RFA 70/2019 Page 1 of 117

$~

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 19

th

December, 2025

Pronounced on:17

th

April, 2026.

+ RFA 70/2019, CM APPL. 3892/2019, CM APPL. 34117/2019 & CM

APPL. 46747/2023

SUNITA SINHA .....Appellant

Through: Mr. Anirudh Bakhru, Mr. Ayush Puri,

Mr. Kanav Madnani, Ms. Urvija

Sharma, Ms. Aayomi Sharma, Mr.

Sultan Jafri, Mr. Mohd. Umar and Mr.

Abhigyan Pandey, Advs.

M: 9958029634

versus

M/S LEELA BUILDERS PVT. LTD.& ORS. .....Respondents

Through: Mr. Samar Singh Kachwaha, Ms.

Aakanksha Kaul, Ms. Kavita Vinayak

and Mr. Gaurav Vashisth, Advs. for

R-1 to 8

M: 9540022777

Email: gaurav@ssklawchambers.com

Mr. Lakshay Dhamija, Adv for R-9

Mr. Arpit Bhargava, Mr. Sarthak

Sharma, Mr. Abhishek Gaind, Mr.

Ajay Singh Gosain, Ms. Astha

Sharma and Ms. Nitasha Gupta, Advs.

for R-10

M: 9871316969

Mr. Manoj Pant, Advocate for R-11

(M:9971560508)

RFA 70/2019 Page 2 of 117

CORAM:

HON'BLE MS. JUSTICE MINI PUSHKARNA

JUDGMENT

MINI PUSHKARNA, J.

I. INTRODUCTION

1. The present Regular First Appeal (“RFA”) has been filed under

Section 96 of the Code of Civil Procedure, 1908 (“CPC”), thereby,

challenging the judgment dated 10

th

January, 2019 (“impugned

judgment”), passed by the Additional District Judge - 07, Saket Courts,

New Delhi (“ADJ”), in the suit bearing CS No. 2162/2008 (renumbered as

CS No. 1180/2017), titled as ―Sunita Sinha and Anr. Versus M/s. Leela

Builders Pvt. Ltd. & Ors.‖, whereby, the Trial Court dismissed the suit of the

appellant.

2. The aforesaid suit was filed by the plaintiffs, seeking mandatory

injunction to restrain defendant nos. 1 to 8 from using the property bearing

No. 48, Block No. 171, Sunder Nagar, New Delhi, admeasuring 966.33 sq.

yards (“suit property”), and to deliver the vacant and peaceful possession

of the same to the plaintiffs. The suit, in the alternative, prayed for grant of

decree of possession with respect to the suit property in favour of the

plaintiffs, along with recovery of mesne profits and for permanent

injunction, in respect of the same.

3. Before delving into the facts of the present case, it is pertinent to note

that this Court vide order dated 28

th

January, 2019, directed the parties to

maintain status quo with respect to the title and possession of the suit

RFA 70/2019 Page 3 of 117

property. Subsequently, an application being C.M. APPL. 34117/2019 came

to be filed by respondent nos. 1 to 8 seeking modification of the order dated

28

th

January, 2019 in order for them to seek mutation of the suit property in

their name with the undertaking that they shall not part with the possession

of the suit property. However, by way the order dated 29

th

August, 2024, the

said application was directed to be dealt with directly at the time of hearing

of the main appeal.

4. This Court vide order dated 05

th

May, 2022 has recorded that

respondent nos. 1 to 8 are the only contesting parties in the present appeal.

Further, this Court dealt with the application, i.e., C.M. APPL. 7668/2021,

filed jointly by the four applicants, namely, Shri Sanjeev Sinha (husband of

the deceased appellant), Shri Gaurav Sinha (son of the deceased appellant),

Shri Mahesh Kapoor and Smt. Usha Kapoor, thereby, seeking their

substitution in the appeal in place of the deceased appellant, i.e., Smt. Sunita

Sinha, who died on 07

th

September, 2020.

5. By way of the aforesaid order, this Court impleaded Shri Sanjeev

Sinha (husband of the deceased appellant) and Shri Gaurav Sinha (son of the

deceased appellant) as the legal heirs of the deceased appellant. However,

the other applicants, being Shri Mahesh Kapoor and Smt. Usha Kapoor,

were not impleaded, since they were third parties who claimed interest in the

suit property on the basis of an Agreement to Sell dated 05

th

December,

2005, executed by the appellant in their favour. The said applicants,

however, were granted liberty to take appropriate steps for their intervention

in the appeal separately. However, no steps were taken in this regard.

RFA 70/2019 Page 4 of 117

II. BRIEF FACTS OF THE CASE

a. Pre-Filing of the Suit

6. The brief facts, relevant for adjudication of the appeal, as culled out

from the impugned judgment and the pleadings on record, are as follows:

6.1. The suit property was initially allotted by the President of India

(“lessor”) to one Shri R.N. Luthra by way of a perpetual lease deed dated

30

th

November, 1961. He, thereof, constructed a two and half storeyed super-

structure/bungalow, along with servant quarters and garage block over the

suit property.

6.2. Shri R.N. Luthra died on 16

th

December, 1972, leaving behind a Will

dated 10

th

September, 1971, as per which, the suit property was divided in

1/3

rd

equal shares between his two daughters, namely, Smt. Santosh Sethi

and Smt. Nirmal Krishan,and his grandson, namely, Shri Rajiv Luthra. By

order dated 26

th

November, 1975, in Probate Case No. 1/1974, the suit

property was probated in favour of the said legal heirs.

6.3. Smt. Santosh Sethi died on 29

th

June, 1984, and by way of her Will

dated 20

th

February, 1983, her 1/3

rd

share in the suit property devolved in

favour of her son, Shri. Sanjeev Sethi.

6.4. Smt. Nirmal Krishan, along with Shri Sanjeev Sethi and Shri Rajeev

Luthra (“sellers”), entered into an Agreement to Sell dated 24

th

January,

1989, whereby, the said co-owners agreed to sell their respective shares in

the suit property to respondent nos. 1 to 8 (“purchasers”) for a total agreed

sale consideration of Rs. 80.70 Lacs.

6.5. Clause 2 of the Agreement to Sell recorded that respondent nos. 1 to 8

had paid an amount of Rs. 10.50 Lacs as part payment to the sellers.

RFA 70/2019 Page 5 of 117

6.6. Additionally, as per Clause 4 of the Agreement to Sell, the purchasers

were required to pay a further sum of Rs. 62.40 Lacs upon clearance under

Section 269UC of the Income Tax Act, 1961 (“Income Tax Act”) or within

six months, whichever date is later. Further, the sellers shall deliver the

vacant physical possession of the self-occupied portion and symbolic

possession of the rented portion in the suit property to the purchasers, as part

performance of the Agreement to Sell against the said payment, and call

upon the tenants to attorn to the purchasers.

6.7. Further, as per Clause 6 of the Agreement to Sell, the balance sale

consideration of Rs. 7.80 Lacs was to be paid within 30 days of the sellers

having obtained permission under Section 230-A of the Income Tax Act.

6.8. Subsequently, a sum of Rs. 12 Lacs was paid by the purchasers to the

sellers, and the said payment was acknowledged by the sellers by way of the

receipt dated 01

st

August, 1989.

6.9. Thereafter, the purchasers also paid a sum of Rs. 15 Lacs to the sellers

and a receipt dated 03

rd

August, 1989 was also issued by the sellers in this

regard, whereby, the vacant physical possession of the self-occupied portion

and the symbolic possession of the tenanted portion of the suit property, was

handed over to the purchasers. By way of the said receipt dated 03

rd

August,

1989, the sellers also stated that the purchasers would be entitled to receive

and claim the rent. Accordingly, the Agreement to Sell dated 24

th

January,

1989, stood modified to that extent. The receipt also records that the sellers

executed a General Power of Attorney (“GPA”) in favor of respondent no. 7,

i.e., Shri U.S. Sitani, which is irrevocable.

RFA 70/2019 Page 6 of 117

6.10. The aforesaid GPA dated 03

rd

August, 1989, as executed by the sellers

authorizes the purchasers to demolish, reconstruct, sell, create lease or deal

with the suit property, in any manner, whatsoever.

6.11. As per the purchasers, at the time of handing over of the possession of

the suit property by the sellers on 03

rd

August, 1989 and execution of GPA

on the same day, the parties arrived at an oral understanding that the

purchasers shall take steps to recover possession of the tenanted portion of

the suit property from the tenants, and any payments made by the purchasers

to the tenants in this regard, shall be adjusted towards payment of balance

sale consideration. Thus, the purchasers paid a sum of Rs. 45 Lacs in total,

i.e., Rs. 25 Lacs and 20 Lacs to the tenants of the ground and first floors of

the suit property, respectively, on 24

th

February, 1990. Receipts with regard

thereto, have been placed on record.

6.12. The sellers have further acknowledged that the purchasers paid a sum

of Rs. 8,23,646.72/- on 25

th

April, 1990, as recorded in Ex. DW-1/13, and the

same was paid by the sellers to the L&DO for revocation of re-entry

proceedings.

6.13. One of the co-sellers, Smt. Nirmal Krishan passed away. She was

survived by her husband, Shri G.D. Krishan and her two children, i.e.,

plaintiff no. 1/appellant and plaintiff no. 2/respondent no. 11.

6.14. By way of a letter dated 14

th

March 1991, Shri Rajeev Luthra, one of

the sellers, informed the purchasers that certain challans had been received

from the Municipal Corporation of Delhi (“MCD”) for payment of property

taxes, and stated that there seems to be some mistake in the calculations

done by the MCD.In the said letter, Shri Rajiv Luthra requested to the sellers

RFA 70/2019 Page 7 of 117

that ―you may like to take up the matter with the MCD and have their

records corrected.‖

6.15. The purchasers paid the lease rent in respect of the suit property for

the 10 years’ period from 1989 to 1998 on 05

th

September, 1997.

6.16. Mr. G.D. Krishan, husband of Ms. Nirmal Krishan passed away on

19

th

September, 1998.

6.17. The suit in question came to be filed on 13

th

August, 1999 by the

children of Late Smt. Nirmal Krishan and Late Shri G.D. Krishan,

approximately 11 years after the execution of the Agreement to Sell, GPA

and the possession of the suit property being handed over to the purchasers.

