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2026 Supreme(Mad) 703

IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.SOUNTHAR, J.
A.L. Geetha Narayanan – Appellant
Versus
S. Sriraman – Respondent
A.S. No. 1091 of 2004
Decided On : 07-01-2026

Advocates Appeared:
For the Appellants : S. Parthasarathy, P. Dinesh Kumar
For the Respondent: M. Kamalanathan

A Sale Agreement does not constitute property interest until a Sale Deed is executed; hence, it is not void due to alleged statutory prohibitions against alienation.

Headnote:(A) Civil Procedure Code - Section 96 - Specific Relief Act, 1963 - Suit for specific performance - The agreement of sale was executed between the allottee of the property and the plaintiff, who scrupulously performed his obligations under the agreement - The defendants claimed the sale agreement was void due to prohibition under Lease-cum-Sale agreement, but the court found no statutory prohibition - The suitability of the Sale Agreement was affirmed as enforceable and the trial court’s decree was upheld. (Paras 10-20)

(B) Legal Capacity to Contract - The agreement to sell does not constitute an interest in the property until a sale deed is executed - Therefore, entering into a Sale Agreement does not violate any prohibition on alienation. (Paras 12-14)

Facts of the case:
The dispute arose from a suit for specific performance concerning a Sale Agreement executed in 1983, wherein the plaintiff claimed that he had paid the required sale consideration, but the defendants failed to execute the Sale Deed in his favor, alleging the agreement was not valid.

Findings of Court:
The court concluded that the sale agreement was valid and the plaintiff had become entitled to specific performance as he had duly performed his obligations under the agreement.

Issues: Whether the Sale Agreement is valid and enforceable, and whether the plaintiff is entitled to specific performance?

Ratio Decidendi: The court ruled that merely entering into an agreement of sale does not violate prohibitions as it does not equate to a transfer of property rights; hence the Sale Agreement was enforceable despite the defendants' claims.

Result: The appeal was dismissed and the decree for specific performance was confirmed.

Table of Content
1. specific performance of contract. (Para 1 , 2 , 3 , 4 , 5)
2. arguments regarding validity of agreement. (Para 8 , 9)
3. court's reasoning on contract enforceability. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19)
4. evaluation of agreement genuineness. (Para 20 , 21 , 22 , 23 , 24)
5. dismissal of first appeal. (Para 25)

JUDGMENT

The unsuccessful defendants 4 and 5 are the appellants herein. The

1st respondent herein filed a suit for specific performance of the agreement of sale dated 23.06.1983 with alternative prayer for recovery of damages. The said suit was decreed by granting primary relief of specific performance. Aggrieved by the same, the defendants 4 and 5 have come before this Court.

Plaint Averments:-

2. According to the 1st respondent/plaintiff, the suit Flat was allotted to the 1st defendant by the Tamil Nadu Housing Board. The defendants 2 and 3 are the wife and son of 1st defendant. The appellants/defendants 4 and 5 are the daughter and son-in-law of the 1st defendant. It was stated by the plaintiff that the 1st defendant represented to him that the suit Flat was allotted to him by Tamil Nadu Housing Board and he had made a total payment of Rs.32,461/- towards portion of the sale consideration and remaining amount had to be paid in monthly instalments at the rate of Rs.923/- for the next 7 years. It was further stated that the 1st defendant agreed to execute a Sale Agreement in favour of plaintiff on an understanding that the entire amount paid by the 1st defendant to Housing Board shall be repaid by the plaintiff to

1st defendant at once and balance amount shall be paid by way of monthly installments by the plaintiff to the Housing Board directly and after payment of all instalments, the Housing Board would execute a Sale Deed in favour of the 1st defendant and thereafter, the 1st defendant should execute a Sale Deed in favour of the plaintiff. Since the plaintiff agreed for the said course, a Sale Agreement was entered into between the plaintiff and defendants 1 to 3 on 23.06.1983.

3. It was also stated that the 1st defendant was the allottee of the Housing Board and the property should be treated as his self-acquired property. However, by way of abandon caution, the defendants 2 and 3 were added as signatories in the Sale Agreement. As per the terms of the Sale Agreement, the plaintiff paid a total sum of Rs.32,461/- to the 1st defendant by way of cheque, dated 23.06.1983. He also paid the entire balance sale consideration by way of monthly instalments at the rate of Rs.923/- for the next 7 years. It was also stated that on the date of agreement itself, the 1st defendant executed an irrevocable General Power of Attorney in favour of the plaintiff and put him in possession of the property. Though the plaintiff had completed payment of entire amount due to the Board by June-1992, the 1st defendant failed to execute the Sale Deed in favour of the plaintiff. In the meantime, the 4th defendant/daughter of 1st defendant sent a communication to Canara Bank, a tenant inducted by the plaintiff in the suit property claiming right over the same. Then only, the plaintiff acquired knowledge about the Sale Deed executed by Housing Board in favour of 1st defendant and the subsequent Settlement Deed executed by 1st defendant in favour of 4th defendant, his daughter. Since the defendants failed to act as per the terms of Sale Agreement, the plaintiff was constrained to file a suit for Specific Performance of the Agreement. Alternatively, the plaintiff also sought for recovery of the amount paid by him and also the amount spent by him by way of various amenities to the suit property.

4. The defendants 1 to 3 remained exparte. Pending suit, the defendants 1 and 2 also died. The defendants 3 and 4 are their legal representatives, already on record. The defendants 4 and 5 alone filed written statement and resisted the suit. According to them, the Suit Sale Agreement was not a legally enforceable one as the same wa

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