Deal Struck, But Law Blocks the Sale: Himachal HC Sides with Buyer on Refund

In a nuanced ruling, the High Court of Himachal Pradesh at Shimla overturned a trial court's dismissal of a suit, holding that while an agreement to sell land was validly executed, it couldn't be enforced due to a statutory ban. Justice Sushil Kukreja delivered the verdict in Kaushalya Devi vs Suini (deceased through LRs) (RFA No. 234 of 2013) on March 31, 2026, ordering the respondents to refund Rs 8 lakh earnest money plus 6% interest. This decision highlights the tension between proven contracts and overriding land reform protections.

Roots of the Rural Land Rift

The dispute centered on 5-13 bighas of land in Mauza Mangoti, Tehsil Kasauli, District Solan—Kaushalya Devi's (appellant/plaintiff) claimed prize from an agreement dated July 17, 2008. Defendant Suini, a 75-year-old illiterate villager and owner of a 1/5th share (total 28-6 bighas), allegedly agreed to sell for Rs 11 lakh, pocketing Rs 8 lakh as advance. Kaushalya claimed Suini executed a registered general power of attorney four days later, promising no revocation, but later backed out.

Kaushalya sued for specific performance or, alternatively, earnest money recovery with injunction. The trial court (District Judge, Solan) dismissed it on January 2, 2013, deeming the agreement forged. Kaushalya appealed under Section 96 CPC, admitted April 2, 2013. Represented by Senior Advocate Anand Sharma with Karan Sharma, she prevailed; respondents' counsels Mohammad Aamir and Neeraj Sharma (vice Vipin Bhatia) defended the original decree.

A 2004-2005 jamabandi confirmed Suini's proprietary rights, granted under the H.P. Tenancy and Land Reforms Act in December 2006—with a crucial 10-year no-transfer note till 2016.

Forgery Claims vs Witness Backing: The evidentiary showdown

Kaushalya's husband (PW-1, via PoA) and witness Shyam Sunder (PW-5) testified to the agreement's execution, with contents explained to Suini in Prem Singh's (her son) presence. The document bore Suini's admitted signatures, plus those of witnesses including Prem Singh. Document writer Devender Kumar Sharma (PW-2), Sub-Registrar Yogender Kumar (PW-3), and clerk Deepak Kumar (PW-4) confirmed the PoA's preparation, explanation, and registration on July 21, 2008, complete with photos and fingerprints.

Suini (DW-1) admitted signatures but alleged fraud by Kaushalya's group and son Prem Singh, claiming papers were signed under PoA pretext. Sons Bhag Singh (DW-2) and witness Prem Dutt (DW-3) backed her, alleging later fabrication. But the court found their testimonies unreliable, noting no proof of undue influence and Suini's own purchase of the stamp paper.

Statutory Shield Trumps Proven Deal

The court meticulously proved the agreement and PoA genuine, invoking presumptions for registered documents ( Prem Singh v. Birbal , 2006 (5) SCC 353) and proof standards under Evidence Act Section 68 ( Rattan Singh v. Nirmal Gill , 2021 (15) SCC 300). PoA validity drew from State of Rajasthan v. Basant Nahata (2005 (12) SCC 77) and registration process insights ( Asset Reconstruction Co. v. S.P. Velayutham , 2022 (8) SCC 210).

Yet, specific performance failed. Jamabandi Ex. PW-1/B showed proprietary rights conferred in 2006, triggering Section 113's 10-year bar on transfers: "No land... shall be transferred by sale... during a period of ten years... Any transfer... in contravention... shall be void." Executed in 2008—two years into the ban—the agreement was "forbidden by law," unenforceable despite proof.

Key Observations

"From the perusal of the entire evidence on record it has been duly proved that defendant had executed agreement to sell on 17.07.2008... out of which a sum of Rs.8,00,000/- was received by her as earnest money."

"The power of attorney in the case at hand is duly registered, therefore, one is guided by the settled legal principle that a document is presumed to be genuine if the same is registered."

"Copy of jamabandi, Ex. PW-1/B, demonstrates that proprietary rights... were conferred upon the defendant... the suit land cannot be alienated for a period of 10 (ten) years upt o 2016... said agreement... being forbidden by law cannot be said to be capable of being specifically enforced."

Refund Ordered: Justice Without the Land

The appeal succeeded—the trial decree set aside. Kaushalya gets Rs 8,00,000 plus 6% interest from suit filing till realization. No injunction or sale deed.

This reinforces land reform safeguards, protecting vulnerable owners from premature deals while offering buyers earnest money recourse. Future contracts during such bans risk unenforceability, urging caution in Himachal's rural property deals. As external reports note, it underscores that "even though the agreement to sell was duly executed and proved, it could not be specifically enforced as it violated a statutory prohibition."