6.18. It is the case of the plaintiffs that the remaining sale consideration

under the Agreement to Sell, has not been paid by the purchasers, and

therefore, the Agreement to Sell, stands cancelled.

b. Post-Filing of the Suit

6.19. By way of the order dated 07

th

January, 2000, Shri Sanjeev Sethi, who

was defendant no. 10, was transposed as plaintiff in the suit on the ground

that he is the owner of 1/3

rd

share of the suit property, by virtue of the Will of

his mother, i.e., Smt. Santosh Sethi.

6.20. On 18

th

April, 2000, this Court restrained the L&DO from transferring

or converting the leasehold rights of the suit property into freehold or

transferring the same to any other person, till the next date of hearing.

6.21. Further, vide order dated 25

th

February, 2002, this Court granted

temporary injunction in favour of the plaintiffs, restraining the L&DO from

transferring or converting the leasehold rights of the suit property, or in any

manner, selling or alienating the propertyto any other person, till the disposal

RFA 70/2019 Page 8 of 117

of the suit. However, it was further directed that the plaintiffs shall not

disturb the peaceful possession of the defendants in the suit property.

6.22. Subsequently, in an appeal being FAO(OS) 152/2002 against the order

dated 25

th

February, 2002 of the Single Judge, the Division Bench of this

Court vide order dated 26

th

March, 2003, vacated the aforesaid status quo

order on the basis of a consent order. The Division Bench passed directions

to the parties to move appropriate applications to the L&DO for conversion

of the suit property from leasehold to freehold and that the same shall be

done in the name of the recorded owners, i.e., Smt. Sunita Sinha, Shri

Arvind Krishna Malhotra, Shri Sanjeev Sethi and Shri Rajiv Luthra.

6.23. The suit was subsequently transferred to the District Court vide order

dated 17

th

November, 2003 in view of change in pecuniary jurisdiction of the

Court.

6.24. Subsequently, by way of order dated 26

th

October, 2006, the plaint

was allowed to be amended. The amended suit fell within the pecuniary

jurisdiction of this Court, and consequently, the proceedings were then again

continued before the High Court in CS(OS) 2162/2008.

6.25. This Court vide 08

th

November, 2011 dismissed the application filed

by the plaintiffs under Order 12 Rule 6 of the CPC, while noting that no

clear admission had been made by the defendants to the extent that the entire

sale consideration had not been paid to the sellers. The Court further

observed that prima facie reading of the GPA would show thatthe entire sale

consideration has been paid or else no ordinary prudent man would execute a

GPA with such sweeping powers or put the defendants in possession of the

suit property.

RFA 70/2019 Page 9 of 117

6.26. The aforesaid decision was further upheld vide judgment dated 20

th

July, 2012 in FAO(OS) 139/2012, wherein, the Division Bench noted that the

plaintiffs will have to explain the conduct of their mother, along with the

other two co-owners, of handing over the possession to the purchasers and

permitting the purchasers to pay money to the tenants for vacation of the

tenanted portions. Pursuant thereto, the SLP (C) 32200/2012, against the

judgment of the Division Bench was also dismissed by the Supreme Court

vide order dated 23

rd

November, 2012.

6.27. Issues in the suit were framed by this Court by order dated 06

th

March,

2012, and the same are reproduced as under:

―(i) Whether the plaintiffs are entitled to a decree of mandatory

injunction or in the alternative a decree for possession? OPP

(ii) Whether the plaintiffs are entitled to a decree of mesne profits and if

so, at what rate and for what period? OPP

(iii) Whether the plaintiffs are entitled to a decree of Injunction as

prayed for? OPP

(iv) Whether the plaintiffs have no locus standi to file the present case?

OPD

(v) Whether the Agreement to Sell dated 24.01.1989 stood cancelled, as

alleged in para 14 of the plaint? OPP

(vi) Whether the suit is barred by limitation? OPD

(vii) Whether the suit has not been properly valued for the purposes of

court fees? OPD

(viii)Whether the answering defendants have discharged their

obligation under the Agreement to Sell dated 24.01.1989? OPD

(ix) Whether defendant nos.1 to 8 were given possession of the suit

property after receipt of the full consideration? OPD

(x) Whether the predecessors-in-interest of the plaintiffs and defendant

no.10 ceased to have any right, title or interest in the suit property, after

execution of the duly registered, irrevocable General Power of Attorney

dated 03.08.1989, in favour of the nominee (defendant no.7) of

Defendant No.1- 6? OPD

(xi) Relief.‖

RFA 70/2019 Page 10 of 117

6.28. Subsequent to the change in the pecuniary jurisdiction, the suit was

transferred from the Delhi High Court to the Patiala House Courts, in the

year 2016. Considering the territorial jurisdiction, the suit was transferred to

South East District, Saket Courts, in the year 2017.

6.29. Thereafter, the impugned judgment was pronounced by the Trial

Court, whereby, the suit of the plaintiffs was dismissed. Hence, the present

appeal has been filed.

6.30. In addition to the aforesaid, it is also to be noted that respondent no. 7,

namely, Shri U.S. Sitani had filed a criminal complaint against the

appellant/plaintiff no. 1 as well as respondent nos. 9 and 10, for committing

offences under Sections 420, 467, 468, 471 and 120-B of the Indian Penal

Code, 1860 (“IPC”). Subsequently, an FIR bearing No. 401/2002 was

registered. Pursuant thereto, in Cr. Case No. 40650/2016, vide order dated

22

nd

November, 2021, the proceedings qua Smt. Sunita Sinha were abated

due to her demise. The case is to be revived as and when the accused

persons, namely, Shri Arvind and Shri Sanjeev Sethi, both of whom were

declared as proclaimed offenders, are apprehended or arrested.

III. SUBMISSIONS OF THE APPELLANT

7. Before this Court, the appellant has raised the following contentions

for seeking setting aside of the impugned judgment:

7.1. The appellant acquired 1/3

rd

share in the suit property from her father,

Late Shri G.D. Krishan, who died intestate on 19

th

September, 1998.

7.2. The sellers under the Agreement to Sell dated 24

th

January, 1989 only

received 56.7% of the entire sale consideration, i.e., Rs. 45,73,646.72/- out

of the total sale consideration of Rs. 80,70,000/-. Since the entire payment

RFA 70/2019 Page 11 of 117

was never made by the purchasers, they failed to fulfill their contractual

obligation and the Agreement to Sell, stood automatically cancelled in terms

of Clause 1, read with Clause 4 therein.

7.3. The impugned judgment has erred in holding that there existed any

oral understanding between the sellers and the purchasers, and the alleged

payment of Rs. 45 Lacs made to the tenants, stood adjusted against the

balance sale consideration.

7.4. The Agreement to Sell dated 24

th

January, 1989, did not provide for

any obligation on the sellers to get the tenanted portion of the suit premises

vacated and handover possession of the same to the purchasers. Further,

there is no mention of any Clause, whereby, payments made to the tenants

could be construed as fulfillment of the obligations of the respondent nos. 1

to 8 under the Agreement to Sell.

7.5. The receipt dated 01

st

August, 1989 also records that the balance sale

consideration had to be paid at the time of registration of sale deed. The GPA

dated 03

th

August, 1989, also never recorded any fact about any oral

understanding between the sellers and the purchasers. Further, on the same

date, the receipt issued by the sellers for a sum of Rs. 15 Lacs categorically

stated that the balance sale consideration shall be paid at the time of

registration of sale deed. Additionally, the receipt noted that the vacant

physical possession of the self-occupied portion and the symbolic possession

of the tenanted portion of the suit property, has been handed over to the

purchasers, and the Agreement to Sell dated 24

th

January, 1989 was modified

to that extent only. The said receipt does not record any oral understanding

between the purchasers and the sellers.

RFA 70/2019 Page 12 of 117

7.6. Had the parties to the Agreement to Sell, agreed that the payment to

the tenant would be adjusted towards the sale consideration, there would

have been no question for providing payment of balance sale consideration

at the time of registration of sale deed.

7.7. The findings in the impugned judgment are contradictory to the bare

terms of the receipt dated 03

rd

August, 1989, which clearly records that the

balance sale consideration was to be paid at the time of registration of the

sale deed. Further, the said receipt only records that physical and symbolic

possession of the vacant and the tenanted portions of the suit property,

respectively, was handed over to respondent nos. 1 to 8. Thus, the impugned

judgment failed to note that the Agreement to Sell dated 24

th

January, 1989,

was modified only to this extent.

7.8. As per the case of the respondent nos. 1 to 8, the alleged oral

understanding occurred prior to the execution of the GPA and the receipt

dated 03

rd

August, 1989. Therefore, the said are subsequent documents to the

alleged oral understanding, however, they do not record anything about the

oral understanding or about the payment to tenants to secure relinquishment

of tenancy. Hence, this alleged oral understanding being contrary to the

admitted terms of the Agreement to Sell, GPA and the receipts is hit by

Sections 91 and 92 of the Indian Evidence Act, 1872 (“Evidence Act”).

7.9. Even otherwise, the alleged payments made by the purchasers to the

tenants for relinquishment of tenancy, could not have been adjusted against

the balance sale consideration under the Agreement to Sell, as such

payments were unlawful under Section 5(3) of the Delhi Rent Control Act,

1958 (“DRC Act”). Hence, the said alleged payments cannot be regarded as

valid consideration in terms of Sections 23 and 24 of the Indian Contract

RFA 70/2019 Page 13 of 117

Act, 1872 (“Contract Act”). Thus, the alleged oral understanding is also

void under the DRC Act.

7.10. The alleged payment of Rs. 45 Lacs and the receipts thereto dated 24

th

February, 1990, were never proved as the tenants were never called as

witnesses before the Trial Court.

7.11. By way of the letter dated 23

rd

November, 1993, Shri G.D. Krishan

called upon Shri U.S. Sitani to pay the balance sale consideration or

otherwise, the Agreement to Sell dated 24

th

January, 1989, will stand

cancelled. Since the balance sale consideration was never paid to the sellers,

the Agreement to Sell stood cancelled. Therefore, no sale deed was ever

executed pursuant to the Agreement to Sell and the GPA.

