Further, it is not the case of the appellant that the said GPA was obtained by
fraud or undue influence. In contrast, the GPA has duly been admitted into
evidence during the trial.
100. The law with regard to the nature of a GPA being revocable or
irrevocable has been recently discussed by the Supreme Court in the case of
M.S. Ananthamurthy and Another Versus J. Manjula and Others17, in the
following manner:
―xxx xxx xxx
(i)Relationship between the executant and holder of general power
of attorney
27. A power of attorney derives its basic principles from Chapter X of
the Contract Act which provides for ―Agency‖ along with Sections 1-A
and 2, respectively, of the Powers of Attorney Act, 1882. Agency is a
fiduciary relationship between two persons, where one explicitly or
implicitly agrees that the other will act on their behalf to influence
their legal relations with third parties, and the other similarly agrees
to act in this capacity or does so based on an agreement. The
relationship between the executant of a general power of attorney
and the holder of the power is one of principal and agent. A
principal is bound by the acts done by an agent or the contracts
made by him on behalf of the principal. Likewise, power of attorney
in the nature of contract of agency authorises the holder to do acts
specified by the executant, or represent the executant in dealings
with third persons.
xxx xxx xxx
33. Section 201 of the Contract Act prescribes various ways of
revocation of authority given by the principal to his agent. A principal
can terminate the contract of agency unless such revocation is
precluded by Section 202 of the Contract Act. Section 202 of the
Contract Act, as an exception to the general rule under Section 201,
prescribes that where an agent has himself an interest in the
property which forms the subject-matter of the agency, the agency
17
(2025) 10 SCC 596.
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cannot be terminated to the prejudice of such interest unless there is
an express stipulation to the contrary.
34. Illustration (a) to Section 202 of the Contract Act states that A
(principal) has given authority to B (agent) to sell A’s land, and to pay
himself i.e. the agent, from the proceeds the debt which is due to him
from A. Illustration (b) states that A (principal) has consigned 1000
bales of cotton to B (agent), who has given an advance on the bales of
cotton. Now, A wishes B to sell the cotton and recover his advance
from the sale proceeds. In both the cases, A can neither revoke the
authority nor agency will be terminated by his insanity or death. It is
important to take a note that in both the cases, the agent has an
interest vested in the subject-matter of the agency. The factum of
interest or security of the agent, in both cases, does not imply that
the agent’s right to remuneration constitutes an interest in the
subject-matter of the agency; rather, it extends beyond the mere
advancement of remuneration or commission. Where PoA is coupled
with an interest, it metamorphosises to an irrevocable agency unless
expressly stated otherwise. There an agent’s right to remuneration is
not an interest in the subject-matter of the agency.
35. Therefore, the essentials of Section 202 of the Contract Act are,
first, there shall be a relationship in the capacity of ―principal and
agent‖ between the parties and secondly, there shall be agent’s
interest in the subject-matter of the agency. If both the conditions
are fulfilled the agency becomes irrevocable and cannot be
terminated unilaterally at the behest of the principal. As the first
condition is satisfied in the present case, we shall now proceed to
examine whether from the reading of the GPA, the holder of PoA had
an interest in the subject-matter of the agency, namely, the suit
property.
xxx xxx xxx
38. In Palani Vannan v. Krishnaswami Konar [Palani Vannan v.
Krishnaswami Konar, 1945 SCC OnLine Mad 119], the decree-holder
had executed a PoAauthorising the holder to execute the decree. Later,
the executant revoked the PoA through a notice. The question before
the Court was whether the notice revoking the authority was valid in
law or not. The Court held that the PoA was not coupled with interest
as the object of the PoA was not securing any interest of the agent. It
held that the primary object of the PoA was to recover the fruits of the
decree on behalf of the principal despite the fact that the agent’s
remuneration was fixed to be drawn from the proceeds of the decree.
The relevant observations are reproduced hereinbelow: (SCC OnLine
Mad)
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―It is only necessary to refer to one further decision, Reginald
Charles Frith v. Josiah Alexander Frith [Reginald Charles Frith
v. Josiah Alexander Frith, 1906 AC 254 (PC)], in which the
Judicial Committee discuss the general position relating to these
matters. Their Lordships point out that in what is known as
Carmichael case [Hannan’s Empress Gold Mining &
Development Co., In re, (1896) 2 Ch 643 (CA)]: (Josiah
Alexander Frith case [Reginald Charles Frith v. Josiah
Alexander Frith, 1906 AC 254 (PC)], AC p. 260)
‗… the donor of the power, for valuable consideration,
conferred upon the donee, authority to do a particular
thing in which the latter had an interest, namely, to apply
for the shares of the company which the donee was
promoting for the purpose of purchasing his own property
from him, and the donor sought to revoke that authority
before the benefit was reaped.’
The effect of all these cases appears to be stated accurately in
Bowstead on the Law of Agency, 8th Edn., p. 456. It is stated
(Article 138):
‗Where the authority of an agent is given … for the
purpose of effectuating any security, or of protecting or
securing any interest of the agent, it is irrevocable during
the subsistence of such security or interest.’* * *
My view of this document is as follows: I think its primary
object was to recover on behalf of the principal the fruits of
his decree. It contained incidentally a provision for the
employment of the agent, Vedavyasachar, in order to realise
that decree. It provides that his remuneration is to be one-half
of the proceeds. It contains an indemnity clause against any
out-of-pocket expenses which he is entitled also to recover
from the amount of the decree. But the object of the power of
attorney is not for the purpose of protecting or securing any
interest of the agent. I think that part of the agreement is
purely incidental. There is, however, another feature of this
document which seems to me to be conclusive against the
appellants. The last words,‗I shall not for any reason whatever, cancel without your
permission this authority which I have given to you, without
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seem to me to make express provision for the revocation of
the above power. It can be done in two ways: (a) by consent,
for that is what I understand ―your permission‖ to mean, and
(b) if that permission is withheld, on payment by the principal
of all out-of-pocket expenses and also remuneration for his
services. With regard to remuneration, the wording is vague,
―without giving the aforesaid relief for your trouble‖.‖
(emphasis supplied)
39. To the same effect is the decision of the High Court of Delhi in
Harbans Singh v. Shanti Devi [Harbans Singh v. Shanti Devi, 1977
SCC OnLine Del 102]. The High Court while dealing with the
question of whether the powers of attorney executed by the appellant
were cancelled validly, laid down the conditions of irrevocability of a
contract of agency as: (i) authority to agent given for valuable
consideration; (ii) such valuable consideration was given for the
purpose of effectuating a security or protecting or securing the
interest of the agent; (iii) agency not being irrevocable merely
because the agent has some interest in carrying it out or holds a
special right, such as a lien or advance, over its subject-matter. Thus,
the agency has to be specifically meant to secure the agent’s benefit
or interest. It further observed that the interest of the agent can be
inferred from the language of the document or from the course of
business between the principal and agent. The observations are
reproduced hereinbelow: (SCC OnLine Del)
―All the conditions of irrevocability are satisfied in the present
case. The authority to the agent was given for valuable
consideration which proceeded from the respondent. It was given
for the purpose of effectuating a security or protecting or
securing the interest of the agent. For, the only purpose of the
agency was to ensure and secure the performance of the contract
by the appellant in favour of the respondent for whom Shri
Gulati was acting as the husband and the nominee and,
therefore, a representative or an agent. Where the performance
of the agency is not to secure the interest or the benefit of the
agent then the agency is not irrevocable merely because the
agent has an interest in the exercise of it or has a special
property in or lien for advances upon the subject-matter of it.‖
(emphasis supplied)
xxx xxx xxx
45. Further, a mere use of the word ―irrevocable‖ in a PoA does not
make the PoA irrevocable. If the PoA is not coupled with interest, no
extraneous expression can make it irrevocable. At the same time,
even if there is no expression to the effect that the PoA is irrevocable
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but the reading of the document indicates that it is a PoA coupled
with interest, it would be irrevocable.The principles of construction
of a PoA termed as ―irrevocable‖ was explained in Manubhai
Prabhudas Patel v. Jayantilal Vadilal Shah [Manubhai Prabhudas
Patel v. Jayantilal Vadilal Shah, 2011 SCC OnLine Guj 7028]. The
relevant observations are reproduced below: (SCC OnLine Guj para
12)
―12. I am of the view that while construing a document, it is
necessary to determine the real intention of the parties. The
mere form in which document is couched is immaterial. The
intention of the parties has to be gathered from the terms of the
documents themselves and from such of the surrounding
circumstances, as later required to show in what manner the
language of the document is related to the existing fact. It is
very difficult task to know the intention of the parties on the
basis of the recital of the document. But, the Court can rely
safely on the language of the document, the language, which has
been used by the parties to manifest the intention of the parties.
