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2026 Supreme(Online)(Ker) 37165

IN THE HIGH COURT OF KERALA AT ERNAKULAM
Murali Purushothaman, J
K.S. Girijamma – Appellant
Versus
Vikraman – Respondent
RFA NO. 540 OF 2006

Advocates:
For the Appellants/Petitioners: M. Narendra Kumar, M.P. Madhavankutty
For the Respondents: Jacob P. Alex

A sale deed registered by incorporating non-existent property to circumvent the correct jurisdiction, combined with transfers to minors for no consideration to defeat prior agreements, constitutes a sham transaction that does not bind a plaintiff in a suit for specific performance.

Headnote:(A) Specific Relief Act, 1963 - Section 16(c) - Suit for specific performance - Readiness and willingness - Whether sufficient pleadings were established - Held, plaintiffs who have paid a substantial portion of the sale consideration and specifically averred in the plaint regarding their readiness and willingness to perform their part, satisfy the requirement of the provision, especially when the defendant admits the signature on the agreement but denies the underlying transaction. (Paragraph 25)

(B) Sham Transaction - Registration Fraud - Sale deed executed in favor of minors for a non-existent property to secure registration in a different sub-registrar office - Held, such registration constitutes a fraud on the law of registration and the document is sham. (Paragraph 13, 23)

Facts of the case:
The Plaintiff sought specific performance of a sale agreement executed by the 1st defendant. The 1st defendant disputed the agreement, claiming it was a loan transaction and that he had subsequently transferred the property to his minor children (defendants 3 and 4) via a sale deed. The plaintiff challenged this transfer as a sham transaction designed to defeat the agreement of sale.

Findings of Court:
The trial court and the High Court found that the sale deed in favor of the minors was a sham document executed without consideration and through fraudulent registration practices. The defendants failed to substantiate their claims of a loan transaction, and the plaintiff was found to be ready and willing to perform the contract.

Issues: The main issues were the authenticity and enforceability of the sale agreement, the validity of the subsequent sale deed in favor of minors, and whether the plaintiff satisfied the readiness and willingness requirement under Section 16(c) of the Specific Relief Act.

Ratio Decidendi: A transaction designed to defeat a prior contract by transferring property to minors without consideration and through fraudulent registration is void as a sham transaction. Furthermore, when a substantial portion of the price is paid, and the plaint contains specific averment of readiness and willingness, the requirements of Section 16(c) are met.

Result: Appeal dismissed.

Table of Content
1. plaintiff seeks specific performance of a contract and declaration that a subsequent sale deed is sham. (Para 2 , 3 , 4 , 5 , 6)
2. trial court found the sale agreement authentic and the subsequent transfer to minors a sham transaction. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15)
3. appellant challenges evidentiary proof of contract and compliance with section 16(c). (Para 20 , 21)
4. registration of a document using non-existent property to change jurisdiction is a fraud on registration. (Para 22 , 23)
5. specific performance requirements satisfied by evidence of readiness and willingness and payment of substantial consideration. (Para 24 , 25)
6. court upholds trial court's discretion; appeal dismissed. (Para 26 , 27 , 28 , 29)

J U D G M E N T

This appeal is preferred against the judgment and decree dated 07.12.2005 in O.S. No. 21 of 1999 on the files of the Court of the Subordinate Judge, Pathanamthitta.

2. The appellants are the defendants 2 to 4 in the suit. The 1st respondent herein is the plaintiff. The 2nd respondent is the 1st defendant. The parties in this appeal will be referred to as described in the suit unless otherwise specifically mentioned.

3. The suit was filed for specific performance of contract and declaration.

4. According to the plaintiff, the plaint schedule property was obtained by the 1st defendant under Ext. A5 Sale Deed No. 1190/96 dated 22.05.1996 of the SRO, Ranni. On 21.04.1997, the 1st defendant executed Ext. A1 agreement for sale in favour of the plaintiff whereby he agreed to sell the plaint schedule property for a total consideration of Rs. 4,50,000/- within one year from the date of the agreement. The 1st defendant received an amount of Rs.4,00,000/- as advance sale consideration from the plaintiff. The 1st defendant agreed to vacate the tenants from the building situated in the plaint schedule property before the execution of the sale deed. However, the 1st defendant did not evict the tenants as agreed and at his request, the period of agreement was initially extended for a period of three months from 21.04.1998 and later, for a period of seven months from 21.07.1998. Despite these, the 1st defendant failed to perform his part of the contract. Consequently, the plaintiff issued Ext.A2 legal notice dated 05.01.1999 demanding the 1st defendant to execute the sale deed. The plaintiff was always ready and willing to perform his part of the agreement. However, the 1st defendant failed to perform his part of the contract. Therefore, the 1st defendant is liable to specifically perform the contract.

5. The plaint was amended as per order dated 04.02.2004 in I.A. No. 1062 of 2001, and additional defendants 2 to 4 were impleaded by a separate order of the same date in I.A. No. 1059 of 2001. The additional 2nd defendant is the wife of the 1st defendant, and additional defendants 3 and 4 are their minor children, represented by the additional 2nd defendant.

6. In the amended plaint, it is contended by the plaintiff that the 1st defendant executed a Sale Deed (Ext.A9) dated 17.03.1997, registered at the SRO, Kozhencherry, purportedly conveying the suit property to his minor children, the additional defendants 3 and 4. The sale deed is a sham document to defeat Ext.A1 sale agreement. Ext.A9 is not supported by sale consideration and the 1st defendant continues to be in possession of the suit property. It is also contended that Ext.A9 sale deed is a fraud upon the law of registration. The plaint schedule property is situated within the jurisdiction of SRO, Ranni. In order to conceal the sale deed, the 1st defendant fraudulently incorporated a fictitious property as Schedule No.II in the sale deed and got it registered at the SRO, Kozhencherry. It is contended that the sale deed has no legal validity, does not bind the plaintiff, has no bearing on the enforceability of Ext. A1 sale agreement, and is void ab initio. The plaintiff sought for a decree for specific performance of Ext. A1 sale agreeme

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2026 Supreme(Online)(Ker) 37165

IN THE HIGH COURT OF KERALA AT ERNAKULAMMurali Purushothaman, JK.S. Girijamma – AppellantVersusVikraman – RespondentRFA NO. 540 OF 2006

A sale deed registered by incorporating non-existent property to circumvent the correct jurisdiction, combined with transfers to minors for no consideration to defeat prior agreements, constitutes a sham transaction that does not bind a plaintiff in a suit for specific performance.

Cases Referred (2)

IN THE HIGH COURT OF KERALA AT ERNAKULAM
Murali Purushothaman, J
K.S. Girijamma – Appellant
Versus
Vikraman – Respondent
RFA NO. 540 OF 2006