7.12. As per the Clause 7 of the Agreement to Sell, the respondent nos. 1 to

8 were empowered to file a suit for specific performance if they were ready

and willing to pay the sale consideration. However, since the respondents

never made the requisite payments, no suit for specific performance was

filed by them.

7.13. It is settled law that an Agreement to Sell or a GPA is not a document

of title or a deed of transfer of property by sale, and as such, does not confer

absolute title upon the buyer over the suit property in view of Section 54 of

the Transfer of Property Act, 1882 (“TP Act”).

7.14. The Trial Court by way of the impugned judgment erroneously held

that the dictum in Suraj Lamp and Industries Private Limited Versus State

of Haryana and Another

1

, would not apply to the present case, as the said

decision is prospective in nature. This Court in the case of Chander Dutt

1

(2012) 1 SCC 656.

RFA 70/2019 Page 14 of 117

Sharma Versus Prem Chand and Others

2

, has held that the judgment passed

by the Supreme Court in Suraj Lamp (Supra) only puts down the settled law

that there can be no transfer of title without a registered conveyance deed,

and documents such as an Agreement to Sell or GPA can only give a right to

file a suit for specific performance. In that regard, further reliance has been

placed upon the judgment of Shakeel Ahmed Versus Syed Akhlaq Hussain

3

.

7.15. Further, the receipt dated 03

rd

August, 1989 categorically mandates

entering into a deed of sale, therefore, it cannot be said that the GPA is as

good as a sale deed, as payments were yet to be made on the date when the

GPA had been executed.

7.16. The respondent nos. 1 to 8 are estopped from seeking possession

under Section 53-A of the TP Act on the basis of part-performance as the

same is inherently contradictory to the case of the contesting respondents

that they are the owners of the suit property vide the GPA.

7.17. The benefit under Section 53-A of the TP Act is not available to the

purchasers, since they kept quiet, remained passive, and took no effective

steps, even when the suit for specific performance was barred by time. Thus,

the respondent nos. 1 to 8 cannot be said to be willing to perform their

obligations under the Agreement to Sell. Further, if the argument of the

respondent nos. 1 to 8 is to be accepted, a part performer would take control

over the property till eternity without ever performing the contract.

7.18. The benefit under Section 53-A of the TP Act is only with respect to a

contract in writing and therefore, the respondents could not rely on this

provision on the basis of an alleged oral understanding.

2

2018 SCC OnLine Del 9903.

3

(2023) 20 SCC 655.

RFA 70/2019 Page 15 of 117

7.19. The GPA is not irrevocable, and lapsed after the death of the principal,

Smt. Nirmal Krishan on 03

rd

August, 1990. An Agreement to Sell coupled

with a GPA, even where both documents are contemporaneous, executed in

favour of the same person and described as ‘irrevocable’, is neither

irrevocable nor does it create title or ownership in favour of the GPA holder

or create any ‘interest’ in the subject-matter, so as to attract the protection of

Section 202 of the Contract Act.

7.20. The GPA, in the present case, does not satisfy the mandatory

requirements of Section 202 of the Contract Act, since no proprietary or

protectable interest whatsoever was created in favour of respondent nos. 1 to

8.

7.21. The suit in question is maintainable being one based on title and is

well within the limitation period. The law stands settled that when title is

directly in issue and adjudication on title is necessary for deciding

possession, a suit for possession or injunction is perfectly maintainable

without a separate declaratory relief. Where the question of title is directly

and substantially in issue, and where the Court must determine title in order

to grant the relief sought, no independent declaratory relief is necessary.

7.22. Once the Trial Court framed and decided the issue of ownership, the

appellant’s suit for possession, being a suit based on title, did not require a

separate prayer for cancellation of the underlying documents. Thus, the suit

is fundamentally one which is based on title and was filed within the

limitation period of 12 years under Article 65 of the Limitation Act, 1963

(“Limitation Act”).

RFA 70/2019 Page 16 of 117

7.23. A co-owner is entitled to protect the joint property and may sue for

possession or injunction without impleading every other co-owner, so long

as there is no conflict of interest between them.

IV. SUBMISSIONS MADE BY RESPONDENT NOS. 1 TO 8

8. Rebutting the contentions of the appellant, the respondent nos. 1 to 8

have raised the following arguments before this Court:

8.1. The suit filed before the Trial Court was completely frivolous and

vexatious, wherein, a sale transaction in relation to an immovable property,

was sought to be challenged after approximately 11 years, and that too, not

by the sellers, but by the children of one of the sellers, who has passed away.

The original surviving sellers were also approached by the plaintiffs at the

time of filing of suit, however, they refused to join them in the same,

showcasing that the suit was baseless and dishonest.

8.2. The contentions of the appellant that the Agreement to Sell stood

cancelled cannot be accepted, given the conduct of the parties to the

Agreement to Sell.

8.3. Even though the time limit to pay the amount of Rs. 62.4 Lacs expired

on 20

th

June, 1989 as per Clause 4 of the Agreement to Sell, the sellers did

not forfeit the sum of Rs. 10.5 Lacs. Rather, the sellers acquiesced and

continued with the transaction as they accepted a further sum of Rs. 12 Lacs

on 01

st

August, 1989 and a sum of Rs. 15 Lacs on 03

rd

August, 1989, from

the purchasers, and handed over the possession of the suit property to the

purchasers. On the same date, the sellers also executed an irrevocable GPA,

whereby, the purchasers were given rights akin to an owner.

8.4. The parties had arrived at an oral understanding that the purchasers

shall take all the steps required to recover possession from the tenants and

RFA 70/2019 Page 17 of 117

any payments made in this regard to the tenants shall be adjusted against the

balance sale consideration.

8.5. In line with this oral understanding, the receipt dated 03

rd

August,

1989 stated the balance sale consideration shall be paid at the time of

registration of the sale deed, as the amounts which the purchasers may have

to pay to the tenants were not known at this stage. The receipt does not, by

any stretch, bar the respondent nos. 1 to 8 from asserting that there existed

any oral understanding with the sellers.

8.6. The oral understanding arrived between the parties is not hit by

Sections 91 and 92 of the Evidence Act, since the purpose of the said

provisions is to only exclude oral evidence that varies or contradicts a

written agreement or instrument. The payment receipt dated 03

rd

August,

1989 acknowledges that subsequent to handing of possession of the suit

property to the contesting respondents and execution of irrevocable GPA, the

Agreement to Sell dated 24

th

January, 1989 has been ‘modified’ to that

extent. Therefore, to prove said oral understanding, the contesting

respondents can certainly lead appropriate oral evidence.

8.7. The plaintiffs had, in fact, sought a decree on admission in the

underlying suit, by heavily relying on Sections 91 and 92 of the Evidence

Act, to contend that no oral evidence to prove payment of full consideration

is permissible in this case. Their application, in this regard, was dismissed by

this Court and subsequently, the said decision was upheld by the Division

Bench of this Court, which categorically held that the matter required

leading of evidence and the onus was upon the plaintiffs therein to explain

the conduct of their mother and other co-sellers. The said decision of the

RFA 70/2019 Page 18 of 117

Division Bench was further upheld by the Supreme Court vide order dated

23

rd

November, 2012.

8.8. However, the plaintiffs have failed to explain the conduct of the

sellers and the evidence led by the contesting respondents regarding the oral

understanding remains un-rebutted.

8.9. Since the sellers handed over the possession to the purchasers and also

irrevocably conveyed all rights akin to an owner through the GPA, it is clear

that they had received what they considered as adequate sale consideration.

8.10. Had the sellers not been satisfied with the aforesaid understanding,

there would have been no occasion for them to hand over the possession and

execute the GPA.

8.11. It is in line with this understanding, that the purchasers paid a sum of

Rs. 45 Lacs to the tenants on 24

th

February, 1990. Further, the sellers on 25

th

April, 1990 also accepted Demand Drafts for a sum of Rs. 8,23,646.72/-

from the purchasers, and submitted the same to the L&DO to revoke re-entry

proceedings. Thus, the purchasers have paid a total sum of Rs.

90,73,646.67/- for the suit property, which is more than the sale

consideration under the Agreement to Sell. Since no balance sale

consideration remained to be paid, none was ever demanded by the sellers

and the sale transaction had been concluded.

8.12. Thereafter, on 14

th

March, 1991, the sellers informed the purchasers

about certain challans received from the MCD for payment of property

taxes, and that there were certain mistakes in the calculations therein.

Therefore, the purchasers could take up the matter with the MCD. This

conduct of the sellers is consistent with the parties, who have no remaining

RFA 70/2019 Page 19 of 117

rights, interests or obligations in relation to the said property, including

payment of statutory dues.

8.13. The appellant has further alleged that the understanding with respect

to paying tenants to vacate the suit property is prohibited under the

provisions of DRC Act. The said objection was never taken by the appellant

in her pleadings.

8.14. The intention of the legislature behind Section 5(3) of the DRC Act

was to protect a statutory tenant and not assist a third-party, who has no

locus, to setup a dishonest challenge to a different contract. The challenge

under this provision could have only been raised by a tenant and the same is

not applicable where the tenant raises no grievance and willingly

relinquishes the tenancy.

8.15. The reliance placed by the appellants on the alleged letter dated 23

rd

November, 1993, allegedly written by Shri. G.D. Krishan to respondent no. 7

is devoid of any merits, as the said letter is forged or fabricated and no such

letter was ever sent to the contesting respondents.

8.16. The plaintiffs have placed reliance on the photocopy of the

Acknowledgement Due Card (“AD Card”) bearing a stamp of a money

order. However, the purchasers have led evidence of witnesses from the

postal department, who confirmed that the postal department does not use

any such stamp.

8.17. The fact that respondent nos. 1 to 8 have paid a lease rent for the suit

property for a period of ten years from the year 1989 to 1998 shows that the

sale transaction has been concluded and the Agreement to Sell has not been

cancelled.

RFA 70/2019 Page 20 of 117

8.18. The suit in question came to be filed only after 11 years of the

execution of the Agreement to Sell, GPA and the possession being handed

over to the purchasers, and pursuant to the death of Shri G.D. Krishan. This

is because the plaintiffs could not have filed the suit during the lifetime of

their parents, who were satisfied with the receipt of the full sale

consideration and treated the transaction as a concluded one. This is also

substantiated by the statement of the appellant during her cross-examination

that the other co-sellers refused to join her in the underlying suit.