If the Court goes on extraneous evidence, that may lead to more
difficulty and confusion. But, there are certain principles to be
borne in mind. The first principle is, the mere saying that the
power of attorney is an irrevocable power of attorney coupled
with interest is not the end of the matter. The Court, can clearly
say that the document, though, is styled as an irrevocable power
of attorney is not in substance a power coupled with interest so
as to make it an irrevocable power of attorney. At the same time,
even if there is no title to show that the power is an irrevocable
power, but, the substance of the entire document would suggest
that the same is an irrevocable power coupled with interest.
Therefore, a document has to be construed as a whole. A stray
sentence here and there cannot be picked out to construe a
document. To understand the tenor of the document and the
intention of the parties, it has to be read as a whole. The real
intention of the parties has to be covered not merely from what
ex facie is stated in the document, but, from the totality of the
recitals in the document. At this stage, I may quote with profit a
very lucid judgment rendered by learned Single Judge of the
Madras High Court explaining the general principles regarding
the construction of power of attorney. In Anantha Pillai v.
Rathnasabapathy Mudaliar [Anantha Pillai v. Rathnasabapathy
Mudaliar, 1968 SCC OnLine Mad 79], Ismail, J. (as he then
was), held thus: (SCC OnLine Mad)
‗The general principles regarding the construction of power
of attorney are well settled. Powers of attorney must be strictly
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construed as giving only such authority as they confer expressly
or by necessary implication. Where an act purporting to be done
under the power of attorney is challenged as being in excess of
the power, it is necessary to show that on a fair construction of
the whole instrument the authority in question is to be found
within the four corners of the instrument either by express terms
or by necessary implication. Some of the principles governing
the construction of a power of attorney are: (1) the operative
part of the deed is controlled by the recitals; (2) where an
authority is given to do particular acts, followed by general
words, the general words are restricted to what is necessary for
the performance of the particular acts; (3) the general words do
not confer general powers but are limited to the purpose for
which the authority is given and are construed as enlarging the
special powers only when necessary for that purpose; (4) a
power of attorney is construed so as to include all medium
powers necessary for its effective execution. Bearing these
general principles in mind the question for consideration is
whether the power of attorney in this case authorised the first
defendant to enter into an agreement to sell or authorised him to
execute a sale deed.’ ‖
xxx xxx xxx
(Emphasis Supplied)
101. A perusal of the aforesaid judgment shows that the essential
ingredients under Section 202 of the Contract Act are first, there shall be a
relationship in the capacity of ‘principal and agent’ between the parties and
second, the agent must have interest in the subject matter of the agency. If
both the conditions are fulfilled, the agency becomes irrevocable, and cannot
be terminated unilaterally at the behest of the principal. Thus, where a power
of attorney is coupled with an interest, it metamorphoses into an irrevocable
agency, unless expressly stated otherwise.
102. For a power of attorney to be irrevocable, it must have been given to
the agent for the purpose of effectuating a security, or protecting/securing the
interest of the agent. Thus, the agency has to be specifically meant to secure
the agent’s benefit or interest, which can be inferred from the language of the
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document or from the course of business between the principal and agent.
The intention of the parties has to be gathered from the terms of the
documents themselves and from the surrounding circumstances, which are
required to show in what manner the language of the document is related to
the existing facts.
103. In the present case, the sellers and the purchasers had executed the
Agreement to Sell, and were clearly in talks of sale/purchase of the suit
property. In this course of business and dealings between them, when a part
of the sale consideration stood paid, the sellers executed the GPA dated 03rd
August, 1989, against valuable consideration.
104. The purpose for executing the GPA, as is clear from the admission of
the appellant in her Evidence Affidavit, was to facilitate the handing over of
the possession of the suit property to the purchasers/respondent nos. 1 to 8 in
terms of Clause 4 of the Agreement to Sell. Thus, it is evident that the
purpose of the said GPA was meant to secure the interest of possession of the
purchasers in the suit property. The GPA is clearly coupled with the interest,
and is irrevocable in nature. Hence, the contention of the appellant that the
GPA lapsed upon the death of Smt. Nirmal Krishan is devoid of any merit,
and has to be rejected.
105. The reliance by the appellant on the case of M.S. Ananthamurthy
(Supra), to contend that the GPA in the present case is revocable, is
misplaced. In the facts and circumstances of the said decision, the Supreme
Court held that the GPA therein was revocable as it did not create any
interest in favor of the agent in the subject matter thereto. Furthermore, the
agent under the said GPA was not in possession of the property in question.
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106. Pertinently, with regard to GPAs and agreements to sell, the Supreme
Court in the celebrated judgment in the case of Suraj Lamp and Industries
Private Limited (Supra), itself has held that the agreement to sell and the
GPA can be used to obtain specific performance or to defend possession
under Section 53-A of the TP Act and that nothing prevents the affected
parties from getting registered deeds of conveyance to complete their title.
d. Possession of the purchasers is protected even in the absence of a Sale
Deed
107. The appellant has contended that the purchasers/respondent nos. 1 to 8
are estopped from setting up a case under Section 53-A of the TP Act, as the
same is contradictory to the case setup by them before the Trial Court,
wherein, they claimed ownership of the suit property by way of the GPA.
Additionally, the appellant contends that no recourse can be sought under
Section 53-A of the TP Act as the oral understanding was not in writing, and
the respondent nos. 1 to 8 were not ready and willing to perform their part of
the contract.
108. Rebutting the aforesaid, respondent nos. 1 to 8 have argued that the
purchasers have been duly put in possession of the suit property against the
payment of full sale consideration, and have been in uninterrupted
possession of the suit property since August, 1989. Hence, their possession
of the suit property, as purchasers, is protected under Section 53-A of the TP
Act.
109. At the outset, this Court notes that the unregistered Agreement to Sell,
in favour of the purchasers was executed on 24th January, 1989. The
Registration and Other Related Laws (Amendment) Act, 2001, which
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introduced the requirement of the registration of documents for the purposes
of Section 53-A of the TP Act, is prospective in nature, and came into force
with effect from 24th September, 2001. Since the Agreement to Sell in favour
of the purchasers is of the year 1989, the requirement of registration would
not apply to it.
110. In this regard, reliance is placed on the case of Gurmeet Kaur Versus
Harbhajan Singh and Another18, relevant paragraph of which, is
reproduced as under:
―xxx xxx xxx
9. It is an undisputed fact that the appellant/plaintiff proved the
documents being the agreement to sell, general power of attorney
and the receipt as Ex. P.W. ½ to Ex. P.W. ¼. These documents have
been executed prior to amendment of section 53-A of the Transfer of
Property Act, 1882 by Act 48 of 2001 and which came into effect
from 24.9.2001. These documents therefore need not have been
stamped or registered so as to create rights in terms of doctrine of
part performance under the then existing section 53-A of the
Transfer of Property Act. It is only by the subsequent amendment of
section 53-A of the Transfer of Property Act w.e.f 24.9.2001, that an
agreement to sell would not confer any rights in terms of the
doctrine of part performance if such an agreement to sell is not
registered. Since the amendment is prospective in nature, therefore,
the documents executed prior to 24.9.2001 being the documents Ex.
