Jharkhand High Court Rejects Intervenor's Plea To Join Property Dispute, Reiterates Agreement To Sell Confers Only Preferential Right, Not Ownership Title
In a recent ruling, the Jharkhand High Court has reiterated that an agreement to sell does not confer any titles or ownership rights in a property, rather, it only confers preferential rights to the person in the favor of whom the agreement is executed.
Justice Subhash Chand, presiding over the case, emphasized, “it is the settled law that agreement to sell does not confer any title, it confers only preferential right to the person in whose favour agreement to sell has been executed.”
The above ruling came in a civil miscellaneous petition preferred on behalf of the petitioner against the order of the trail court whereby the court allowed an application under Order 1, Rule 10 (2) read with Section 151 of the Code of Civil Procedure, 1908 filed on behalf of the intervenor.
As per the factual matrix of the case, the dispute began when a title suit was instituted in the year 2017 on behalf of the 58 year old petitioner - Sondipon Das against 7 defendants with the prayer to declare the rights, titles, and interests of the disputed property. During the pendency of the suit, five out of seven defendants were deleted in compliance of two separate orders passed by the Court. Subsequently, a compromise was reached between the plaintiff and these defendants during mediation proceedings before the mediator in Mediation Centre, Civil Court, Ranchi.
The intervenor, Pramod Kumar Soni, filed an application under Order 1, Rule 10(2) of the CPC, alleging that the plaintiff had executed an agreement to sell and a power of attorney in his favor regarding the disputed property. Soni claimed that despite paying an advance of ₹7 lakhs, the plaintiff did not execute the sale deed and transferred the property to another party. He sought to be impleaded in the title suit, asserting his interest in the property.
The impleadment application was opposed by both - the plaintiff as well as the contesting defendants. It was contended that the agreement to sell didn't confer title and the power of attorney was revoked. Additionally, they contended that the intervenor's claims should be pursued through a separate suit for specific performance.
In its ruling, the High Court cited the Apex Court's decision in the case of Ram Baran Prasad vs. Ram Mohit Hazra & Ors. reported in AIR 1967 Supreme Court 744, whereby it was held that mere agreement for sale does not create right in the property in view of Section 54 read with Section 40 of Transfer of Property Act.
The Court also referred to Apex Court's judgement in the case of Rambhau Namdeo Gajre vs. Narayan Bapuji Dhotra reported in (2004) 8 SCC 614 which reiterated that the agreement to sell does not create an interest of the proposed vendee in the suit property.
The Court observed, “Herein the only interest or right of the intervenor Pramod Kumar Soni in regard to the property suit were only of the preferential right in regard to the property in question to get the sale deed executed in his favour. For the same, the remedy which was available to Pramod Kumar Soni was to file the suit for the specific performance of the sale deed before the competent Court and learned counsel for the intervenor herein opposite party no. 3 has submitted that the very suit for specific performance of agreement to sell has been instituted on behalf of Pramod Kumar Soni against the plaintiff Sondipon Das. As such in the very Title Suit No. 173 of 2017, intervenor Pramod Kumar Soni was neither the necessary party, nor the proper party.”
The Court further said that the Trial Court by allowing this very application committed a legal error and, “it was incumbent upon the Trial Court to decide the suit itself in which the compromise had already arrived before the mediator in Mediation Centre of Ranchi. Therefore the impugned order passed by the learned Court below is based on perverse finding and needs interference.”
Accordingly the civil miscellaneous petition was allowed. The Court set aside the impugned order passed by the trial court and directed it to dispose of the title suit in view of the compromise which has been already filed on behalf of the parties.
Case Title: Sondipon Das vs Dr. Diwesh Kumar Bhagat and Ors
LL Citation: 2024 LiveLaw (Jha) 194