8.19. Plaintiff, being a purported successors-in-interest to one of the original

sellers, has no locus to contend that the Agreement to Sell stood cancelled,

when her predecessor-in-interest clearly acted in a manner contrary to such

assertions.

8.20. Since the plaintiffs have admitted to the execution of the Agreement to

Sell, GPA and the fact of possession, the relief claimed with respect to the

possession and mandatory injunction in the plaint is untenable, as no

cancellation of the Agreement to Sell and GPA, has been sought. Since the

appellant in her cross-examination has confirmed that the possession of the

suit property has not been taken forcibly by the purchasers, she has admitted

that possession was handed over in terms of Agreement to Sell and GPA.

Therefore, no relief as to recovery of possession can be sought without

seeking the principal relief of cancellation in relation to such documents.

8.21. The purchasers have all rights akin to ownership on the basis of the

irrevocable GPA, since the GPA remains unchallenged. Further, the rights

under the said GPA do not lapse with the death of the executors and the

rights of the purchasers stand protected under Section 200 of the Contract

Act.

RFA 70/2019 Page 21 of 117

8.22. Even if it assumed that the transaction was not concluded, the

possession of the respondent over the suit property is protected under the

principle of part-performance as per Section 53-A of the TP Act.

8.23. The contesting respondents have been in uninterrupted and continuous

possession of the suit property since at least August, 1989 and the same has

never been challenged or disputed by the sellers. Therefore, without

prejudice, even if the appellant’s contention was to be accepted, the only

legal remedy of the plaintiffs was to file a suit for payment of the balance

sale consideration.

8.24. In order to enjoy the protection under Section 53-A of the TP Act, the

purchasers in possession need not file a suit for specific performance for

execution of a sale deed.

8.25. In order to sustain the relief sought in the plaint, a challenge to the

GPA and the Agreement to Sell was mandatory. Further, the period of

limitation to such a challenge is 3 years as per Article 58 of the Limitation

Act. Since said period expired on 03

rd

August, 1992 and 24

th

January, 1992,

respectively, thus, the suit is barred by limitation.

V. ANALYSIS AND FINDINGS

9. This Court has heard the arguments of the parties, and perused the

documents and evidence on record.

a. Subsistence of the Agreement to Sell dated 24

th

January, 1989

10. The first question for consideration before this Court is, as to whether

the Agreement to Sell dated 24

th

January, 1989, executed by the sellers in

favour of respondent nos. 1 to 8, i.e., the purchasers, stood cancelled or

continued to subsist.

RFA 70/2019 Page 22 of 117

11. The undisputed facts that emerge from the pleadings and evidence on

record is that an Agreement to Sell dated 24

th

January, 1989, Ex. PW-1/2,

was executed by three individual co-owners, namely, Shri Sanjeev

Sethi/respondent no. 10, Shri Rajeev Luthra/respondent no. 9 and Late Smt.

Nirmal Krishan, mother of appellant and respondent no. 11, in favour of

respondent nos. 1 to 8 herein.

12. The plaintiff no. 1/appellant, passed away during the proceedings

before this Court. She was substituted by her LRs. The LRs of the deceased

plaintiff no.1/appellant, have vehemently argued that since the entire

payment as per the Agreement to Sell dated 24

th

January, 1989 was never

made by the respondent nos. 1 to 8, the Agreement to Sell stood

automatically cancelled in terms of Clause 1, read with Clause 4 therein, for

failure in performing their contractual obligation.

13. In this regard, it is to be noted that under the Agreement to Sell, a total

consideration of Rs. 80.70 Lacs was payable. Clause 2 of the Agreement to

Sell records the receipt of a sum of Rs. 10.50 Lacs by the sellers, as part-

consideration. As per Clause 4 of the Agreement to Sell, another amount of

Rs. 62.40 Lacs was to be paid after obtaining Clearance Certificate under

Section 269UC of the Income Tax Act or within 6 months, whichever date

was later, failing which, the transaction would stand cancelled and part

payment of Rs. 10.50 Lacs, shall stand forfeited.

14. Further, Clause 5 provides that the sellers shall take steps for

cancellation of re-entry proceedings, and compromise with the

lessors/L&DO. Any amount demanded by the lessors shall be borne by the

purchasers, and the same would be adjusted in the consideration payable.

RFA 70/2019 Page 23 of 117

15. Clause 6 of the Agreement to Sell further provides that upon delivery

of the possession, the sellers shall obtain income tax clearance under Section

238 of the Income Tax Act, and the purchasers shall pay the balance sale

consideration of Rs. 7.80 Lacs.

16. The Clearance Certificate for sale under Section 269UC of the Income

Tax Act was received on 07

th

March, 1989. The stipulated period of 6

months, as agreed under Clause 4 of the Agreement to Sell, lapsed on 20

th

June, 1989. However, the said amount of Rs. 62.40 Lacs was not paid by the

purchasers till said date.

17. This Court notes that despite the lapse of the time period provided

under the Agreement to Sell, the sellers did not forfeit the sum of Rs. 10.50

Lacs already paid by the purchasers. Rather, even after the expiry of the time

period under Clause 4 of the Agreement to Sell, a sum of Rs. 12 Lacs was

received and accepted by the sellers from the purchasers towards sale

consideration on 01

st

August, 1989, by way of two Demand Drafts for Rs. 6

Lacs each, marked as Ex. DW-1/5 (A)-(B). The said payment of Rs. 12 Lacs

was also acknowledged by the sellers vide a receipt dated 01

st

August, 1989,

marked as Ex. DW-1/6, in this regard.

18. The sellers subsequently accepted a sum of Rs. 15 Lacs from the

purchasers on 03

rd

August, 1989, by way of three Demand Drafts, for sum of

Rs. 5 Lacs each, marked as Ex. DW-1/7-(a)-(b)-(c).The payment of Rs. 15

Lacs was acknowledged by the sellers by issuing the receipt dated 03

rd

August, 1989, marked as Ex. DW-1/8.

19. The aforesaid receipt dated 03

rd

August, 1989 also records that the

sellers handed over the vacant physical possession of the self-occupied

portion and symbolic possession of the tenanted portion of the suit property

RFA 70/2019 Page 24 of 117

to the purchasers. It also states that the purchasers shall be entitled to claim

the rent amount and the Agreement to Sell, stands modified to this extent.

Further, the said receipt also mentions the fact of execution of the

irrevocable GPA. The said GPA dated 03

rd

August, 1989, marked as Ex. DW-

1/10, was executed by the sellers in favour of respondent no. 7 herein. The

receipt dated 03

rd

August, 1989, modifying the terms of the Agreement to

Sell dated 24

th

January, 1989, is reproduced as under:

―xxx xxx xxx

RFA 70/2019 Page 25 of 117

xxx xxx xxx‖

20. Thereafter, the sellers approached the L&DO for revocation of re-

entry proceedings with respect to the suit property. In terms of Clause 5 of

the Agreement to Sell, the purchasers paid an amount of Rs. 8,23,646.72/- on

25

th

April, 1990 to the sellers by way of a Demand Draft. The said payment

was acknowledged by way of a receipt by Shri Rajeev Luthra, i.e., one of the

sellers. Thereafter, the sellers paid the requisite amount to the L&DO for

revocation of the re-entry proceedings.

21. Further, by way of the letter dated 14

th

March, 1991, marked as Ex.

DW-1/17, Shri Rajeev Luthra wrote to Shri U.S. Sitani, respondent no. 7

RFA 70/2019 Page 26 of 117

herein, that he received two challans from the MCD for payment of property

tax, and that there seemed to be some mistake in the calculations done by the

MCD. He, thus, requested respondent no. 7 herein to take up the matter with

the MCD and have the records corrected.

22. It bears consideration as to why Shri Rajiv Luthra would address the

said letter calling upon Shri U.S. Sitani, to take up the matter of property tax

with the MCD, if he treated the Agreement to Sell as having been cancelled,

for any alleged non-payment of balance sale consideration. Rather, said

letter is consistent with the conduct of a person who no longer had any

interest in the statutory obligations that came with the suit property, and who

did not treat the Agreement to Sell as having been cancelled.

23. It is also to be noted that the purchasers, respondent nos. 1 to 8 herein,

have been paying statutory dues towards payment of the lease rent to the

L&DO, as well as property tax to the MCD with respect to the suit property

since 1989. The documents with regard thereto are before this Court, and

marked as Ex. DW-1/16 (a)-(i).

24. Thus, from the aforesaid sequence of conduct of the original sellers, it

is manifest that the sellers never treated the Agreement to Sell as cancelled,

at any point of time. The subsequent payments, after lapse of the time period

under Clause 4 of the Agreement to Sell, have been established during the

course of evidence. Rather than cancelling the Agreement to Sell, all the

signatories thereto, i.e., the sellers, executed the GPA dated 03

rd

August,

1989 in favour of respondent no. 7, thereby handing over possession of the

suit property to the purchasers.

25. Moreover, it is undisputed that the original sellers never demanded

any alleged balance amount from the purchasers due under the Agreement to

RFA 70/2019 Page 27 of 117

Sell, executed between the parties. None of the original owners/ sellers

initiated any legal action against the purchasers, respondent nos. 1 to 8.

26. The appellant has also admitted that her mother did not take any

action against the respondents while she was alive. It is imperative to note

that it is not the case of the appellant that her mother was constrained or

compelled by any circumstances in not filing the suit or taking any legal

action while she was alive. Not even a single letter or correspondence has

been shown by the appellant to prove that her mother, or the other two

sellers, ever demanded any balance sale consideration from the purchasers.

27. Although the appellant alleges that the Agreement to Sell was

cancelled, the exact date as to when it was cancelled, has not been

mentioned. No pleading has been made in the plaint to the effect that any

legal notice was sent to the purchasers/ respondent nos. 1 to 8, that the

Agreement to Sell, stood cancelled.

28. This Court finds it incomprehensible that the sellers not only parted

with the possession of the suit property even though they allegedly did not

receive almost half of the sale consideration, but took no further steps

whatsoever, for 11 years to secure the alleged balance sale consideration.