P.W. ½ to Ex. P.W. ¼ dated 19.4.1995 did not require registration
and stamping. This aspect has been dealt by this Court in detail in the
judgment in the case of Shri Ramesh Chand v. Suresh Chand,[(2012)
188 DLT 538.] and in which judgment this Court has referred to the
judgment of the Supreme Court in the case of Suraj Lamps and
Industries Pvt. Ltd. v. State of Haryana [(2011) 107 AIC 1 (SC)
: (2011) 183 DLT 1 (SC) : (2011) 89 ALR 445 (SC).], and as per
which Supreme Court judgment agreements to sell, general power of
attorneys and Wills which are validly executed are protected and such
documents will have rights flowing under the same in terms of section
18
2017 SCC OnLine Del 12863.
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53-A of the Transfer of Property Act, section 202 of the Indian
Contract Act and the relevant provisions of the Indian Succession Act
pertaining to devolution of properties by a Will le only such
documents executed post 24.9.2001 will not have validity if they are
not stamped and registered.
xxx xxx xxx‖
(Emphasis Supplied)
111. Accordingly, this Court will proceed by referring to the un-amended
Section 53-A of the TP Act, which deals with part-performance, as the
Agreement to Sell in favour of the respondent nos. 1 to 8, is of the year
1989, i.e., prior to the amendment of the year 2001. The said provision reads
as under:
―xxx xxx xxx
53A. Part performance. —
Where any person contracts to transfer for consideration any
immoveable property by writing signed by him or on his behalf from
which the terms necessary to constitute the transfer can be
ascertained with reasonable certainty, and the transferee has, in part
performance of the contract, taken possession of the property or any
part thereof, or the transferee, being already in possession, continues
in possession in part performance of the contract and has done some
act in furtherance of the contract,
and the transferee has performed or is willing to perform his part of
the contract, then, notwithstanding that the contract, though required
to be registered, has not been registered, or, where there is an
instrument of transfer, that the transfer has not been completed in
the manner prescribed therefore by the law for the time being in
force, the transferor or any person claiming under him shall be
debarred from enforcing against the transferee and persons
claiming under him any right in respect of the property of which the
transferee has taken or continued in possession, other than a right
expressly provided by the terms of the contract:
Provided that nothing in this section shall affect the rights of a
transferee for consideration who has no notice of the contract or of the
part performance thereof.
xxx xxx xxx‖
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112. Perusal of the aforesaid provision shows that Section 53-A of the TP
Act requires that there must be a contract in writing, for transfer of any
immovable property for consideration, and the terms necessary to constitute
the transfer must be ascertained with reasonable certainty therefrom. Further,
it is required that the transferee has in part-performance of the contract taken
possession of the property or any part thereof, and has performed or is
willing to perform his part of the contract.
113. Where these essential conditions under Section 53-A of the TP Act are
satisfied, the transferor and any person claiming under him, shall be
debarred from enforcing any right in respect of the property against the
transferee and persons claiming under him, other than a right expressly
provided by the terms of the contract. The transferor and person claiming
under him would stand debarred to this extent, notwithstanding, that the
contract was not registered or that the transfer has not been completed in the
manner prescribed by the law for the time being in force.
114. In the facts and circumstances of the present case, there exists a
written Agreement to Sell in favor of the purchasers/respondent nos. 1 to 8
for the transfer of the suit property for consideration. Additionally, there also
exists a GPA in favor of respondent no. 7.
115. Furthermore, the purchasers have been duly put in possession of the
suit property pursuant to the Agreement to Sell and GPA in their favour and
have been in uninterrupted continuous possession of the suit property since
at least August, 1989. The sellers have never disputed or challenged the
rights of the contesting respondents in this regard, and have not sought to
assert any right of ownership over the suit property.
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116. It is essential to take into account the admitted position of the
appellant that the respondent nos. 1 to 8 have not taken possession of the suit
property forcibly. The testimony of the appellant, i.e., PW-1, in this regard,
as recorded in her cross-examination dated 16th December, 2017, is
reproduced as under:
―xxx xxx xxx
Q Is it your testimony that possession of the property was forcibly
taken by the purchasers ?
A No , it was not forcibly taken.
xxx xxx xxx‖
(Emphasis Supplied)
117. The contention of the appellant that the purchasers/respondent nos. 1
to 8 are in unauthorized possession of the second floor of the suit property is
also not tenable. This is in view of the fact that the receipt dated 03rd August,
1989 categorically records that the sellers have handed over the vacant
physical possession of the self-occupied portion and the symbolic possession
of the tenanted portion of the suit property to the purchasers. In addition, the
argument of the appellant that the second floor of the suit property was in
possession of the sellers, and since none of the sellers were residing therein,
the purchasers started using the said portion without any authorization,
cannot sustain, since, the second floor, being in the vacant physical
possession of the sellers has clearly been handed over to the purchasers.
118. In furtherance of the purchasers occupying the suit property, they have
also paid the lease rent to the L&DO from the year 1989 to 1998, along with
other statutory dues with respect to the suit property.
119. Therefore, it is manifest that the purchasers have been in uninterrupted
and continuous possession of the suit property since the year 1989. Further,
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considering the ensuing facts and circumstances of the present case, this
Court has already recorded in the preceding paragraphs that the entire sale
consideration had been satisfied by the purchasers, and the purchasers have
fulfilled their obligations under the Agreement to Sell entered into with the
sellers. Thus, all the prerequisites of Section 53-A of the TP Act have been
complied with.
120. At this stage, it would be apposite to refer to the judgment passed in
the case of Ghanshyam Versus Yogendra Rathi19, wherein, the Supreme
Court held that where the entire sale consideration had been paid, and
possession of the property has been transferred, even if in view of an
agreement to sell, and not a sale deed, the transferee would be said to have
acquired ―de-facto possessory right‖ over the property, and the same cannot
be disturbed. The relevant paragraphs of the said judgment are reproduced as
under:
―xxx xxx xxx
9. No doubt, agreement to sell is not a document of title or a deed of
transfer of property by sale and as such, may not confer absolute
title upon the respondent-plaintiff over the suit property in view of
Section 54 of the Transfer of Property Act, 1882, nonetheless, the
agreement to sell, the payment of entire sale consideration as
mentioned in the agreement itself and corroborated by the receipt of
its payment and the fact that the respondent-plaintiff was put in
possession of the suit property in accordance with law as is also
established by the possession memo on record, goes to prove that the
respondent-plaintiff is de facto having possessory rights over the suit
property in part-performance of the agreement to sell. This
possessory right of the respondent-plaintiff is not liable to be
disturbed by the transferer i.e. the appellant-defendant. The entry of
the appellant-defendant over part of the suit property subsequently is
simply as a licensee of the respondent-plaintiff. He does not continue
to occupy it in capacity of the owner.
19
(2023) 7 SCC 361.
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10. In the wake of the finding that the abovementioned documents
have not been fraudulently obtained or have not been manipulated,
treating the said documents to be duly executed and as genuine, one
thing is clear that the respondent-plaintiff is in a settled possession
of the suit property at least in part-performance of the agreement
which cannot be disturbed or disputed by the transferer i.e. the
appellant-defendant.
xxx xxx xxx
16. Legally an agreement to sell may not be regarded as a
transaction of sale or a document transferring the proprietary rights
in an immovable property but the prospective purchaser having
performed his part of the contract and lawfully in possession acquires
possessory title which is liable to be protected in view of Section 53-A
of the Transfer of Property Act, 1882. The said possessory rights of
the prospective purchaser cannot be invaded by the transferor or any
person claiming under him.
