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2013 Supreme(Online)(KER) 41818

HIGH COURT OF KERALA
S.S.SATHEESACHANDRAN, J
LAKSHMI – Appellant
Versus
P.K.KRISHNAN – Respondent
AS 272 2001



Advocates:
SMT.AYSHA YOUSEFF, SRI.N.ASHOK KUMAR, SRI.MATHEW JOHN (K), SRI.BABY THOMAS, SRI.PRAMOD KOCHUTHOMMEN

An agreement of sale does not itself convey ownership; therefore, a suit for declaration based on it is not maintainable.

Headnote:

Real Estate - Property Law - Specific Performance and Declaratory Relief - Sections on Agreement of Sale and Transfer of Property - The court interpreted that an agreement of sale does not grant ownership and a suit for declaration based solely on an agreement lacks legal foundation.

Fact of the Case:

The plaintiffs claimed that a sale deed executed by the first defendant in favor of the second defendant was fraudulent, seeking a declaration, specific performance, and injunction. The trial court dismissed their suit.

Issues: Whether the dismissal of the plaintiffs' suit, which sought a declaration regarding the validity of a sale deed based on an agreement of sale, warrants interference.

Ratio Decidendi: An agreement of sale merely creates a right to obtain a sale deed and does not confer property rights; therefore, the plaintiffs could not seek a declaration against a subsequent sale deed.

Final Decision: The appeal was dismissed as lacking merit.

Judgement Key Points

The provided legal document does not explicitly state that a suit for injunction cannot be filed under an agreement to sell. Instead, it emphasizes that an agreement of sale itself does not convey ownership rights and that a suit for declaration based solely on such an agreement is not maintainable. The focus is on the nature of the agreement and the appropriate remedies, such as specific performance or declarations regarding the validity of subsequent sale deeds.

Specifically, the judgment clarifies that a suit for declaration that a subsequent sale deed is not binding is not permissible solely on the basis of an agreement of sale. The court discusses that the proper remedy for enforcing an agreement of sale is a suit for specific performance, not a declaration. It also notes that a suit for declaration does not require the defendant to prove that they are a bonafide transferee, which is relevant in the context of injunctions and other reliefs.

However, the judgment does not explicitly bar the filing of a suit for injunction under an agreement to sell. It primarily addresses the nature of the rights created by such agreements and the appropriate legal actions. Therefore, based on this document, it cannot be concluded that filing a suit for injunction under an agreement to sell is prohibited.


JUDGMENT

Appellants are the additional plaintiffs in O.S. 1082/1993 on the file of Additional Sub Judge, Kottayam.

2. Suit was filed by the predecessor of the appellants for a declaration that Ext.A3 sale deed executed by the first defendant in favour of the second defendant is not binding to him, and that it does not affect his right to get a sale deed executed over the plaint property in his favour in terms of Ext.A1 agreement of sale. With the declaratory relief as aforesaid plaintiffs canvassed for a decree directing the first defendant to execute the sale deed in his A.S.272/2001 2 favour receiving the balance sale consideration under Ext.A3 agreement. A decree for perpetual prohibitory injunction was also sought for against the defendants from committing trespass and waste in the plaint property. While the suit was pending plaintiff passed away, and his wife and children, (appellants) were impleaded as additional plaintiffs. Suit was resisted by the two defendants, both of them filing separate written statements. After trial, learned Sub Judge dismissed the suit. Aggrieved by the judgment plaintiffs have preferred this appeal.

3. Case of the plaintiff in short is that Ext.A1 agreement was entered by first defendant for sale of plaint schedule property in his favour and an amount of Rs.10,000/- was paid as part of the sale price. Plaintiff was ready and willing to perform his part of the contract, but, there was default on the part of first defendant. A notice was issued to the defendant to execute the sale A.S.272/2001 3 deed in terms of the agreement, but, that was not responded. Later plaintiff realised that first defendant had executed a sale deed in favour of the second defendant. That deed is a sham document and it has been created to defeat the interest of plaintiff under Ext.A1 agreement and it is not binding on him, was his case to seek the declaration, specific performance, injunction etc as indicated above. First defendant in his written statement admitting Ext.A1 agreement of sale with plaintiff contended that he was always ready and willing to execute the sale deed. Sale deed was later executed in favour of second defendant not with the intention to sell the property but on account of fraud and misrepresentation practised by that defendant with whom he had some money transaction, was his case. Second defendant had collected from him blank stamp papers, cheques etc towards security for a loan availed, according to this defendant. Second defendant resisting the A.S.272/2001 4 suit claim disputed the agreement of sale between plaintiff and first defendant and contended that receiving valuable consideration the property had been sold by first defendant in his favour. After the sale when he continued in possession and enjoyment of the property and then there was an attempt by first defendant to trespass upon the property and he resisted it filing a suit, contends the second defendant. At that stage in collusion with plaintiff the suit has been filed seeking the relief of declaration, specific performance etc, according to this defendant.

4. On the pleadings of parties, learned Sub Judge raised issues over the entitlement of plaintiff to get the declaration and enforcing of specific performance of Ext.A1 agreement, and also injunction. On the side of the plaintiff two witnesses were examined as PW1 and PW2 and A1 to A3 were exhibited. On the side of the defendants two witnesses were examined as DW1 and DW2 and B1 to B7 A.S.272/2001 5 were exhibited. Learned Sub Judge after appreciating the pleadings and evidence in the case coming to the conclusion that plaintiff has not established his case that Ext.A3 sale deed executed by first defendant in favour of the second defendant is vitiated, dismissed the suit directing the parties to suffer their costs. Challenge is against that decree of dismissal by the additional plaintiffs, who are the legal heirs of the plaintiff in the suit.

5. I heard the counsel for the appellants.

S

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