The said inaction of the original sellers, coupled with the lack of any

justification/explanation as to the said conduct, makes the case put forth by

the appellant highly improbable.

29. The aforesaid narration is a clear pointer to the fact that the sellers

have consistently acted upon the Agreement to Sell by accepting payments

repeatedly from the purchasers, and handing over the possession of the suit

property to the purchasers. From the evidence on record, it is manifest that

RFA 70/2019 Page 28 of 117

the appellant failed to prove that sellers treated the Agreement to Sell, as

having been cancelled.

30. The conduct of the sellers clearly establishes that they acquiesced and

ratified the Agreement to Sell, and hence it cannot be contended that the

Agreement to Sell stood cancelled. Further, the appellant has nowhere

pleaded that the sale consideration admitted to have been received by the

sellers, was ever returned to the purchasers. Therefore, the appellant cannot

be allowed to contend that the Agreement to Sell, stood cancelled.

31. In this regard, it would be apposite to refer to the decision in the case

of Union of India and Others Versus N. Murugesan and Others

4

, wherein,

the Supreme Court held that acquiescence, whether by words or conduct, is

an exception to termination of contract. Additionally, where one knowingly

accepts benefits of a contract, he is estopped from denying the

validity/binding effect of such contract, as the law does not permit a person

to both approbate and reprobate or blow hot and cold. The relevant

paragraphs of the said decision are reproduced as under:

―xxx xxx xxx

19. Section 39 deals with the effect of the refusal of the party to

perform a promise wholly. Though we are not concerned with this

provision, this provision is the only one that speaks of the concept of

acquiescence, which could be signified by words or conduct, being

an exception for terminating the contract. Under this provision, a

promisee may put an end to the contract unless there exists an

element of acquiescence that could be seen and exhibited through

his words or conduct. Obviously, such a contract which would also

involve words or conduct, is to be seen on the facts of each case.

xxx xxx xxx

25. Acquiescence would mean a tacit or passive acceptance. It is

implied and reluctant consent to an act. In other words, such an

action would qualify a passive assent. Thus, when acquiescence

4

(2022) 2 SCC 25.

RFA 70/2019 Page 29 of 117

takes place, it presupposes knowledge against a particular act. From

the knowledge comes passive acceptance, therefore instead of taking

any action against any alleged refusal to perform the original

contract, despite adequate knowledge of its terms, and instead being

allowed to continue by consciously ignoring it and thereafter

proceeding further, acquiescence does take place. As a consequence,

it reintroduces a new implied agreement between the parties. Once

such a situation arises, it is not open to the party that acquiesced

itself to insist upon the compliance of the original terms. Hence,

what is essential, is the conduct of the parties. We only dealt with the

distinction involving a mere acquiescence. When acquiescence is

followed by delay, it may become laches. Here again, we are inclined

to hold that the concept of acquiescence is to be seen on a case-to-

case basis.

Approbate and reprobate

26. These phrases are borrowed from the Scots law. They would only

mean that no party can be allowed to accept and reject the same

thing, and thus one cannot blow hot and cold. The principle behind

the doctrine of election is inbuilt in the concept of approbate and

reprobate. Once again, it is a principle of equity coming under the

contours of common law. Therefore, he who knows that if he objects

to an instrument, he will not get the benefit he wants cannot be

allowed to do so while enjoying the fruits. One cannot take

advantage of one part while rejecting the rest. A person cannot be

allowed to have the benefit of an instrument while questioning the

same. Such a party either has to affirm or disaffirm the transaction.

This principle has to be applied with more vigour as a common law

principle, if such a party actually enjoys the one part fully and on

near completion of the said enjoyment, thereafter questions the other

part. An element of fair play is inbuilt in this principle. It is also a

species of estoppel dealing with the conduct of a party. We have

already dealt with the provisions of the Contract Act concerning the

conduct of a party, and his presumption of knowledge while

confirming an offer through his acceptance unconditionally.

27. We would like to quote the following judgments for better

appreciation and understanding of the said principle:

27.1. Nagubai Ammal v. B. Shama Rao [Nagubai Ammal v. B.

Shama Rao, 1956 SCR 451: AIR 1956 SC 593]: (AIR pp. 601-02, para

23)

“23. But it is argued by Sri Krishnaswami Ayyangar that as the

proceedings in OS. No. 92 of 1938-39 are relied on as barring the

plea that the decree and sale in OS. No. 100 of 1919-20 are not

collusive, not on the ground of res judicata or estoppel but on the

RFA 70/2019 Page 30 of 117

principle that a person cannot both approbate and reprobate. It is

immaterial that the present appellants were not parties thereto, and

the decision in Verschures Creameries Ltd. v. Hull & Netherlands

Steamship Co. Ltd. [Verschures Creameries Ltd. v. Hull &

Netherlands Steamship Co. Ltd., (1921) 2 KB 608 (CA)], and in

particular, the observations of Scrutton, LJ., at p. 611 were quoted

in support of this position. There, the facts were that an agent

delivered goods to the customer contrary to the instructions of the

principal, who thereafter filed a suit against the purchaser for price

of goods and obtained a decree.

Not having obtained satisfaction, the principal next filed a suit

against the agent for damages on the ground of negligence and

breach of duty. It was held that such an action was barred. The

ground of the decision is that when on the same facts, a person has

the right to claim one of two reliefs and with full knowledge he

elects to claim one and obtains it, it is not open to him thereafter to

go back on his election and claim the alternative relief. The

principle was thus stated by Bankes, L.J.: (Verschures Creameries

Ltd. case [Verschures Creameries Ltd. v. Hull & Netherlands

Steamship Co. Ltd., (1921) 2 KB 608 (CA)], KB p. 611)

‗… Having elected to treat the delivery to him as an authorised

delivery they cannot treat the same act as a misdelivery. To do so

would be to approbate and reprobate the same act.‘

The observations of Scrutton, L.J. on which the appellants rely are

as follows: (Verschures Creameries Ltd. case [Verschures

Creameries Ltd. v. Hull & Netherlands Steamship Co. Ltd., (1921)

2 KB 608 (CA)], KB pp. 611-12)

‗… A plaintiff is not permitted to ―approbate and reprobate‖. The

phrase is apparently borrowed from the Scotch law, where it is

used to express the principle embodied in our doctrine of election

— namely, that no party can accept and reject the same instrument

: Ker v. Wauchope [Ker v. Wauchope, (1819) 1 Bligh PC 1 at p. 21

: 4 ER 1 at p. 8] : Douglas-Menzies v. Umphelby [Douglas-

Menzies v. Umphelby, 1908 AC 224 at p. 232 (PC)] . The doctrine

of election is not however confined to instruments. A person cannot

say at one time that a transaction is valid and thereby obtain some

advantage, to which he could only be entitled on the footing that it

is valid, and then turn round and say it is void for the purpose of

securing some other advantage. That is to approbate and reprobate

the transaction.‘

It is clear from the above observations that the maxim that a

person cannot ―approbate and reprobate‖ is only one application

RFA 70/2019 Page 31 of 117

of the doctrine of election, and that its operation must be confined

to reliefs claimed in respect of the same transaction and to the

persons who are parties thereto. The law is thus stated

in Halsbury's Laws of England, Vol. XIII, p. 464, para 512:

‗On the principle that a person may not approbate and

reprobate, a species of estoppel has arisen which seems to be

intermediate between estoppel by record and estoppel in pais, and

may conveniently be referred to here. Thus a party cannot, after

taking advantage under an order (e.g. payment of costs), be heard

to say that it is invalid and ask to set it aside, or to set up to the

prejudice of persons who have relied upon it a case inconsistent

with that upon which it was founded; nor will he be allowed to go

behind an order made in ignorance of the true facts to the

prejudice of third parties who have acted on it.‘

27.2.State of Punjab v. Dhanjit Singh Sandhu [State of

Punjab v. Dhanjit Singh Sandhu, (2014) 15 SCC 144]: (SCC pp. 153-

54, paras 22-23 & 25-26)

―22. The doctrine of ―approbate and reprobate‖ is only a

species of estoppel, it implies only to the conduct of parties. As in

the case of estoppel it cannot operate against the provisions of a

statute. (Vide CIT v. MR. P. Firm Muar [CIT v. MR. P. Firm Muar,

AIR 1965 SC 1216].)

23. It is settled proposition of law that once an order has been

passed, it is complied with, accepted by the other party and derived

the benefit out of it, he cannot challenge it on any ground.

(Vide Maharashtra SRTC v. Balwant Regular Motor

Service [Maharashtra SRTC v. Balwant Regular Motor Service,

AIR 1969 SC 329].) In R.N. Gosain v. Yashpal Dhir [R.N.

Gosain v. Yashpal Dhir, (1992) 4 SCC 683] this Court has

observed as under: (R.N. Gosain case [R.N. Gosain v. Yashpal

Dhir, (1992) 4 SCC 683], SCC pp. 687-88, para 10)

‗10. Law does not permit a person to both approbate and

reprobate. This principle is based on the doctrine of election

which postulates that no party can accept and reject the same

instrument and that ‗a person cannot say at one time that a

transaction is valid and thereby obtain some advantage, to which

he could only be entitled on the footing that it is valid, and then

turn round and say it is void for the purpose of securing some

other advantage‘.‘

* * *

25. The Supreme Court in Rajasthan State Industrial

Development & Investment Corpn. v. Diamond & Gem

Development Corpn. Ltd. [Rajasthan State Industrial

RFA 70/2019 Page 32 of 117

Development & Investment Corpn. v. Diamond & Gem

Development Corpn. Ltd., (2013) 5 SCC 470: (2013) 3 SCC (Civ)

153], made an observation that a party cannot be permitted to

―blow hot and cold‖, ―fast and loose‖ or ―approbate and

reprobate‖. Where one knowingly accepts the benefits of a

contract or conveyance or an order, is estopped to deny the

validity or binding effect on him of such contract or conveyance

or order. This rule is applied to do equity, however, it must not be

applied in a manner as to violate the principles of right and good

conscience.