17. Notwithstanding the above as the respondent-plaintiff admittedly
was settled with possessory title in part-performance of the agreement
to sell dated 10-4-2002 and that the appellant-defendant has lost his
possession over it and had acquired the right of possession under a
licence simpliciter, exhausted his right to continue in possession after
the licence has been determined. Thus, the appellant-defendant
parted with the possession of the suit property by putting the
respondent-plaintiff in possession of it under an agreement to sell.
The respondent-plaintiff in this way came to acquire possessory title
over the same. The appellant-defendant, as such, ceased to be in
possession of it as an owner rather occupied it as a licensee for a
fixed period which stood determined by valid notice, leaving the
appellant-defendant with no subsisting right to remain in possession
of the suit premises.
xxx xxx xxx‖
(Emphasis Supplied)
121. It would also be fruitful to refer to the judgment of the Supreme Court
in the case of Suraj Lamp (Supra) wherein, the Supreme Court held that the
GPA would be considered a relevant document for protecting possession in a
property under Section 53-A of the TP Act. Thus, it was held as follows:
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―xxx xxx xxx
24. We therefore reiterate that immovable property can be legally
and lawfully transferred/conveyed only by a registered deed of
conveyance. Transactions of the nature of ―GPA sales‖ or
―SA/GPA/will transfers‖ do not convey title and do not amount to
transfer, nor can they be recognised or valid mode of transfer of
immovable property. The courts will not treat such transactions as
completed or concluded transfers or as conveyances as they neither
convey title nor create any interest in an immovable property. They
cannot be recognised as deeds of title, except to the limited extent of
Section 53-A of the TP Act. Such transactions cannot be relied upon
or made the basis for mutations in municipal or revenue records. What
is stated above will apply not only to deeds of conveyance in regard to
freehold property but also to transfer of leasehold property. A lease
can be validly transferred only under a registered assignment of lease.
It is time that an end is put to the pernicious practice of SA/GPA/will
transactions known as GPA sales.
xxx xxx xxx
26. We have merely drawn attention to and reiterated the well-settled
legal position that SA/GPA/will transactions are not ―transfers‖ or
―sales‖ and that such transactions cannot be treated as completed
transfers or conveyances. They can continue to be treated as existing
agreements of sale. Nothing prevents the affected parties from
getting registered deeds of conveyance to complete their title. The
said ―SA/GPA/will transactions‖ may also be used to obtain specific
performance or to defend possession under Section 53-A of the TP
Act. If they are entered before this day, they may be relied upon to
apply for regularisation of allotments/leases by development
authorities. We make it clear that if the documents relating to
―SA/GPA/will transactions‖ have been accepted/acted upon by DDA
or other developmental authorities or by the municipal or Revenue
Authorities to effect mutation, they need not be disturbed, merely on
account of this decision.
27. We make it clear that our observations are not intended to in any
way affect the validity of sale agreements and powers of attorney
executed in genuine transactions. For example, a person may give a
power of attorney to his spouse, son, daughter, brother, sister or a
relative to manage his affairs or to execute a deed of conveyance. A
person may enter into a development agreement with a land developer
or builder for developing the land either by forming plots or by
constructing apartment buildings and in that behalf execute an
agreement of sale and grant a power of attorney empowering the
developer to execute agreements of sale or conveyances in regard to
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individual plots of land or undivided shares in the land relating to
apartments in favour of prospective purchasers. In several States, the
execution of such development agreements and powers of attorney are
already regulated by law and subjected to specific stamp duty. Our
observations regarding ―SA/GPA/will transactions‖ are not intended
to apply to such bona fide/genuine transactions.
xxx xxx xxx‖
(Emphasis Supplied)
122. In regard to Section 53-A of the TP Act, the Supreme Court in the case
of Ramesh Chand (D) Thr. Lrs. Versus Suresh Chand and Another20, has
held that the main ingredient for taking shelter under Section 53-A of the TP
Act is the factum of possession. Further, the Supreme Court reiterated that if
the conditions of Section 53-A of TP Act are fulfilled, then notwithstanding
that the transfer has not been completed in the manner prescribed by law, the
transferor will be debarred from taking the possession of the property. The
relevant extract from the aforesaid judgment is reproduced as under:
―xxx xxx xxx
30. According to Section 53A of the TP Act, where there is a contract
to transfer any immovable property in writing and the transferee has
in part performance of the contract taken the possession of the
property or part thereof, then notwithstanding that the transfer has
not been completed in the manner prescribed by law, the transferor
will be debarred from taking the possession of the property. The
essential conditions for invoking the doctrine of part-performance as
envisaged u/s 53A of TP Act have been enunciated by this Court in the
case of Nathulal v. Phoolchand [(1969) 3 SCC 120] thus:
―9. The conditions necessary for making out the defence of part
performance to an action in ejectment by the owner are:
(1) that the transferor has contracted to transfer for consideration
any immovable property by writing signed by him or on his behalf
from which the terms necessary to constitute the transfer can be
ascertained with reasonable certainty;
20
2025 SCC OnLine SC 1879.
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(2) that the transferee, has, in part performance of the contract,
taken possession of the property or any part thereof, or the
transferee, being already in possession continues in possession in
part performance of the contract;
(3) that the transferee has done some act in furtherance of the
contract; and
(4) that the transferee has performed or is willing to perform his
part of the contract.
If these conditions are fulfilled then notwithstanding that the
contract, though required to be registered, has not been registered,
or, where there is an instrument of transfer, that the transfer has not
been completed in the manner prescribed therefor by the law for the
time being in force, the transferor or any person claiming under him
is debarred from enforcing against the transferee any right in
respect of the property of which the transferee has taken or
continued in possession, other than a right expressly provided by the
terms of the contract.‖
31. A perusal of Section 53A of TP Act, as well as the case law on
point, it is forthcoming that one of the main ingredients for taking
shelter under Section 53A is the factum of possession. Unless the
transferee in the instrument of agreement to sale is able to prove that
he has been in possession of the suit property, no benefit u/s 53A will
be given. In the instant matter, the very fact that plaintiff has filed the
present suit for possession, along with other reliefs, shows that on the
date of filing of the suit, plaintiff was not in possession of the entire
suit property. Since there was no possession with the plaintiff, he
cannot derive any benefit under the doctrine of part-possession.
xxx xxx xxx‖
(Emphasis Supplied)
123. This Court has come to a considered finding that on the basis of the
evidence on record and considering the preponderance of probabilities, the
purchasers have been able to establish the payment of due amounts to the
sellers, fulfillment of their part of the contract and their possession of the suit
property. Whereas, the appellant had been unable to prove that any amounts
were due and payable by the purchasers to the sellers, in any manner
whatsoever.
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124. Thus, the purchasers are entitled to the benefit under Section 53-A of
the TP Act. Resultantly, the appellant, claiming her right under the original
sellers, is barred from seeking to enforce any purported right in relation to
the suit property against the purchasers, by virtue of Section 53-A of the TP
Act.
125. The contention of the appellant that the respondent nos. 1 to 8 cannot
take recourse under Section 53-A of the TP Act as the relief of seeking
specific performance of the Agreement to Sell stands time barred, has to be
necessarily rejected. It is no longer res integra that the legal bar placed by
Section 53-A of the TP Act and the protection afforded thereunder to the
purchaser in question, would be available even if the time period for filing a
suit for specific performance, has elapsed.
126. The Supreme Court in the case of Shrimant Shamrao Suryavanshi
and Another Versus Pralhad Bhairoba Suryavanshi and Others21, has held
that the relief under Section 53-A of the TP Act is available even if specific
performance of agreement to sell is barred by limitation, in the following
manner:
―xxx xxx xxx
7. A perusal of Section 53-A shows that it does not forbid a
defendant transferee from taking a plea in his defence to protect his
possession over the suit property obtained in part-performance of a
contract even though the period of limitation for bringing a suit for
specific performance has expired. It also does not expressly provide
that a defendant transferee is not entitled to protect his possession
over the suit property taken in part-performance of the contract if
the period of limitation to bring a suit for specific performance has
expired. In absence of such a provision, we have to interpret the
provisions of Section 53-A in a scientific manner. It means to look
into the legislative history and structure of the provisions of Section
53-A of the Act.
