Delay And Laches In Specific Performance Suits For Urban Properties Will Be Frowned Upon: Delhi High Court - 2025-08-06

Forged Agreement, Delayed Suit: Delhi HC Vacates Injunction in Property Dispute, Cites Escalating Real Estate Prices

New Delhi: In a significant ruling on specific performance suits, the Delhi High Court has vacated an interim injunction in a property sale dispute, primarily relying on a forensic report that found the seller's signature on the sale agreement to be forged. Justice Manmeet Pritam Singh Arora underscored that courts must be cautious of suits filed after significant delays, especially in urban areas with rapidly escalating property values.

The Court also invoked its power to release the property from the legal restrictions of lis pendens (a pending lawsuit affecting the property), allowing the owners to deal with it freely.

The Case at a Glance

The lawsuit, Parmeet Singh Anand & Anr. vs. Subhash Chand Aggarwal & Anr. , was initiated by the plaintiffs seeking to enforce an "Agreement-cum-Receipt" dated July 12, 2020. They claimed the defendants had agreed to sell them the first floor of a property in Gujranwala Town for Rs. 4.82 crores. The plaintiffs alleged they had paid an advance of Rs. 25 lakhs (Rs. 20 lakhs via two cheques and Rs. 5 lakhs in gold). Based on these claims, the court had initially granted an ex-parte injunction on November 30, 2022, freezing the property's title and possession.

Clashing Arguments: Forgery vs. Oral Agreement

Plaintiffs' Contentions: -

The plaintiffs, represented by Senior Advocate J.P. Sengh, argued that a valid agreement was executed. -

They claimed to have been ready and willing to pay the balance, having arranged bank loans and sent legal notices. -

They attributed the 2.5-year delay in filing the suit to oral assurances from the defendants, who allegedly cited a dispute with a tenant as a reason for postponement.

Defendants' Defense: - The defendants vehemently denied the allegations, asserting that the "Agreement-cum-Receipt" was a forged and fabricated document. -

They stated they had filed a police complaint regarding the forgery. -

Critically, they denied receiving any advance payment, noting that the alleged cheques were never encashed and the claim of payment in gold was unsubstantiated and unusual. -

Defendant No. 2, a co-owner, had not signed the document at all.

The Turning Point: The Forensic Report

The case took a decisive turn after the Court, on May 24, 2024, referred the disputed signature of Defendant No. 1 to the Forensic Science Laboratory (FSL) for verification. The FSL report, dated November 29, 2024, concluded unequivocally that the signature on the agreement did not match the specimen signatures of Defendant No. 1.

Accepting this report at the prima facie stage, Justice Arora made several key findings: -

The plaintiffs failed to establish the existence of a validly executed agreement. -

The claim of advance payment was unsubstantiated; the cheques were never encashed, and the unusual payment via gold was not proven.

Court's Reasoning: Delay and Laches in an Era of "Galloping Inflation"

Beyond the forgery, the Court heavily criticized the plaintiffs' delay in approaching the court. The judgment emphasized that the plaintiffs were aware of the defendants' unwillingness to proceed with the sale as early as September 2020 but waited over two years to file the suit.

Citing the Supreme Court's landmark judgments in K.S. Vidyanadam v. Vairavan and Saradamani Kandappan v. S. Rajalakshmi , the Court highlighted the modern economic reality of real estate.

"The principle that time is not of the essence of contracts relating to immovable properties took shape in an era when market values of immovable properties were stable... In these days of galloping increases in prices of immovable properties, to hold that a vendor... did not intend that time should be the essence, will be a cruel joke on him, and will result in injustice," the Court observed, quoting the Supreme Court.

The judgment noted that a plaintiff's failure to file a suit immediately after a breach indicates a lack of readiness and willingness, making the grant of specific performance inequitable due to the significant rise in property prices during the period of delay.

Final Decision and Directives

Based on these findings, the Delhi High Court:

1. Dismissed the plaintiffs' application for an injunction (I.A. No. 20016/2022).

2. Allowed the defendants' application to vacate the interim order dated November 30, 2022 (I.A. No. 14311/2023).

3. Released the suit property from the rigours of Section 52 of the Transfer of Property Act, 1882, stating it would be "inequitable" to keep the defendants' property entangled in litigation.

4. Directed the SHO of PS-Model Town to examine the police complaint filed by the defendants regarding the forgery, taking into account the FSL report.

5. Ordered the release of Rs. 5 crores , which the plaintiffs had deposited with the Court Registry, back to them with accrued interest.

The ruling serves as a strong reminder that parties seeking specific performance for immovable property must act swiftly and that courts will rigorously scrutinize claims resting on disputed documents and unexplained delays.