26. It is evident that the doctrine of election is based on the

rule of estoppel, the principle that one cannot approbate and

reprobate is inherent in it. The doctrine of estoppel by election is

one among the species of estoppel in pais (or equitable estoppel),

which is a rule of equity. By this law, a person may be precluded,

by way of his actions, or conduct, or silence when he has to speak,

from asserting a right which he would have otherwise had.‖

27.3.Rajasthan State Industrial Development & Investment

Corpn. v. Diamond & Gem Development Corpn. Ltd. [Rajasthan State

Industrial Development & Investment Corpn. v. Diamond & Gem

Development Corpn. Ltd., (2013) 5 SCC 47: (2013) 3 SCC (Civ) 153]:

(SCC pp. 480-81, paras 15-16)

―I. Approbate and reprobate

15. A party cannot be permitted to ―blow hot-blow cold‖, ―fast

and loose‖ or ―approbate and reprobate‖. Where one knowingly

accepts the benefits of a contract, or conveyance, or of an order, he

is estopped from denying the validity of, or the binding effect of such

contract, or conveyance, or order upon himself. This rule is applied

to ensure equity, however, it must not be applied in such a manner so

as to violate the principles of what is right and of good conscience.

[Vide Nagubai Ammal v. B. Shama Rao [Nagubai Ammal v. B. Shama

Rao, 1956 SCR 451: AIR 1956 SC 593], CIT v. V. MR. P. Firm

Muar [CIT v. MR. P. Firm Muar, AIR 1965 SC 1216], Ramesh

Chandra Sankla v. Vikram Cement [Ramesh Chandra

Sankla v. Vikram Cement, (2008) 14 SCC 58: (2009) 1 SCC (L&S)

706], Pradeep Oil Corpn. v. MCD [Pradeep Oil Corpn. v. MCD,

(2011) 5 SCC 270: (2011) 2 SCC (Civ) 712], Cauvery Coffee

Traders v. Hornor Resources (International) Co. Ltd. [Cauvery Coffee

Traders v. Hornor Resources (International) Co. Ltd., (2011) 10 SCC

420: (2012) 3 SCC (Civ) 685] and V.

Chandrasekaran v. AdministrativeOfficer [V.

Chandrasekaran v. Administrative Officer, (2012) 12 SCC 133: (2013)

2 SCC (Civ) 136 : (2013) 4 SCC (Cri) 587: (2013) 3 SCC (L&S)

416].]

RFA 70/2019 Page 33 of 117

16. Thus, it is evident that the doctrine of election is based on the

rule of estoppel—the principle that one cannot approbate and

reprobate is inherent in it. The doctrine of estoppel by election is one

among the species of estoppel in pais (or equitable estoppel), which

is a rule of equity. By this law, a person may be precluded, by way of

his actions, or conduct, or silence when it is his duty to speak, from

asserting a right which he would have otherwise had.‖

xxx xxx xxx‖

(Emphasis Supplied)

32. Likewise, holding that an agreement to extend the time period for

performance of a contract need not necessarily be reduced to writing, and

may be proved by oral evidence or conduct of parties, including forbearance,

the Supreme Court in the case of S. Brahmanand and Others Versus K. R.

Muthugopal (Dead) and Others

5

, has held as follows:

―xxx xxx xxx

34. Thus, this was a situation where the original agreement of 10-3-

1989 had a ―fixed date‖ for performance, but by the subsequent

letter of 18-6-1992 the defendants made a request for postponing the

performance to a future date without fixing any further date for

performance. This was accepted by the plaintiffs by their act of

forbearance and not insisting on performance forthwith. There is

nothing strange in time for performance being extended, even

though originally the agreement had a fixed date. Section 63 of the

Contract Act, 1872 provides that every promisee may extend time for

the performance of the contract. Such an agreement to extend time

need not necessarily be reduced to writing, but may be proved by oral

evidence or, in some cases, even by evidence of conduct including

forbearance on the part of the other party. [See in this connection the

observations of this Court in Keshavlal Lallubhai Patel v. Lalbhai

Trikumlal Mills Ltd., 1959 SCR 213 : AIR 1958 SC 512, para 8. See

also in this connection Saraswathamma v. H. Sharad Shrikhande, AIR

2005 Kant 292 and K. Venkoji Rao v. M. Abdul Khuddur Kureshi, AIR

1991 Kant 119, following the judgment in Keshavlal Lallubhai Patel

(supra).] Thus, in this case there was a variation in the date of

performance by express representation by the defendants, agreed to

by the act of forbearance on the part of the plaintiffs. What was

originally covered by the first part of Article 54, now fell within the

5

(2005) 12 SCC 764.

RFA 70/2019 Page 34 of 117

purview of the second part of the article. Pazhaniappa

Chettiyar v. South Indian Planting and Industrial Co. Ltd. [AIR

1953 Trav Co 161] was a similar instance where the contract when

initially made had a date fixed for the performance of the contract

but the Court was of the view that ―in the events that happened in

this case, the agreement in question though started with fixation of a

period for the completion of the transaction became one without

such period on account of the peculiar facts and circumstances

already explained and the contract, therefore, became one in which

no time was fixed for its performance‖ and held that what was

originally covered by the first part of Article 113 of the Limitation

Act, 1908 would fall under the second part of the said article because

of the supervening circumstances of the case.

xxx xxx xxx‖

(Emphasis Supplied)

33. Hence, the sequence of events that have transpired in the present case

is a clear pointer to the fact that the sellers never considered the Agreement

to Sell, as having been cancelled. Rather, the sellers affirmed and continued

with the transaction, by accepting payments even beyond the last date

envisaged under the Agreement to Sell, i.e., 20

th

June, 1989, and handing

over possession of the suit property to the purchasers.

34. The contention of the appellant that an alleged letter dated 23

rd

November, 1993, had purportedly been sent by Shri G.D. Krishan to

respondent no. 7 herein, seeking payment of balance sale consideration, has

to be rejected. The evidence on record clearly points that the receipt of said

letter was never proved by the appellant, nor was the said letter acted upon,

by the alleged sender.

35. The plaintiffs in the suit failed to furnish the original AD Card and

only produced a photocopy of the same, bearing a stamp of a ‗money order‘.

However, the contesting defendants led evidence of several witnesses from

the postal department, who confirmed that the postal department did not use

RFA 70/2019 Page 35 of 117

a money stamp, and only used a date stamp. No evidence to counter this

position, or to otherwise prove delivery, was led by the plaintiffs.

36. In this regard, reference may be made to the deposition of DW-2, i.e.,

Shri Jai Bhagwan, retired Sub-Post Master, who has categorically stated in

his Evidence Affidavit that the postal AD Card bears a ‗money order‘ stamp

which is not used on such cards and lacks proper postal stamping as there is

no date stamp on it. Thus, the said deposition clearly points out that the

postal AD Card with respect to the letter dated 23

rd

November, 1993, was not

genuine.

37. Further, DW-3, i.e., Shri Lalit Kumar, Postal Assistant, Passport Seva

Kendra, has deposed in his Evidence Affidavit that the ‗money order‘ stamp

on the AD card is not used on such cards, as only date stamps are applied.

He further denied that the money stamp can be affixed by postal authorities

by an error.

38. To similar effect, DW-4, i.e., Shri Surender Saha, Post Master, Kalkaji

Head Office, has deposed that the AD Card was not proper, as it bears an

incorrect pin-code. Further, he deposed categorically that a‗money order‘

stamp is not used on AD cards. He clarified that only metal date stamps are

used in post offices and not rubber stamps.

39. Likewise, DW-5, i.e., Shri Rajender Bahadur Singh, Post Master,

Naraina, Head Office has stated that the postal AD Card in support of letter

dated 23

rd

November, 1993, has a rubber stamp, whereas, only iron stamps

are used by the post office. He further deposed that a ‘REGD’ stamp is put in

AD Cards, which is missing in the AD card in question. Instead of a ‘REGD’

stamp, a ‗money order‘ stamp has been put, which is not normally used on

AD Cards.

RFA 70/2019 Page 36 of 117

40. Thus, the depositions of DW-2 to DW-5, clearly establishes that the

AD Card with regard to letter dated 23

rd

November,1993, was defective and

contained a ‗money order‘ stamp, which is inconsistent with standard postal

practice of using a date stamp. Accordingly, the Trial Court rightly held that

the acknowledgment of the letter dated 23

rd

November, 1993, has not been

proved.

41. Even otherwise, it was admitted by the appellant that Shri G.D.

Krishan never took any steps on the basis of the alleged letter dated 23

rd

November, 1993, though he remained alive for almost six years post the

purported letter. Thus, the reliance by the appellant on the said letter

becomes immaterial.

42. It is also undisputed that none of the sellers ever took any action, be it

by sending a letter or notice or filing a suit against the purchasers,

respondent nos. 1 to 8. Pertinently, in this regard, in her cross-examination,

the appellant has categorically deposed as follows:

RFA 70/2019 Page 37 of 117

RFA 70/2019 Page 38 of 117

43. Perusal of the aforesaid deposition of the appellant clearly brings to

the fore that the sellers never initiated any action against the purchasers, with

respect to either recovery of any balance amount or possession of the suit

property. Further, when the appellant asked the other two original sellers,

i.e., respondent nos. 9 and 10 herein, to join in filing the suit, they refused to

join the appellant in the present suit.

44. The evidence on record points out that the transaction in question for

sale of the suit property was executed and validly concluded by the original

sellers. The sellers conducted themselves in a manner from which only one

conclusion can be drawn, i.e., that full sale consideration was received to

their satisfaction, in a mode and manner acceptable to them. Therefore, it is

RFA 70/2019 Page 39 of 117

apparent that the sellers clearly considered the transaction as a concluded

one.

45. When the sellers and purchasers under the Agreement to Sell never

treated the same as being cancelled, and where the sellers, including the

mother of the appellant herein, have not asserted that any sale consideration

remained due, the appellant cannot contend that the Agreement to Sell stood

cancelled. In the garb of stepping into the shoes of her mother, who was one

of the original sellers, the appellant cannot seek to turn the clock back and

challenge a transaction which to the understanding of all the signatories to

the Agreement to Sell and GPA, had duly concluded/affirmed, and further

been reaffirmed by the conduct of all the parties.