21
(2002) 3 SCC 676.
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xxx xxx xxx
15. The Special Committee’s report which is reflected in the aims
and objects of the amending Act, 1929 shows that one of the
purposes of enacting Section 53-A was to provide protection to a
transferee who in part-performance of the contract had taken
possession of the property even if the limitation to bring a suit for
specific performance has expired. In that view of the matter, Section
53-A is required to be interpreted in the light of the recommendation
of the Special Committee’s report and aims, objects contained in the
amending Act, 1929 of the Act and specially when Section 53-A itself
does not put any restriction to plea taken in defence by a transferee
to protect his possession under Section 53-A even if the period of
limitation to bring a suit for specific performance has expired.
16. But there are certain conditions which are required to be fulfilled if
a transferee wants to defend or protect his possession under Section
53-A of the Act. The necessary conditions are:
(1) there must be a contract to transfer for consideration of any
immovable property;
(2) the contract must be in writing, signed by the transferor, or by
someone on his behalf;
(3) the writing must be in such words from which the terms
necessary to construe the transfer can be ascertained;
(4) the transferee must in part-performance of the contract take
possession of the property, or of any part thereof;
(5) the transferee must have done some act in furtherance of the
contract; and
(6) the transferee must have performed or be willing to perform his
part of the contract.
xxx xxx xxx
20. It is, therefore, manifest that the Limitation Act does not
extinguish a defence, but only bars the remedy. Since the period of
limitation bars a suit for specific performance of a contract, if
brought after the period of limitation, it is open to a defendant in a
suit for recovery of possession brought by a transferor to take a plea
in defence of part-performance of the contract to protect his
possession, though he may not be able to enforce that right through
a suit or action.
xxx xxx xxx‖
(Emphasis Supplied)
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127. In view of the detailed discussion hereinabove, the appellant stands
debarred from enforcing any right in the suit property, and is not entitled to
seek any reliefs, as prayed for in the suit in question.
128. Further, the reliance put by the appellant on the case of Suraj Lamp
(Supra) is misplaced. The only proposition laid down in the said case is that
title cannot be transferred without valid sale deed. The decision in the said
case does not seek to take away the subsisting rights of a GPA holder, and
cannot be used to negate the specific rights conveyed under a GPA. In the
present case, especially, with the Agreement to Sell and GPA being valid, the
rights of the purchasers, i.e., respondent nos. 1 to 8 herein, under the said
documents, remain in force.
129. Similarly, the reliance by the appellant on the case of M.S.
Ananthamurthy (Supra), is totally misplaced as the said judgment does not
apply to the facts and circumstances of the present case. In the said case,
though a GPA had been executed, possession of the property in the said case
was never given to the GPA holder. Subsequently, the LRs of the actual
owner sold the property in question therein to a third party, by way of a
registered sale deed. There were subsequent transfers of the property in the
said case by way of registered sale deed/gift deed. It is in these factual
circumstances that the Supreme Court held that no interest was transferred to
the GPA holder merely on the basis of the unregistered agreement to sell and
GPA.
130. However, in the present case, undisputedly possession of the suit
property already stands transferred to the purchasers, who have been in
possession of the same since the year 1989. This is coupled with the fact that
the original sellers never challenged either the possession of the purchasers
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or their right under the Agreement to Sell and GPA, in any manner
whatsoever. Thus, the aforesaid case of M.S. Ananthamurthy (Supra), is
clearly distinguishable and not applicable to the present case.
e. Suit of the appellant for mere possession and mesne profits is not
maintainable in view of validity of the Agreement to Sell and GPA, and
is also barred by limitation
131. In the present case, as per the amended plaint, suit was filed seeking
mandatory injunction, for restraining the respondent nos. 1 to 8 from using
the suit property and for delivery of vacant and peaceful possession of the
suit property to the appellant herein. In the alternative, appellant has prayed
for possession of the suit property, mesne profits, and decree of injunction
for restraining the respondent nos. 1 to 8 from creating any third-party rights
in the suit property. In this factual scenario, the Trial Court held that the suit
filed by the appellant was barred by limitation.
132. The contention of the appellant herein is that the suit would be
governed by Article 65 of the Schedule to Limitation Act, and therefore, the
present suit is maintainable, having been filed within the period of 12 years.
133. Per contra, the argument raised by the respondent nos. 1 to 8 is that
since the substantive relief in the suit would have been of
declaration/cancellation, therefore, Article 58 of the Schedule to Limitation
Act would be applicable, which prescribes a limitation period of three years.
The said period of limitation for challenging the Agreement to Sell, and the
GPA, expired on 24th January, 1992 and 03rd August, 1992, respectively,
rendering the suit filed by the appellant, grossly barred by limitation.
134. In this regard, it is to be noted that the plaint admits and acknowledges
execution of the Agreement to Sell and GPA, in favour of the purchasers, as
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well as the fact that possession of the suit property was handed over to the
purchasers, pursuant to the said documents.
135. It is an admitted fact that Smt. Nirmal Krishan, along with Shri
Sanjeev Sethi and Shri Rajeev Luthra, had executed the Agreement to Sell
dated 24th January, 1989 in favour of respondent nos. 1 to 8 herein. Further,
the contention of the appellant that the Agreement to Sell stood
automatically cancelled, has already been rejected by this Court.
136. Furthermore, it is also an admitted position that the sellers executed
the GPA in favour of respondent no. 7 herein, i.e., Shri U.S. Sitani, to
facilitate handing over of the possession of the suit property to the
purchasers/respondent nos. 1 to 8. It is on the strength of this GPA, that the
suit property was got vacated by the purchasers from the tenants occupying
portions of the suit property. Besides, the plaint raises absolutely no
challenge to the GPA. Pertinently, this Court has already held in the
preceding paragraphs that the said GPA was irrevocable, and did not lapse on
the demise of Smt. Nirmal Krishan.
137. It is to be noted that the purchasers, as defendant nos. 1 to 8 in the
suit, have stated in their written statement that they have been in continuous
possession since the year 1989, and no dispute as to the title had been raised
in the last 11 years by the original sellers.
138. Additionally, the appellant has placed reliance on the alleged letter
dated 23rd November, 1993 purportedly sent by Shri G.D. Krishan, asking
the purchasers to pay the balance sale consideration, failing which the
Agreement to Sell, shall stand cancelled. However, as noted herein above,
the acknowledgement card with respect to the said letter is of a dubious
nature, and the appellant has been unable to prove the same. Even otherwise,
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said alleged letter becomes immaterial on account of the fact that Shri G.D.
Krishan never took any steps in furtherance of the alleged letter.
139. Thus, the possession of the purchasers is undisputed and has been
established during the course of evidence. It is also undisputed that the
purchasers are in possession of the suit property on the basis of the
Agreement to Sell, and GPA in their favour.
140. In the present case, the contesting respondents are admittedly not
trespassers, nor persons who have taken forcible possession of the property.
Rather, they are purchasers under an Agreement to Sell, and power of
attorney holder under an irrevocable GPA.
141. These documents, i.e., the Agreement to Sell and the GPA, grant rights
and interests, including ‗de-facto possessory rights’ to the purchasers in the
suit property. These documents would, thus, create a cloud or some apparent
defect in the title of the original sellers, and the persons claiming under
them, which also includes the appellant herein. Therefore, where the
appellant is admittedly not in possession of the suit property, and has filed
the suit seeking possession on the basis of title, she must necessarily remove
the cloud over her title in the suit property by seeking necessary declaratory
reliefs.
142. Accordingly, in view of the valid rights being conferred upon the
purchasers in view of the Agreement to Sell and the GPA, followed by
handing over possession to the purchasers, this Court rejects the contention
of the appellant that the said documents did not create any right or interest in
favour of the purchasers. Thus, the contention of the appellant, that there
was no need to challenge the said documents, does not hold any water and is
accordingly rejected.
