Deceitful Property Deals: Supreme Court Raises Concerns, Imposes Rs.10 Lakhs Cost On Dishonest Vendor & Second Purchaser

While dealing with a property title dispute, the Supreme Court recently imposed Rs.10 lakhs cost on a vendor who, after executing a sale deed with the vendee, conveyed the property to a subsequent purchaser while the first sale deed was pending registration. The liability to pay cost was directed to be borne by the vendor equally alongwith the subsequent purchaser.

"The respondent no.2 (vendor) appears to be a dishonest person. We are saying so for very strong reasons, which are apparent from his conduct not only during the trial but also acting in collusion with respondent no.1 to execute the sale deed for the same land which he had already transferred...Facts of this case deserves that the suit should be decreed with exemplary costs", said the bench comprising Justices Vikram Nath and Ahsanuddin Amanullah.

The Court imposed the exemplary cost taking into account the continued suffering of common man at the hands of vendors "who try to gain double-benefits, either by arm-twisting or through manipulation of the legal processes". 

It was noted that misery of a vendee-purchaser may be prolonged in such cases, but nobody should be allowed to benefit from their own wrong. Justice shall be seen to be done to the weak, the court emphasized.

"While adjudicating such cases, it is not just the lives and the properties of the people that we are dealing with, but also their trust in the legal system. In cases like the one before us, it is not for us to just mechanically analyse the contentious transactions but to also ensure that injustice is remedied and nobody is benefitted by their own wrongs. Justice knows no bias and thus, through its aid, even the weak may prevail over the strong".

Factual background

Respondent No.2 (vendor) executed a sale deed in favor of appellant No.1 and his minor brother (represented by their mother) in 1985. This deed could not be registered on account of deficiency in payment of stamp duty and the registration remained pending in the office of Sub-Registrar.

In 2010, respondent No.2 executed a Conveyance Deed in favor of respondent No.1 (subsequent purchaser) with regard to the same property. After learning about the same, the appellants followed up registration of the sale deed in their favor. The deed came to be registered in 2011. However, as respondent No.1 tried to interfere with the appellants' possession of the suit property, the latter filed a suit for cancellation of a sale deed in respondent No.1's favor and sought permanent injunction.

The Trial Court dismissed the suit in 2016, holding the sale deed in appellants' favor to be void, primarily for the reason that both of them were minors at the time of execution. In appeal, the District Judge set aside the Trial Court's judgment and decreed the suit. Respondent No.1 alone assailed this decision before the High Court. In 2022, the appeal was allowed and the suit dismissed. Aggrieved by the High Court's judgment, the appellant approached the Supreme Court.

Conclusion

The Court allowed the appellants' appeal and decreed the suit. Taking into consideration the respondents' conduct, it imposed an exemplary cost of Rs.10 lakhs on them.

Also from the judgment - Vendor Cannot Execute Second Sale Deed While First Sale Deed Executed Over Same Plot Is Pending Registration: Supreme Court

Case Title: KAUSHIK PREMKUMAR MISHRA & ANR. VERSUS KANJI RAVARIA @ KANJI & ANR., CIVIL APPEAL NO.1573 OF 2023

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