46. Thus, the bare contention of the appellant, unsupported by any

evidence, after a passage of 11 years, that the Agreement to Sell stood

cancelled, has to be necessarily rejected.

b. Plea regarding payment of balance sale consideration raised by

appellant viz.-a-viz. plea of oral understanding raised by respondent

nos. 1 to 8/purchasers

47. The next question which arises for consideration before this Court is

as to whether it has been established that the balance amount towards the

sale consideration under the Agreement to Sell, has not been paid by the

purchasers, thereby, entitling the appellant to any relief.

48. With regard to the present issue, it is the stand of the purchasers, that

the parties had arrived at an oral understanding that the purchasers shall take

all steps required to recover the possession of the tenanted portion of the suit

property from the tenants, and any payments made by the purchasers to the

RFA 70/2019 Page 40 of 117

tenants in this regard, shall be adjusted towards the payment of balance sale

consideration.

49. In contrast, the appellant has contended that there was no oral

understanding between the sellers and the purchasers, and the receipts dated

01

st

August, 1989 and 03

rd

August, 1989 categorically record that the balance

sale consideration was payable at the time of registration of Sale Deed.

50. Rebutting the same, respondent nos. 1 to 8 have asserted that the oral

understanding could not be recorded under the Agreement to Sell, the GPA

or the payment receipts, since the exact amount required to be paid to the

tenants for vacating the suit property could not have been contemplated by

the parties at the time of execution of these documents.

51. In essence, the issue before this Court is whether there existed an oral

understanding between the sellers and the purchasers, with respect to

adjusting the payments made to the tenants against the balance sale

consideration.

52. In this regard, law is settled that whether there existed an oral

understanding or not is a question of fact, and has to be determined in the

facts and circumstances of each individual case. Thus, in the case of Brij

Mohan and Others Versus Sugra Begum and Others

6

, it has been held as

follows:

―xxx xxx xxx

20. We have given our careful consideration to the arguments advanced

by learned counsel for the parties and have thoroughly perused the

record. We agree with the contention of the learned counsel for the

appellants to the extent that there is no requirement of law that an

agreement or contract of sale of immovable property should only be in

writing. However, in a case where the plaintiffs come forward to seek a

6

(1990) 4 SCC 147.

RFA 70/2019 Page 41 of 117

decree for specific performance of contract of sale of immovable

property on the basis of an oral agreement alone, heavy burden lies on

the plaintiffs to prove that there was consensus ad idem between the

parties for a concluded oral agreement for sale of immovable property.

Whether there was such a concluded oral contract or not would be a

question of fact to be determined in the facts and circumstances of each

individual case. It has to be established by the plaintiffs that vital and

fundamental terms for sale of immovable property were concluded

between the parties orally and a written agreement if any to be executed

subsequently would only be a formal agreement incorporating such

terms which had already been settled and concluded in the oral

agreement.

xxx xxx xxx‖

(Emphasis Supplied)

53. In order to prove the existence of the oral understanding between the

sellers and the purchasers, DW-1, i.e., Shri U.S. Sitani in his Evidence

Affidavit, has deposed as under:

―xxx xxx xxx

10.⁠ ⁠The receipt dated 03.08.1989 further states that the balance sale

consideration shall be paid at the time of registration of sale deed, and

that an irrevocable power of attorney in favour of the Deponent stands

executed. Vide the Agreement to Sell, it was agreed between the parties

that the purchaser i.e. the Defendants would pay another sum of Rs.

62,40,000/-and vacant physical possession was to be delivered

subsequent to payment of the said sum. However, at the stage of

issuance of the receipt dated 03.08.1989, the new understanding that

was arrived at between the parties was that any payments made by

the purchasers to the tenants, for having the property vacated, and/

or other payments made by the purchasers, for or on behalf of the

sellers, to statutory authorities such as L&DO etc., would be adjusted

against the final sale consideration payable to the sellers. That is the

reason why, although the said sum of Rs. 62.40 lakhs was not as yet

received by the sellers, vide the receipt dated 03.08.1989, the

possession was officially transferred on the said date.As on

03.08.1989, the clear understanding between the parties was that any

further consideration was payable to the sellers, only subject to, and

after adjusting payments made towards the tenant and/ or other

payments made on behalf of the sellers to statutory authorities such

as L&DO. In view of the fact that the exact amounts which the

purchasers may be required to pay on behalf of the sellers was not

RFA 70/2019 Page 42 of 117

known on 03.08.1989, the balance sale consideration remaining

payable was not specified. It is for this reason that the receipt also

notices that the Agreement to sell dated 24.01.1989 stands modified, to

the extent that possession stands transferred. This understanding is

also clear from a reading of the General Power of Attorney executed

on the same date (03.08.1989) which virtually transferred all the

rights qua the property to the Defendant Nos. 1-8.

xxx xxx xxx

13. That thereafter, the Defendants no. 1 to 8, on 24.02.1990 got the

physical vacant possession of the tenanted portion of the suit

property from M/s. Bhardwaj Bhardwaj and Associates (i.e. the

tenants) against a payment of Rs. 25,00,000 and Rs. 20,00,000 for

the ground and first floor of the suit property respectively. That the

said possession w/ taken from the tenants under two separate

receipts, both dt. 24.02.1990. The said receipts are Exhibited as DW-

1/11 and DW-1/12 respectively.

xxx xxx xxx‖

(Emphasis Supplied)

54. As per the aforesaid deposition, the oral understanding was arrived at

the time of the receipt dated 03

rd

August, 1989, whereby, any payments made

by the purchasers to the tenants for having the suit property vacated, would

be adjusted against the final sale consideration payable to the sellers. Thus,

as per the case put forth by the purchasers, there was a clear understanding

that any further consideration would be payable to the sellers, only after

adjusting the payments made by the purchasers to the tenants and to

statutory authorities such as L&DO. Since the exact amount which the

purchasers would have been required to pay in this regard was not known,

the exact amount of sale consideration remaining payable, was not specified

in the receipt dated 03

rd

August, 1989.

55. Further, the statement of DW-1 during his cross-examination dated

10

th

September, 2018, is reproduced as under:

RFA 70/2019 Page 43 of 117

―xxx xxx xxx

xxx xxx xxx‖

56. Perusal of the cross-examination clearly shows that the testimony of

the DW-1 remained unshaken during his cross-examination. This Court

RFA 70/2019 Page 44 of 117

further notes that none of the sellers who were alive at that time, i.e., Shri

Rajiv Luthra and Shri Sanjeev Sethi entered the witness box to controvert

the testimony of DW-1, i.e., Shri U.S. Sitani with respect to the oral

understanding.

57. ⁠Further, it is to be noted that Clause 4 of the Agreement to Sell states

that the sellers had to deliver possession of the suit property to the

purchasers against the payment of Rs. 62.40 Lacs and call upon the tenants

to attorn to the purchasers. This Court finds force in the contention of the

respondent nos. 1 to 8 that although the entire sum of Rs. 62.40 Lacs had not

been received by the sellers as on 03

rd

August, 1989, the sellers executed the

receipt dated 03

rd

August, 1989, and transferred the vacant physical

possession of the self-occupied portion and the symbolic possession of the

tenanted portion of the suit property to the purchasers, in lieu of the oral

understanding between the parties, as aforesaid.

58. Had there been no such oral understanding, there would have been no

occasion for the sellers to transfer the possession of the suit property to the

purchasers, and modify the Agreement to sell to such extent.

59. This Court also notes that the sellers executed the GPA on 03

rd

August,

1989 in favor of the respondent no. 7. The appellant in her Evidence

Affidavit has categorically admitted that the GPA, marked as Ex. PW-1/4,

had been executed to facilitate the handing over of the possession of the suit

property to the purchasers, respondent nos. 1 to 8 herein, in terms of Clause

4 of the Agreement to Sell. The relevant portion of the Evidence Affidavit of

the appellant herein, is reproduced as under:

RFA 70/2019 Page 45 of 117

―xxx xxx xxx

xxx xxx xxx‖

RFA 70/2019 Page 46 of 117

60. A perusal of the GPA shows that wide sweeping powers were

conferred by the sellers in favor of the respondent no. 7, such as to carry

construction, to create lease, execute sale agreements, to deal with statutory

authorities with respect to the suit property, etc. Had there been no oral

understanding between the sellers and the purchasers, there would have been

no occasion for the sellers to grant such wide sweeping powers to respondent

no. 7 under the GPA, especially, when allegedly, almost half of the sale

consideration remained pending. In this regard, some important

authorizations given under the GPA dated 03

rd

August, 1989, as taken note

of by the learned Trial Court in paragraph 27 of the impugned judgment, are

reproduced as under:

―xxx xxx xxx

RFA 70/2019 Page 47 of 117

xxx xxx xxx‖

RFA 70/2019 Page 48 of 117

61. It is in line with the oral understanding that the purchasers paid a sum

of Rs. 45 Lacs to the tenants on 24

th

February, 1990, by way of multiple

Demand Drafts as recorded in the two receipts dated 24

th

February, 1990,

acknowledging payments of Rs. 25 Lacs and Rs. 20 Lacs, and marked as

Ex.DW-1/11 and Ex.DW-1/12, respectively.

62. It is undisputed that the tenants handed over possession of the suit

premises under their possession to the purchasers as far back as the year

1989. The purchasers have continued with the possession of the entire suit

property even at the time of filing of the suit in the present case in the year

1999, and till date. There is nothing on record that there was any protest by

the sellers as to why the tenants had handed over possession to the

purchasers. Moreover, even the appellant has admitted that the

purchasers/respondent nos. 1 to 8, have not taken the possession forcibly.

Further, the purchasers had been paying the statutory dues with respect to the

suit property.

63. This Court also notes that the sellers accepted Demand Draft on 25

th

April, 1990 for a sum of Rs. 8,23,646.72/- from the purchasers, and

submitted the same to the L&DO for revocation of re-entry proceedings.

This conduct of the sellers in accepting the money from the purchasers for

the purpose of depositing the same with the L&DO, is again in line with the

case put forward by the purchasers as regards an oral understanding between

the parties regarding payments to be made to the tenants and statutory

authorities, as set off against the balance sale consideration. The conduct of

the sellers in transferring possession, allowing the tenants to hand over the

vacant possession of the part of the premises occupied by them to the

purchasers, taking steps for revocation of the re-entry proceedings, and not

RFA 70/2019 Page 49 of 117

raising any dispute or demand for any pending amount, makes it evident that

they were satisfied with the consideration they received and accepted it as

full payment with respect to the suit property.

