Advocates:
Advocate Appeared:
For the Appellant : Asmita Singh
For the Respondents: Abraham Mathews, S. Shivaprasad, Nishe Rajen Shonker

Case Summary

The Supreme Court allowed the appeal filed by a public charitable trust against the dismissal of its application under Order VII Rules 11(a) and (d) of the Code of Civil Procedure, 1908, for rejection of the plaint in a suit for permanent injunction filed by the respondents. (!) (!) (!) The trust had been in continuous possession of the suit property since 1905, initially under lease and later by formal conveyance. (!) The respondents claimed rights based solely on an unregistered agreement to sell dated 10.04.2018, alleging payment of Rs. 75 lakhs in cash as advance, and sought to restrain the trust from alienating the property. (!)

Key Legal Principles Applied

An agreement to sell does not create any interest in or charge on immovable property, as it merely evidences a promise to execute a sale deed upon fulfillment of terms. (!) (!) (!) (!) (!) Consequently, agreement holders lack locus standi to maintain a suit for injunction against a third party in settled possession, particularly where title is disputed and no declaratory relief is sought. (!) (!) (!) (!) (!) A plaint must disclose a real cause of action—a bundle of material facts supporting a legal right enforceable against the defendant—failing which it warrants rejection at the threshold to prevent abuse of process. (!) (!) (!) (!) (!) (!) Where title is under a cloud, a suit for bare injunction is not maintainable without a prayer for declaration. (!) (!) (!)

The court scrutinized the plaint averments alongside relied-upon documents, finding no privity of contract between parties, no personal interest in the respondents, and the suit barred by law. (!) (!) (!) (!) (!) (!) Respondents' rights, if any, lie only against their vendors via specific performance; protection under part performance (Section 53A, Transfer of Property Act, 1882) is unavailable against third parties without possession or fulfillment of conditions. (!) (!) (!)

Defects in the Plaint

• No enforceable right against the appellant due to absence of registered conveyance. (!) (!)
• Vendors not impleaded, rendering suit champertous and lacking support. (!) (!)
• Title dispute unresolved without declaration; settled possession with appellant since over a century. (!) (!)
• Property identity unclear, with admitted appellant's possession. (!)
• Cash payment of Rs. 75 lakhs raises suspicion under tax laws, undisclosed source. (!) (!)

The trial court and High Court erred in requiring trial on mixed questions, overlooking statutory bars and fictitious cause of action. (!) (!) (!)

Directions on Cash Transactions

Courts must notify jurisdictional Income Tax authorities of suits claiming cash payments of Rs. 2,00,000 or above toward any transaction, for verification under Sections 269ST and 271DA, Income Tax Act. (!) (!) Similar intimation required from Sub-Registrars on registration documents; non-compliance invites disciplinary action. (!) (!) These measures promote a digital economy and curb black money. (!) (!)

Outcome

Impugned orders set aside; plaint rejected. Directions circulated for compliance; parties to bear costs. (!) (!) (!) (!) Respondents cautioned against frivolous litigation. (!)