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143. In view of the aforesaid, the relief of declaration/cancellation that
ought to have been sought by the plaintiffs in the suit would have been in the
nature of ‗substantive relief’. Whereas, the relief of mandatory injunction
and possession, as sought by the plaintiffs in the suit, is a ‗consequential
relief’, which could have only been granted if the declaratory relief of title or
cancellation of the Agreement to Sell and GPA, had been sought.
144. Without challenging the transaction documents, the consequential
reliefs as claimed, are not maintainable. With the purchasers having been
granted wide sweeping rights with respect to the suit property by way of the
GPA, the consequential reliefs as sought in the suit, are not maintainable and
are barred by law, since the GPA remains unchallenged.
145. Thus, a simpliciter suit for injunction/possession cannot lie against the
contesting respondents. The reliefs, as sought in the plaint, i.e., the decree of
mandatory injunction, possession, mesne profits and permanent injunction,
are not maintainable, since principal declaratory reliefs challenging and
seeking cancellation of the Agreement to Sell and GPA have not been
sought.
146. The law is well settled in this regard that where the principal
declaratory relief is barred by limitation, the consequential reliefs, which
derive their very foundation and enforceability from the existence of the
declaratory decree, would also collapse as being time barred. This Court is
reminded of the adage that ‗where the foundation falls, all actions flowing
therefrom also collapse’.
147. In the case of Padhiyar Prahladji Chenaji (Deceased) Through
Legal Representatives Versus Maniben Jagmalbhai (Deceased) Through
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Legal Representatives and Others22, it was held that once the suit is held to
be barred by limitation qua the declaratory relief and when the relief for
permanent injunction was a consequential relief, the prayer for permanent
injunction, which was a consequential relief can also be said to be barred by
limitation. It has been held that under normal circumstances, the relief of
permanent injunction sought is a substantive relief and the period of
limitation would commence from the date on which the possession is sought
to be disturbed, so long as the interference in possession is continuous.
However, in the case of a consequential relief, when the substantive relief of
declaration is held to be barred by limitation, the said principle shall not be
applicable. Thus, it has been held as follows:
―xxx xxx xxx
17. Therefore, once the suit is held to be barred by limitation qua the
declaratory relief and when the relief for permanent injunction was
a consequential relief, the prayer for permanent injunction, which
was a consequential relief can also be said to be barred by limitation.
It is true that under normal circumstances, the relief of permanent
injunction sought is a substantive relief and the period of limitation
would commence from the date on which the possession is sought to
be disturbed so long as the interference in possession continuous.
However, in the case of a consequential relief, when the substantive
relief of declaration is held to be barred by limitation, the said
principle shall not be applicable.
xxx xxx xxx‖
(Emphasis Supplied)
148. Likewise, in the case of Raj Kumari Garg Versus S.M. Ezaz & Ors.23,
it has been held that in a suit having been filed for seeking possession,
without seeking declaration of cancellation of documents, when the prayer
for declaration would be time barred under Article 58 of the Limitation Act,
22
2022 SCC OnLine SC 258.
23
2012 (132) DRJ 108 (DB).
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mere suit for possession would also be barred by limitation. Thus, it was
held as follows:
―xxx xxx xxx
19. The learned single Judge has referred to the provisions of the
Limitation Act, 1963 (hereinafter referred to as the ‗Limitation Act‘).
It can really not be disputed that Article 58 of the Schedule to the
Limitation Act prescribing period of limitation for suits relating to
declaratory decrees would apply if the documents have to be
cancelled. The period prescribed is three (3) years from the date the
right to sue accrues. In fact, under Section 3 of the Limitation Act,
suits, appeals and applications made after the prescribed period of
limitation, subject to the provisions of Sections 4 to 24 of the
Limitation Act, are liable to be dismissed even though limitation may
not have been set up as a defence. If the appellant was to claim
cancellation of the documents executed in favour of respondents 3 &
4 on 7.7.1998, execution of which is not denied nor receipt of full
consideration with possession being parted, the period of limitation
had expired long time back in July, 2001. The suit for possession
was filed in the year 2009, i.e., after eleven (11) years from the date
when the cause of action accrued.
20. The reason why the three issues have been dealt with together is
because of the ingenious frame of the suit and the plea sought to be
advanced on behalf of the appellant that she does not seek
cancellation of documents but only seeks possession and, thus, the
limitation should be treated as twelve (12) years.
21. The aforesaid plea is only stated to be rejected as the issue is no
more res integra in view of the judgement of the Division Bench of this
Court in Jyotika Kumar v. Anil Soni156 (2009) DLT 685 (DB) : 2009
(108) DRJ 119 [DB]. The factual matrix is quite similar where
possession was sought without seeking cancellation of the
documents and also from parties with whom there was no privity of
contract. Thus, the judgement applies on all fours. It has been
observed that there can be no valid cause of action on the date of
filing of the suit when the prayer for declaration would be time
barred under Article 58 of the Limitation Act. A mere suit for
possession could not have been maintained.
22. It is quite obvious that the appellant has filed the mere suit for
possession with an injunction without seeking declaration of
cancellation of documents being conscious of the claim for
cancellation being beyond time and, thus, would have faced a
defence of the suit being barred by time. An illusion of cause of
action is sought to be created to get over the period of limitation.
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There has to be a meaningful reading of the plaint and not a mere
formal reading as observed by the Supreme Court in T.
Arivandandam v. T.V. Satyapal (1977) 4 SCC 467.
xxx xxx xxx
24. We are in complete agreement with the views expressed by the
learned single Judge that the plaint as framed merely for possession
cannot be maintained in law without the relief of declaration for
cancellation of the documents executed by the appellant in favour of
respondents 3 & 4 and the real issue cannot be obfuscated by
seeking to raise a plea that only possession is being sought (and that
too from respondents 1 & 2) as those respondents do not have any
right to continue in possession even though there is no privity of
contract between the appellant and respondents 1 & 2.
xxx xxx xxx
26. There can be no doubt that the parties have contracted to
transfer the immovable property when they executed the agreement
to sell & purchase and collateral documents. It is also coupled with
possession being parted with by the appellant in favour of
respondents 3 & 4 in part performance of the contract and full
consideration stands paid by respondents 3 & 4 and appropriated by
the appellant. Thus, the prohibition envisaged against the transferor
in the absence of any instrument to transfer would come into play
under the provisions of Section 53A of the TP Act. In fact, the right to
make further transfers has been specifically conferred under Clause
18 of the agreement to sell & purchase dated 7.7.1998 as observed by
the learned single Judge. It is in exercise of such a right that
respondents 3 & 4 executed the agreement to sell dated 1.5.2004 in
favour of respondents 1 & 2.
xxx xxx xxx
29. Learned counsel for the appellant laid emphasis only on the views
expressed by the Supreme Court in Rambhau Namdeo Gajre
case (supra), which places reliance on State of U.P. v. District Judge
case (supra). The similarity between the present case and the facts of
that case rest only with there being an agreement to sell without there
being a sale deed. There were no collateral documents executed. The
party purchasing under the agreement to sell sold it further to a third
party who in turn claimed the defence of Section 53A of the TP Act.
One important fact in that case noticed is that the original agreement
to sell was not proved and neither was it brought on record. It is in
these circumstances that the subsequent purchaser was held not
entitled to the defence of Section 53A of the TP Act. In the facts of the
present case, all the rights are transferred by the appellant to
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respondents 3 & 4 under the agreement to sell & purchase which is
duly registered and is accompanied by other collateral documents
like the GPA, SPA, Will, etc. and parting of notional possession as
there was a licensee. Ultimately the physical possession also came to
respondents 3 & 4. A specific clause 18 of the agreement to sell &
purchase confers unfettered and uninterrupted rights and powers on
Respondents 3 & 4 to further sell or otherwise transfer, in any
manner, in whole or in part to anybody and that the appellant would
have no claim or objection to the same. Therefore, the appellant
gave the unfettered right of assignment of their rights under the
agreement to sell dated 7.7.1998 to respondents 3 & 4. There was no
such authority in Rambhau Namdeo Gajre case (supra). In the present
case both the first purchaser and the subsequent purchase have been
made parties and respondents 1 & 2 are claiming under respondents 3
& 4. Respondents 3 & 4 have already sued for getting the property
converted into freehold and for getting the conveyance deed executed
in their favour as the intent of the appellant has become dishonest
when the conversion was applied for conversion of leasehold rights
into freehold.
