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2025 Supreme(All) 2873

IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD 
SHEKHAR KUMAR YADAV, J.
Vinod Kumar Jalaun - Appellant 
Versus
Kailash Jaiswal – Respondent
First Appeal No. 237 of 2006
Decided On : 07-08-2025


Advocates Appeared:
For the Appellant : Arvind Srivastava, Akhilanand Mishra, Anand Srivastava
For the Respondent: Rahul Sripat, Abhishek Mishra, Asheesh Mani Tripathi, Ashok Mani Tripathi, C.K. Parekh, D.V. Jaiswal, H.P. Dube, K.N. Mishra, Manish Goyal, Nipun Singh, Pankaj Dubey, Pramod Kumar Jain, Rakesh Pande, Raunak Parekh, Ravindra Kumar Tripathi, Satish Mandhyan.

The dishonor of a cheque linked to a sale deed renders the deed ineffective due to non-fulfillment of contractual conditions, thus affirming the owner’s continued possession and right to a prohibitory injunction.

Headnote:(A) Code of Civil Procedure, 1908 - Section 96 - Transfer of Property Act, 1882 - Sections 54 and 55 - Negotiable Instruments Act, 1881 - Section 138 - Dispute over property transfer and sale deed validity - The sale deed was deemed ineffective due to dishonor of cheque for consideration amount as per explicit clause therein - The plaintiff maintained ownership and continued possession against defendant’s claims - Permanent injunction granted against the defendant’s interference. (Paras 6, 12, 26, 54)

(B) Sale Deed - Terms and conditions - If the contractual conditions regarding payment are not met, the deed becomes void as per expressed stipulations therein - The efficacy of a sale deed depends on the payment being completed per the terms of the agreement - Conditions for binding sale agreements and consequences for breaches are outlined in various precedents such as Kaliaperumal v. Rajagopal. (Paras 23, 38)

(C) Permanent Injunction - Rights of continuous possession affirmed - The defendant’s claim of being ready to pay considered insincere, hence injunction granted aligns with plaintiff's rightful ownership and possession. (Paras 44, 54)

Table of Content
1. issues regarding the effectiveness of the sale deed based on payment. (Para 2)
2. sale deed challenged due to dishonor of cheque. (Para 6 , 7 , 8 , 9 , 10)
3. trial court's findings on possession and sale deed invalidation. (Para 12 , 13 , 14)
4. arguments for and against the validity of the sale deed. (Para 16 , 19 , 20)
5. contractual terms must be enforced as defined. (Para 22 , 23 , 24 , 25 , 26)
6. conditional sales and transfer of title depend on payment. (Para 28 , 29 , 30)
7. ratio regarding conditional sales and ownership transfer. (Para 34)
8. intent of parties and fulfilment of payment terms are crucial. (Para 36 , 37 , 38)
9. foundational principles of contract invalidate transaction. (Para 54 , 55)

JUDGMENT :

Shekhar Kumar Yadav, J.

1. Heard Sri Anil Tiwari, learned Senior Counsel for the defendant/Appellant, and Mr. Manish Goyal, learned Senior Counsel assisted by Mr. Nipun Singh, learned counsel for the plaintiff/Respondent at great at length.

2. This First Appeal under Section 96 of the Code of Civil Procedure has been filed by the appellant, Vinod Kumar Jalan (hereinafter “the defendant”), challenging the judgment and decree dated 07.03.2006 passed by the learned Civil Judge (Senior Division), Gorakhpur, in Original Suit No. 570 of 2004. By the impugned judgment, the trial court declared the sale deed dated 16.06.2003 to be ineffective and granted a permanent prohibitory injunction restraining the defendant from interfering with the plaintiff’s possession over the disputed property.

3. During the course of final hearing of the present appeal, learned counsel for the defendant/appellant has filed one application under Order 41 Rule 27 of CPC seeking some additional documents to be brought on record, which according to the appellant were necessary for the adjudication of the present controversy, upon which the matter was adjourned by giving opportunity to plaintiff/respondent to file any affidavit, if required. On which learned counsel for the plaintiff/respondent submitted that he had already filed reply to one of the application filed under Order 41, Rule 27 of CPC and same may be read as reply to the said application.

4. During argument, this Court was further informed that another application under Order 41 Rule 27 of CPC had also been filed by the defendant/appellant, also bringing on record certain documents for the adjudication of the controversy involved in the present matter, to which, a detailed counter affidavit had already been filed by the plaintiff/respondent, but record reflects that no rejoinder to the said counter was filed even despite giving various opportunities. This Court finds that another application under Order 41 Rule 27 of CPC has also been filed by the plaintiff/respondent for bringing on record the gift deed dated 01.06.2011, which was executed during the pendency of the present appeal by the sole defendant in favour of his son.

5. This Court would deal the merits of the applications under Order 41 Rule 27 of CPC filed by the defendant/appellant at the end of this judgment.

FACTS OF THE CASE

6. The Plaintiff, Kailash Jaiswal, admittedly, was the owner and in possession of Plot No. 125 area 1084.39 sq. meters land situated at Mauja Araji Chhavani, Tappa-Qasba Pargana Haveli, Tehsil and District Gorakhpur, instituted Original Suit No. 570 of 2004 for a declaration that the sale deed executed by him in favour of the Defendant on 16.06.2003 for a property situated in Gorakhpur be declared as null, void, and ineffective, and for a permanent injunction.

7. The Plaintiff’s case was that the property was agreed to be sold for Rs. 46,00,000/-. Out of this, Rs. 1,00,000/- was paid in cash, and for the balance of Rs. 45,00,000/-, a post-dated cheque (No. SPI MC BJ A.B. 797760 dated 30.09.2003, drawn on Oriental Bank of Commerce, Gorakhpur) was issued by the Defendant. A crucial condition was incorporated in the sale deed that if the said cheque was dishonoured for any reason, the sale deed w

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