JAMMU AND KASHMIR HIGH COURT
Rajnesh Oswal, J.
Ghulam Qadir Mir and Ors. – Petitioners
versus
UT of J&K and Ors. – Respondents
WP(C) No.1654 of 2023
Decided on 2.4.2024

IMPORTANT POINTS
(1) Agreement to sell does not confer any title or ownership qua immovable property in favour of a person.
(2) Agreement to sell does not confer any title or ownership qua immovable property in favour of a person.

Headnote:

(A) Agreement to Sell – Suit seeking ownership over property – Agreement to sell does not confer any title or ownership qua immovable property in favour of a person – On the basis of agreement to sell, remedy available to proposed vendee is to seek specific performance of contract but in no way suit for declaration as owner on the basis of agreement to sell can be filed – Once no right in immovable property was vested in petitioners pursuant to agreement to sell, same could not have formed basis for filing suit seeking ownership over suit property – At relevant point of time, Jammu and Kashmir Transfer of Property Act, 1977 was in vogue and in terms of Section 138 of the Act, unregistered agreement to sell could not have conferred any right, title or interest over beneficiary-vendee to agreement to sell.

Held: On the basis of an agreement to sell, the remedy available to the proposed vendee is to seek the specific performance of contract but in no way asuit for declaration as owner on the basis of an agreement to sell can be filed. Once no right in the immovable property was vested in the petitioners pursuant to the agreement to sell, the same could not have formed the basis for filing a suit seeking ownership over the suit property. More so, the agreement to sell was entered into between the parties to the suit in the year 2007. At the relevant point of time, the Jammu and Kashmir Transfer of Property Act was in vogue and in terms of Section 138 of the said Act, an unregistered agreement to sell could not have conferred any right, title or interest over the beneficiary-vendee to the agreement to sell. The defendants in the suit, in fact, admitted the claim of the petitioners with regard to agreement to sell and thereafter entered into another agreement styled as ‘compromise deed’ on 12.12.2020 by authenticating the agreement to sell and further agreeing that the petitioners shall be at liberty to get the property transferred in their own names. In the agreement to sell, the sale consideration has been shown as Rs.1,68,80,000/ in respect of land measuring 84 kanals and 08 marlas. Neither the agreement to sell nor the compromise entered into between the parties was registered, meaning thereby that without paying the stamp duty, both the documents were executed by the parties to the suit. The Hon’ble Supreme Court of India has deprecated the practice of entering into agreements without paying the stamp duty resulting in to loss to the state exchequer. It would be profitable to take note of the judgment of the Hon’ble Apex Court in Ripudaman Singh v. Tikka Maheshwar Chand, (2021) 7 SCC 446 and the relevant paras are extracted as under: 14. In respect of a question whether the decree requires registration or not, this Court in Bhoop Singh v. Ram Singh [Bhoop Singh v. Ram Singh, (1995) 5 SCC 709] held that decree or order including compromise decree creating new right, title or interest in praesenti in immovable property of value of Rs 100 or above is compulsory for registration. It was not the case of any pre-existing right but right that has been created by the decree alone. This Court explained both the situation, where a party has pre-existing right and where no such right exists. (Para 12)

(B) Legal Services Authority Act, 1987 – Section 20(4) – Registration Act, 1908 – Section 17 (1) – Jammu and Kashmir Migrant Immovable Property (Preservation, Protection and Restraint on Distress Sales) Act, 1997 – Section 3 – Agreement to sell – Suit seeking ownership over property – Award passed by Lok Adalat is not a compromise decree – Petitioners had no pre-existing rights which were settled by them through medium of compromise leading to passing of award by Lok Adalat – It was only through medium of agreement to sell and compromise that for first time rights were sought to be created by parties in immovable property in favour of petitioners – That apart, alienation of immovable property of migrant is not at all permissible without following mandate of the Act – Provisions of Act cannot be circumvented by getting award passed by Lok Adalat, which is only a deemed decree – Neither agreement to sell nor compromise entered into between parties was registered – Petitioners have agreed to get agreement/compromise registered and pay stamp duty and to follow mandate of Section 3 of Act – District Magistrate directed to enquire and examine as to whether property is covered under Jammu and Kashmir Migrant Immovable Property (Preservation, Protection and Restraint on Distress Sales) Act, 1997 and if same is covered under the Act, then petitioners shall follow mandate of Section 3 of the Act. (Paras 13, 14, 16 and 19)

Result: Writ petition disposed of with directions.