Unregistered Sale Agreement May Be Received As Evidence Of Contract In Suit For Specific Performance: Madras High Court

The court relied on the decision of the Supreme Court in Ameer Minhaj v. Dierdre Elizabeth(Wright) Issar and Others (2018) wherein it was observed that a document is required to be registered, but if unregistered, can still be admitted as evidence of a contract in a suit for specific performance.

"…….the document though exhibited, will bear an endorsement that it is admissible only as evidence of the agreement to sell under the proviso to Section 49 of the 1908 Act and shall not have any effect for the purposes of Section 53A of the 1882 Act. In that, it is received as evidence of a contract in a suit for specific performance and nothing more. The genuineness, validity and binding nature of the document or the fact that it is hit by the provisions of the 1882 Act or the 1899 Act, as the case may be, will have to be adjudicated at the appropriate stage as noted by the Trial Court after the parties adduce oral and documentary evidence"

The court was considering a second appeal filed for setting aside the order of the lower appellate court granting specific performance and permanent injunction in favor of the original plaintiff. Finding no grounds to interfere with the judgment and decree of the lower appellate court, the High Court had dismissed the second appeal.

Background

The case of the plaintiff was the the suit properties were owned by the defendants 2 to 5 who appointed defendant 1 as their Power of Attorney. The first defendant, acting as an agent entered into an agreement of sale with the plaintiff for a total sale consideration of Rs. 50,000/- of which Rs. 40,000/- was paid as advance on the date of agreement. The balance sale consideration of Rs.10,000/- was to be paid within three years.

The plaintiffs submitted that he was ready and willing to perform his part of the contract but the first defendant was deliberately trying to evade the execution of the sale deed in favour of the plaintiff and later informed the plaintiff that the defendants had cancelled the power of attorney document. Meanwhile, the defendants were trying to disturb the possession and enjoyment of the suit properties which is why the plaintiffs filed the original suit.

The first defendant submitted that it was the plaintiff who was not ready and willing to pay the balance sale consideration and that he had also accepted to hand over the possession of the suit properties. Since the Power of Attorney document was cancelled the first defendant asked the plaintiff to get the advance amount back from the other defendants.

The other defendants took the stand that the first defendant did not act as per the conditions stipulated in the Power of Attorney document and did not properly maintain the account from the suit properties and the income yielded by the suit properties was also not given to the 2 nd and 3 rd defendants. They also contended that the sale agreement was a fabricated document and was created in collusion between the plaintiff and the first defendant and with an intention to grab the suit properties. Thus, it was pleaded that the suit was an orchestrated one and liable to be set aside.

Both the trial court and the lower appellate court did not possess any doubt with respect to the genuineness of the sale agreement.

The court was satisfied that the plaintiff had established the execution of the sale agreement and also the payment of a substantial amount towards sale consideration and also his readiness and willingness to perform his part of the contract. Therefore, he was entitled to the relief of a specific performance. Therefore, the decision of the lower appellate court was correct in law.

Case Title: Lakshmi Ammal and Others v. Gejaraj (died) and others

Case No: S.A No. 565 of 2015

Counsel for Appellant: Ms Meera Gnanasekar

Counsel for Respondent: Mr G. Jeremiah

Citation: 2022 LiveLaw (Mad) 203

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