30. Section 53A of the T.P.A. debars the transferor or any person
claiming under him‖ from enforcing against ―the transferee and
persons claims under him‖ any right in respect of the property of
which the transferee has taken or continued in possession, other
than the right expressly provided by the terms of the contract. The
said provision, therefore, consciously protects the rights of not only
the transferee, but also of persons claiming under the transferee,
even though the rights of the transferee are not perfected as there is
only an agreement to sell and not a registered sale deed/conveyance
deed. Therefore, it cannot be argued that a person claiming under
the transferee would not be entitled to protect his possession, merely
because the title of the transferee was not perfected. The intention of
the law clearly is to protect the rights of not only the transferee, but
also of persons claiming under the transferee, even though the
transferee does not have perfect title. If the transferee had a
perfected title on the basis of a registered conveyance deed, the
question of involving Section 53A of the TPA would not arise.
xxx xxx xxx
34. Another aspect taken note of in the impugned order and which was
canvassed before us arises from the judgement of the Supreme Court
in Suraj Lamp & Industries Private Limited (2) Through
Director v. State of Haryana(2012) 1 SCC 656. The execution of
agreement to sell & purchase coupled with collateral documents like
GPA, SPA, Will, etc. has been a common practice in Delhi. The
validity of such a practice has been examined in the said judgement
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and it has been held that the bunch of such documents cannot be
recognized as deeds of title, ―except to the limited extent of Section
53A of the TP Act‖. In fact, it has been observed in paras 26 & 27
that the observations of the Supreme Court are not intended in any
way to affect the validity and powers of attorney executed in genuine
transactions and the bunch of documents can continue to be treated
as existing agreements of sale which would not prevent the affected
parties from getting the registered deeds of conveyance to complete
their title. The said bunch of documents can also be used to obtain
specific performance or to defend possession under Section 53A of
the TP Act. We reproduce para 26 of the said judgement as under:
―26. We have merely drawn attention to and reiterated the
well-settled legal position that SA/GPA/WILL transactions are
not ‗transfers’ or ‗sales’ and that such transactions cannot be
treated as completed transfers or conveyances. They can
continue to be treated as existing agreement of sale. Nothing
prevents affected parties from getting registered Deeds of
Conveyance to complete their title. The said ‗SA/GPA/WILL
transactions’ may also be used to obtain specific performance
or to defend possession under Section 53A of Transfer of
Property Act. If they are entered before this day, they may be
relied upon to apply for regularization of allotments/leases by
Development Authorities. We make it clear that if the documents
relating to ‗SA/GPA/WILL transactions’ has been accepted
acted upon by DDA or other developmental authorities or by the
Municipal or revenue authorities to effect mutation, they need
not be disturbed, merely on account of this decision.‖
It is, thus, clear that the present case fits in with the legal principles
laid down and the defence of Section 53A of the TP Act in such a case
would be available to respondents 3 & 4 and since respondents 1 & 2
are claiming under them, similarly to them too.
xxx xxx xxx‖
(Emphasis Supplied)
149. Similarly, in the case of Mallavva and Another Versus
Kalsammanavara Kalamma and Others24, it was held that where the relief
for possession is a consequential relief and the substantive relief is for
declaration, the period of limitation is required to be considered with respect24
2024 SCC OnLine SC 3846.
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to the substantive relief claimed and not the consequential relief. Thus, it
was held as follows:
―xxx xxx xxx
35. The decision in the case of Rajpal Singh v. Saroj (Deceased)
through Legal Representatives &, (2022) 15 SCC 260, relied upon by
the learned counsel appearing for the appellants is also of no avail. In
the said case, this Court observed as under:
―14. The submission on behalf of the original plaintiff (now
represented through her heirs) that the prayer in the suit was also
for recovery of the possession and therefore the said suit was filed
within the period of twelve years and therefore the suit has been
filed within the period of limitation, cannot be accepted. Relief for
possession is a consequential prayer and the substantive prayer
was of cancellation of the sale deed dated 19-4-1996 and
therefore, the limitation period is required to be considered with
respect to the substantive relief claimed and not the consequential
relief. When a composite suit is filed for cancellation of the sale
deed as well as for recovery of the possession, the limitation
period is required to be considered with respect to the substantive
relief of cancellation of the sale deed, which would be three years
from the date of the knowledge of the sale deed sought to be
cancelled. Therefore, the suit, which was filed by the original
plaintiff for cancellation of the sale deed, can be said to be
substantive therefore the same was clearly barred by limitation.
Hence, the learned trial court ought to have dismissed the suit on
the ground that the suit was barred by limitation. As such the
learned first appellate court was justified and right in setting
aside the judgment and decree passed by the learned trial court
and consequently dismissing the suit. The High Court has
committed a grave error in quashing and setting aside a well-
reasoned and a detailed judgment and order passed by the first
appellate court dismissing the suit and consequently restoring the
judgment and decree passed by the trial court.‖
36. Thus, it appears that two reliefs were prayed for. One for
cancellation of the Sale Deed and the second for recovery of
possession. The Court treated the relief for possession as
consequential prayer and the relief for cancellation of Sale Deed as
the substantive prayer.
37. In such circumstances referred to above, the Court held that
if a composite suit is filed for cancellation of Sale Deed as well as for
recovery of possession, the limitation period should be considered
with respect to the substantive relief of cancellation of Sale Deed
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which would be three years from the date of knowledge of Sale Deed
sought to be cancelled.
38. The dictum as laid in Rajpal Singh (supra) cannot be made
applicable to the facts and circumstances of the case on hand. The
reason is simple. Ordinarily when, a suit is filed for cancellation of
Sale Deed and recovery of possession, the same would suggest that
the title of the plaintiff has already been lost. By seeking to get the
Sale Deed set aside on the grounds as may have been urged in the
plaint, the plaintiff could be said to be trying to regain his title over
the suit property and recover the possession. In such circumstances,
the period of limitation would be three years and not twelve years.
39. In view of the aforesaid discussion, this appeal fails and is
hereby dismissed.
xxx xxx xxx‖
(Emphasis Supplied)
150. At this stage, it would also be fruitful to refer to the judgment passed
by the Division Bench of this Court in the case of Inderjeet Singh Bindra
Versus Ramesh Kumari and Others25, where in the facts of the said case, a
sale deed had been executed on the basis of a registered GPA, and
cancellation of only sale deed was sought in the plaint. Subsequent
application for amendment for seeking prayer for cancellation of GPA was
rejected by the Single Judge. The same was upheld by the Division Bench on
the ground that seeking the relief of cancellation of GPA would be barred by
limitation. Thus, the Division Bench, held as follows:
―xxx xxx xxx
16. The crux of the issue is whether it is Article 59 or Article 65,
which would apply to the present facts in hand. The aforesaid
Articles are reproduced as under:
59. To cancel or set aside an Three When the facts
instrument or decree or for the years. entitling the plaintiff
rescission of a contract. to have the instrument
or decree cancelled
or set aside or the25
2025 SCC OnLine Del 7100.
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contract rescinded
first become known to
him.
