An agreement of sale does not create title to immovable property. Specific performance cannot be enforced against an agreement holder who lacks legal ownership. However, where performance is impossible, courts may grant the alternative relief of refunding the advance payment along with interest to the aggrieved party.

SUBMITTED FOR APPROVAL:

1. Whether Reporters of Local newspapers may be allowed to see the Judgment ? : Yes/No

2. Whether the copies of judgment may be marked to Law Reports/Journals : Yes/No

3. Whether Their Lordship/Ladyship wish to see the fair copy of judgment : Yes/No

APPEAL SUIT. No. 128 of 2014

JUDGMENT: (Per Hon’ble Sri Justice Vakiti Ramakrishna Reddy)

1. This Appeal Suit is filed by the appellant/plaintiff against the Judgment and Decree dated 25.07.2012 in O.S. No. 8 of 2008 on the file of I Additional District Judge, Khammam, wherein the suit filed by the plaintiff against the defendant for specific performance was dismissed.

2. For the sake of convenience the parties will be referred as per their status before the trial Court.

I. BRIEF FACTS:

3. The sole plaintiff instituted O.S. No. 8 of 2008 against the sole defendant seeking Specific Performance of an Agreement of Sale in respect of agricultural land admeasuring Ac.2-08 guntas in Sy.No.9 of Raghunadhapalem Village, Khammam Urban Mandal, Khammam District (hereinafter referred to as “the suit schedule property”). It is the case of the plaintiff that the defendant, having purchased the suit schedule property through a ‘sada-binama’ (unregistered agreement) from the original owners namely one Katragadda Sreeramulu and Nelapatla Jagannadham, subsequently offered to sell the same to the plaintiff at the rate of ₹7,65,000/- per acre. Accordingly, an agreement of sale was executed by the defendant on 11.02.2005 in favour of the plaintiff and the plaintiff had paid an amount of Rs.4,00,000/- on the date of execution of the Agreement of Sale to the defendant towards advance sale consideration. The plaintiff also paid a further sum of Rs.20,000/- to the defendant on 13.02.2005 which was endorsed on the back side of the agreement and that the plaintiff agreed to pay the balance consideration of Rs.12,63,000/- on or before 1st October 2005, subject to condition that the defendant obtains NOC, carries out measurement of the suit land, apart from obtaining a registered sale deed from the original owners. Despite the plaintiff’s readiness and repeated demands, including a panchayat held in December, 2007 and also sending a telegraphic notice dated 10.02.2008, the defendant failed to perform his part of the contract, compelling the plaintiff to institute the above suit seeking specific performance or in the alternative, for refund of Rs.4,20,000/- with interest at the rate of 24% per annum.

4. In reply to the plaint averments, the defendant filed his written statement inter-alia mainly contending that the document of Agreement of Sale dated 11.02.2005 is not admissible in law apart from being barred by time. It was further contended that the Agreement of sale itself speaks that the suit property was not transferred or conveyed fully in favour of the defendant and as such no person can transfer a better title than what he possesses and when the defendant himself is not the owner, question of selling the property to the plaintiff does not arise.

II. ISSUES FRAMED BY THE TRIAL COURT:

5. Basing on the above pleadings, the trial Court framed the following issues for trial:

1. Whether the agreement of sale dated 11.02.