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SUPREME COURT OF INDIA
M.R. SHAH, KRISHNA MURARI, JJ.
Balram Singh – Appellant
Versus
Kelo Devi – Respondent
Civil Appeal No. 6733 of 2022
Decided On : 23-09-2022
Agreement to Sell – Suit for Permanent Injunction – Having conscious of fact that plaintiff might not succeed in getting relief of specific performance of such agreement to sell as the same was unregistered, plaintiff filed a suit simplicitor for permanent injunction only – In a given case, an unregistered document can be used and/or considered for collateral purpose – However, at the same time, plaintiff cannot get relief indirectly which otherwise he/she cannot get in a suit for substantive relief, in present case relief for specific performance – Plaintiff cannot get relief even for permanent injunction on the basis of unregistered document/agreement to sell, more particularly when defendant specifically filed counter-claim for getting back possession which was allowed by Trial Court – Plaintiff cannot get relief by clever drafting – Impugned judgment and decree set aside and counter-claim filed by original defendant allowed. (Paras 6, 7 and 8)
Facts of the case:
Feeling aggrieved and dissatisfied with the impugned judgment and order dated 10.12.2019 passed by the High Court of Judicature at Allahabad in Second Appeal No. 330/2001, by which High Court has dismissed the second appeal and has confirmed the judgment and decree passed by the first appellate Court reversing the judgment and decree of dismissal of suit passed by trial Court, the original defendant has preferred present appeal.
Findings of Court:
Impugned judgment and order dated 10.12.2019 passed by the High Court dismissing Second Appeal No. 330/2001, confirming the judgment and decree passed by the first appellate Court and the judgment and decree dated 29.01.2001 passed by the first appellate Court decreeing suit for permanent injunction in favour of the original plaintiff and dismissing counter-claim of defendant are hereby quashed and set aside.
Result : Appeal allowed.
Key Points: - Unregistered agreement to sell dated 23.03.1996 on ten rupee stamp paper is not admissible in evidence; cannot support substantive relief like specific performance or permanent injunction based on it. (!) (!) - Although an unregistered document can be used for collateral purposes, it cannot be used to obtain substantive relief (e.g., specific performance) or a decree for permanent injunction in favor of the party relying on that document. (!) (!) - The plaintiff filed suit for permanent injunction only, aware that specific performance would not be granted due to unregistered document; the drafting constitutes an attempt to obtain relief indirectly that is not permissible. (!) (!) - The trial court dismissed the injunction and allowed the defendant’s counter-claim for possession based on unauthorised possession and failure to prove the agreement; the first appellate court decreed injunction against the defendant; the High Court affirmed; the Supreme Court set aside and dismissed the injunction, restoring the trial court’s position. (!) (!) (!) [8] - The judgment clarifies that "clever drafting" cannot circumvent the illegality of relying on an unregistered agreement to sell for substantive relief. (!)
JUDGMENT :
M.R. Shah, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 10.12.2019 passed by the High Court of Judicature at Allahabad in Second Appeal No. 330/2001, by which the High Court has dismissed the second appeal and has confirmed the judgment and decree passed by the first appellate Court reversing the judgment and decree of dismissal of suit passed by the learned trial Court, the original defendant has preferred the present appeal.
2. The facts leading to the present appeal in a nutshell are as under:
That the respondent herein – original plaintiff (hereinafter referred to as the ‘original plaintiff’) instituted Original Suit No. 696 of 1997 before the learned trial Court for permanent injunction only. The said suit was filed on the basis of an unregistered agreement to sell dated 23.03.1996. The original plaintiff sought permanent injunction restraining the defendant from disturbing her possession in the suit property.
2.1 In the said suit, the appellant herein – original defendant filed a counter-claim seeking the decree of possession.
2.2 The learned trial Court dismissed the suit filed by the original plaintiff and refused to grant permanent injunction and allowed the counter-claim of the defendant on the ground that original plaintiff could not prove the agreement to sell dated 23.03.1996 and that the original plaintiff is in unauthorised possession of the suit property since 08.07.1997. The learned trial Court also held that the original plaintiff could not prove the agreement to sell for a sale consideration of Rs. 14,000/- and also could not prove that she was put in possession of the suit property on 23.03.1996.
2.3 Feeling aggrieved and dissatisfied with the judgment and decree passed by the learned trial Court dismissing the suit of the original plaintiff and allowing the counter-claim of the defendant, the original plaintiff preferred an appeal before the first appellate Court. The learned first appellate Court allowed the said appeal and set aside the judgment and decree passed by the learned trial Court and consequently decreed the suit for permanent injunction against the defendant. The learned first appellate Court also dismissed the counter-claim of the defendant.
2.4 The judgment and decree passed by the first appellate Court has been confirmed by the High Court, by the impugned judgment and order passed in Second Appeal No. 330 of 2001.
2.5 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court in dismissing the second appeal and confirming the judgment and decree passed by the learned first appellate Court, decreeing the suit for permanent injunction and dismissing the counter-claim, the original defendant has preferred the present appeal.
3. Learned counsel appearing on behalf of the appellant – original defendant has vehemently submitted that the original plaintiff filed a suit for permanent injunction solely on the basis of the agreement to sell dated 23.03.1996, which, as such, was unregistered.
3.1 It is submitted that such an unregistered agreement to sell is not admissible in evidence. It is submitted that therefore both, the learned first appellate Court as well as the High Court have committed a grave error in passing a decree for permanent injunction and dismissing the counter-claim.
3.2 It is further submitted that both, the learned first appellate Court as well as the High Court have not properly appreciated the fact that the suit filed by the original plaintiff was only for permanent injunction and she by adopting a clever drafting did not seek the relief for specific performance of agreement to sell as she was well aware that she would not succeed in the suit for specific performance on the basis of an unregistered agreement to sell. It is submitted that when the original plaintiff cannot get the substantive relief of specific performance of the unregistered agreement to sell dated 23.03.1996, she would not be entitled
A suit solely seeking relief of permanent injunction based on an unregistered agreement for sale without seeking any relief for specific performance is not maintainable.
An unregistered agreement to sell cannot serve as a basis for injunctive relief against a true owner of property, reflecting the necessity of registration under relevant laws.
(1) Registration of document is not sine qua non for receiving the same as evidence of a contract in a suit for specific performance.(2) Plaintiff can very well make alternative prayer in a suit for ....
An unregistered Agreement for Sale can be admitted as evidence in a suit for specific performance, and appellate courts should respect trial court discretion unless shown to be arbitrary.
An oral agreement for the sale of immovable property is unenforceable without a written and registered agreement under the Registration Act and Specific Relief Act.
The court emphasized that an unregistered agreement to sell lacks sufficient evidentiary value for establishing possession, and interim injunctions require a clear prima facie case.
The party seeking an injunction must prove a prima facie case to go for trial, and if failed, the balance of convenience and irreparable loss are not material.
Unregistered agreements can be admissible in specific performance suits; timely legal action justified if one party attempts to alienate property.
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