65. For possession of immovable Twelve When the possession
property or any interest therein years. of the defendant
based on title. Explanation.-- becomes adverse to
For the purposes of this the plaintiff
article-- (a)where the suit is by
a remainderman, a reversioner
(other than a landlord) or a
devisee, the possession of the
defendant shall be deemed to
become adverse only when the
estate of the remainderman,
reversioner or devisee, as the
case may be, falls into
possession; (b) where the suit is
by a Hindu or Muslim entitled to
the possession of immovable
property on the death of a Hindu
or Muslim female, the
possession of the defendant shall
be deemed to become adverse
only when the female dies;
(c)where the suit is by a
purchaser at a sale in execution
of a decree when the judgment-
debtor was out of possession at
the date of the sale, the
purchaser shall be deemed to be
a representative of the judgment
debtor who was out of
possession.
xxx xxx xxx
18. Before determining the applicability of the aforesaid Articles to the
present case, a perusal of the difference between Sections 31 and 34 of
the Specific Relief Act, 1963 [hereinafter referred to as ‗SRA’] is
required. Section 31 of the SRA empowers a person who is a party to
the written instrument to seek cancellation of the instrument, which is
void or voidable, to protect himself from the injury which such
instrument may cause. On the other hand, Section 34 of the SRA
provides that a person entitled to any legal character or to any right
as to any property may seek a declaration of such legal character or
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person. The distinction between the two provisions lies in the nature of
relief sought- Section 31 of the SRA pertains to the annulment of a
particular document, whereas Section 34 of the SRA pertains to the
declaration and establishment of a legal right or status as against a
claimant.
xxx xxx xxx
21. In the case in hand, the GPA is prima facie valid unless it is
proved that there was a revocation of the same. On a perusal of the
13 Sale Deeds, it is evident that they were executed by Mr. Bhullar in
the capacity of an agent of the Appellant, through the GPA executed
by the Appellant. Further, the Appellant has stated in Para 7 of the
plaint that he asked Mr. Bhullar to bring back the GPA, and
thereafter, he revoked the GPA. However, no written document
signifying the revocation of the GPA has been filed by the Appellant.
22. It is pertinent to note that a duly registered GPA can only be
revoked by a registered Deed of Revocation. Thus, in the absence of
a Deed of Revocation, this Court is prima facie of the view that the
GPA has not been revoked in accordance with the law. Accordingly,
Article 59 would be attracted as the fraud, which the Appellant
asserts is required to be proved.
23. Further, learned counsel representing the Appellant has placed
reliance on the judgment rendered by the Supreme Court in Shanti
Devi (supra), whereby in the absence of sale consideration being
tendered, the sale deed was made. Thus, in the eyes of law, the sale
deed cannot be said to be executed, and therefore, the plaintiff would
not be required to seek the cancellation of the said instrument.
However, in the case in hand, the instrument, i.e., the GPA prima facie
is a valid document. Hence, the aforesaid judgment is distinguishable
and not applicable to the present case.
24. Further, reliance is placed upon the judgment rendered in Life
Insurance Corporation of India (supra), whereby an amendment of
the plaint was sought, for the purpose of enhancing the amount
towards damages in a suit for specific performance of an agreement.
The issue, herein, was with regard to Sections 21(5) and 22(2) of the
SRA i.e., specific provisos permitting amendment of a plaint for
including a claim in cases where the plaintiff had not claimed
compensation earlier. The Court, herein, allowed the amendment.
However, the ratio of the aforesaid judgment is not applicable in the
case in hand as the same is different from the peculiar facts of the
present case.
25. Therefore, this Court is of the considered view that Article 59 is
attracted in the present case. Though the present suit is one for
possession, but the substantive relief is for cancellation/annulment
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of the various Sale Deeds executed by the Appellant through his
GPA. By the proposed amendment, the prayer that was sought to be
introduced was for cancellation of the GPA after a period of eight
years after the Appellant came to know of the Sale Deeds executed
on the strength of GPA and after seven years of filing of the suit.
Thus, the relief sought to be added by the Amendment Application is
barred under Article 59.
xxx xxx xxx‖
(Emphasis Supplied)
151. As a sequitur to the aforesaid, it is manifest that where the principal
relief is barred by limitation, the consequential relief would also be time
barred. In the present facts, the principal relief of declaration/cancellation of
the Agreement to Sell and the GPA, would be governed under Article 58 of
the Limitation Act, and the same stands expired on 24th January, 1992 and
03rd August, 1992, respectively. Since the suit was filed in the year 1999, this
Court concurs with the finding of the Trial Court that the suit was barred by
limitation.
152. Even otherwise, where challenge to the Agreement to Sell and GPA
stands time barred, the appellant cannot be allowed to evade the laws of
limitation and use clever drafting to portray the suit as being simpliciter suit
for possession, injunction and mesne profit. What cannot be done directly,
cannot be allowed to be done indirectly. Reliance is placed in this regard on
the case of Basavraj Versus Indira and Others26, wherein, the Supreme
Court held as follows:
―xxx xxx xxx
16. In the case in hand, the compromise decree was passed on 14-10-
2004 in which the plaintiffs were party. The application for
amendment of the plaint was filed on 8-2-2010 i.e. 5 years and 03
months after passing of the compromise decree, which is sought to be
challenged by way of amendment. The limitation for challenging any
26
(2024) 3 SCC 705.
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decree is three years (reference can be made to Article 59 in Part IV
of the Schedule attached to the Limitation Act, 1963). A fresh suit to
challenge the same may not be maintainable. Meaning thereby, the
relief sought by way of amendment was time-barred. As with the
passage of time, right had accrued in favour of the appellant with
reference to challenge to the compromise decree, the same cannot be
taken away. In case the amendment in the plaint is allowed, this will
certainly cause prejudice to the appellant. What cannot be done
directly, cannot be allowed to be done indirectly.
xxx xxx xxx‖
(Emphasis Supplied)
153. In view of the detailed discussed hereinabove, this Court finds no
infirmity with the finding of the Trial Court that the suit was barred by
limitation.
f. Appellant has approached this Court with unclean hands on account of
deliberate and intentional mis-statement before this Court
154. There is yet another aspect of the present matter which has to be
considered by this Court with regard to statements made by the plaintiffs in
the suit, i.e., the appellant and her brother, respondent no. 11 herein.
155. It is pertinent to note that when the issue of limitation was raised by
the contesting respondents in their written statement, the plaintiffs made an
assertion in the replication filed before the Trial Court that the plaintiffs,
have been living abroad most of the time, and thereby, were not able to
initiate any action with respect to the suit property earlier. However, during
the cross-examination before the Trial Court, the appellant categorically
stated that ―she has never resided in any country other than India‖.
156. Thus, clearly, the appellant made false statements on oath and
approached the Court with unclean hands.
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g. Present litigation being a proxy litigation
157. Furthermore, the present litigation is nothing but a proxy litigation,
since the appellant is stated to have already sold her interest in the suit
property in favour of third parties, being Shri Mahesh Kapoor and Smt. Usha
Kapoor, for a sum of Rs. 77.50 Lacs, vide an Agreement to Sell dated 05th
December, 2005. The appellant has admitted in her cross-examination that
after she gets possession of the suit property, she will sell it to one Shri
Mahesh Kapoor.
158. It is to be noted that upon the demise of the appellant on 07th
September, 2020, an impleadment application was filed by the LRs of the
deceased appellant, as well as third parties, namely, Shri Mahesh Kapoor and
Smt. Usha Kapoor, seeking to assert their rights under the Agreement to Sell
dated 05th December, 2005. However, the said application for impleadment
qua the third parties, was dismissed by this Court vide order dated 05th May,
2022. Thus, it is manifest that the present proceedings are being pursued by
a speculative litigant who has invested in a disputed property.
CONCLUSION
159. On the basis of the detailed discussion hereinabove, this Court does
not find any error in the findings of the learned Trial Court. No merit is
found in the present appeal. The same is accordingly dismissed.
160. The pending applications also stand disposed of.
MINI PUSHKARNA
(JUDGE)
APRIL 17, 2026
Kr/Au/Ak/Sk
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