64. Reference may also be made to the judgment in the case of S.V.

Narayanaswamy Versus Smt. Savitharamma, since deceased by her LRs.

and Others

7

, wherein, it has been held that the oral agreement stood proved

on the basis of the possession of the property in question by the appellant

therein and documents regarding payment of statutory dues, etc. Thus, it was

held as follows:

―xxx xxx xxx

92. There is no merit in the contention that the appellant has not

pleaded oral sale agreement. The appellant has pleaded all the

ingredients of the oral sale agreement i.e., the date of sale agreement,

the property agreed to be sold, the consideration, the amount paid, the

mode of payment, delivery of possession, putting up of construction,

demand to execute the sale deed, readiness and willingness to perform

his part of the contract. Therefore, there is no merit in the contention

that oral sale agreement is not pleaded. The pleadings conform to

form No. 47 and 48 of 1

st

schedule to CPC and Section 16 of the

Specific Relief Act.

93. The respondents contend that they are in possession and

enjoyment of the suit schedule property. They have produced Ex. P1

khatha certificate, Ex. P2 assessment register extract, Ex. P3 death

certificate of Venkatanarasimhaiah, Ex. P4 certified copy of the

lease cum sale agreement, Ex. P5 certified copy of the sale deed,

Ex.P6 copy of legal notice, exhibits P7 to P13, P15 and P16 tax paid

receipts, Ex. P14 copy of the order in disciplinary proceedings

against the appellant and others. Ex. P17 is the certified copy of the

order passed on issue No. 4. Ex. P18 is the certified copy of the

decree in O.S. No. 1920/1989.

94. The appellant contends that he was put in possession of the suit

schedule property pursuant to the sale agreement dated 17.12.79 and

the documents were handed over to him. The appellant has produced

possession certificate and the documents which were handed over to

7

2013 SCC OnLine Kar 7650.

RFA 70/2019 Page 50 of 117

him. PW.1 has deposed that the original possession certificate, lease

cum sale agreement and other documents pertaining to the suit

schedule property were given to the appellant as he was a GPA

holder. DW.1 and DW.2 have deposed that the documents were

handed over to the appellant on the date of sale agreement i.e., on

17.12.1979. There is no mention in the power of attorney Ex. D1 that

the documents were handed over to the appellant at the time of

executing Ex. D1 power of attorney. Therefore, it is clear, the

documents were handed over pursuant to the sale agreement dated

17.12.1979.

95. Thereafter, the appellant has obtained sanctioned plan as per Ex.

D.9. The documents produced by the appellant i.e., exhibits D.36 to

D.67 clearly show that the appellant has purchased construction

material and spent considerable amount to put up construction.

Exhibits D.36 to D.67 are receipts and cash bills for having purchased

cement, steel, boulders, stones, sand, jelly, bricks, tiles, borewell and

labour charges. The respondents have pleaded that the construction

was put up by late Venkatanarasimhaiah. PW. 1 has deposed that they

have put up construction in the suit property at their cost. The

respondents have not produced anything to show that the respondents

or late Venkatanarasimhaiah had put up construction or spent money

to put up construction or participated in the construction work.

Therefore, it is clear, the construction was put up by the appellant and

he has spent money. The claim of the respondents that they have put up

construction is baseless and cannot be accepted. The documents

produced by the appellant and the oral evidence on record clearly

show that the appellant was put in possession of the property by

virtue of the oral sale agreement dated 17.12.79 and he has put up

construction by spending considerable amount. The contention that

the respondents are in possession of the suit schedule property

cannot be accepted.

96. It is contended that Ex. D1 GPA dated 3.2.1982 was executed by A.

Venkatanarasimhaiah in favour of the appellant only for the purpose

of putting up construction. The appellant has acted only as an agent.

The GPA is not coupled with interest. It is determined by death.

Reliance was placed on the decision reported in 1993 (3) Kar. LJ page

331.

97. In Mohammed alias Podiya Beary v. AC, Puttur [1993 (3) Kar.

LJ page 331], this Court has held, a power of attorney is an

authority whereby one is authorised to act for another. Where all the

rights and liabilities under a contract were made over by a power of

attorney, such power is an agency coupled with interest. An authority

RFA 70/2019 Page 51 of 117

coupled with interest is not determined by death, insanity or

bankruptcy of the principal. Power of attorney is ordinarily

construed strictly and general powers are interpreted in the light of

the special powers.

xxx xxx xxx

99. It is clear from the terms of GPA, the appellant has been

authorised to put up construction, to obtain license, to pay tax, to

apply for necessary permits, to get cement, steel etc., to enter into an

agreement or agreements to lease out, to realise rent, to manage,

supervise and direct construction, to pay after construction house

tax, light and water charges, to attend repairs or alteration, and to

defend all actions. Clause No. 15 of the GPA provides that the

executant i.e., Venkatanarasimhaiah shall not revoke the GPA until

such time that his attorney voluntarily seeks for such revocation. It

is clear, the GPA cannot be revoked until such time the appellant

seeks for its revocation. Therefore, it cannot be said that the GPA

was given only for the purpose of putting up construction. The GPA

authorises the appellant to enter into agreement, to lease out the

property, to attend to repairs and alteration, to pay tax and other

charges after construction. The GPA cannot be revoked until such

time the appellant voluntarily seeks for its revocation. Therefore, the

contention of the respondents that the GPA was given only for the

purpose of construction cannot be accepted and accordingly, it is

rejected.

100. The appellant is not claiming possession based on the GPA. The

appellant claims possession based on the oral sale agreement dated

17.12.1979. According to the appellant, he was put in possession on

17.12.1979 and documents were handed over. The appellant has

produced the documents handed over to him. DWs. 1 to 3 have

deposed regarding the oral sale agreement. The evidence of DWs. 1

to 3 coupled with admission of PW-1 clearly show that there was oral

sale agreement dated 17.12.1979 between the appellant and

Venkatanarasimhaiah and the entire sale consideration amount of

Rs. 16,000/- has been paid. The respondents contend that they are in

possession of the suit schedule property. But, the documents

produced by the appellant clearly show that he is in possession of the

suit schedule property and he has put up construction by spending

considerable amount.

101. Ex. D2 is the copy of the letter dated 22.4.1986 written by the

2

nd

respondent to the Spl. D.C., Urban Ceiling Bangalore requesting

to permit to sell the site. Ex.D2(a) is the signature of the

2

nd

respondent. Ex.D3 is the xerox of the notice under Section 26 of the

Urban Ceiling Regulation Act, 1976. Ex. D4 is the copy of the affidavit

RFA 70/2019 Page 52 of 117

of A. Venkatanarasimhaiah in support of Ex. D3. Ex. D5 is the

endorsement. PW-1, in his evidence has denied his signature in Ex.

D2. DW-1 has deposed that Ex. D2 was handed over to him by the

2

nd

respondent and he has identified the signature of the

2

nd

respondent in Ex. D2 as Ex. D2(a). Ex. D3 and Ex. D4 are not

authenticated documents. Ex. D5 is the endorsement dated 25.4.1986

stating that notice issued under ULC(2) SR.607/85-86 dated 27.2.1986

is cancelled. Ex. D2 is the copy of the letter sent to the Urban Ceiling

Authority. It bears the signature of the 2

nd

respondent. The

2

nd

respondent i.e., PW.1 has denied his signature in Ex.D2 evasively

stating that Ex. D2(a) is not his signature because in Ex. D2 the

appellant is shown as his uncle, but, actually the appellant is not his

uncle. He has stated, he does not know whether his father had filed

application seeking permission to sell the property. He does not

remember whether the document shown to him is the endorsement

received by him from the Spl. D.C. ULC, Bangalore. Ex. D2 shows that

request was made to the ULC, Authority, Bangalore to sell the

property.

102. Exhibits D21, D22, D23, D25, D26 and D27 are copies of the

statements of assets and liabilities for the years 1983, 1984, 1985,

1988 and 1989 submitted by the appellant to the concerned authority.

In the said statements, the appellant has shown that the suit schedule

property belongs to him. However, exhibits D21, D22, D23, D25, D26

and D27 are not authenticated documents. Therefore, they cannot be

relied upon.

103. Exhibits D33, D34 and D35 are the letters addressed to the

appellant. In exhibits D33 and D34 the address shown is No. 106,

Koramangala, Bangalore, i.e., the suit schedule property.

104. Ex. D9 is the sanctioned plan obtained by the appellant. Ex. D11

is the cement allotment card. It is in the name of the appellant. Ex.

D19 is cash memo for having purchased cement. Exhibits D36 to D67

are the receipts and cash bills. They show that the appellant has

purchased the building material like cement, steel, boulders, stones,

sand, jelly, bricks, tiles and dug borewell and paid labour charges.

105. From the evidence on record, it is clear, that there was an oral

sale agreement between the appellant and A. Venkatanarasimhaiah

on 17.12.1979. Thereafter, Ex. D1 GPA has been executed on

3.2.1982. The appellant has put up construction after obtaining

sanctioned plan. The amount is spent by the appellant. The sale

consideration amount except Rs. 1,500/- has been paid through

cheque. A sum of Rs. 1,500/- has been paid in cash. Thus, the entire

sale consideration amount has been paid. The appellant has proved

RFA 70/2019 Page 53 of 117

oral sale agreement dated 17.12.1979. Point No. 1 answered

accordingly holding that the appellant has proved oral sale

agreement dated 17.12.1979.

xxx xxx xxx‖

(Emphasis Supplied)

65. It is also pertinent to note that while rejecting the application filed by

the appellant herein, seeking a judgment under Order XII Rule 6 of the CPC,

this Court vide judgment dated 08

th

November, 2011, had observed as under:

―xxx xxx xxx

15. It is not in dispute that payments have been made to the tenants

by cheque. It is also not in dispute that tenants handed over

possession to the defendants as far back from the year 1989 till the

date of filing of the present suit i.e. in the year 2008. There was no

protest on the part of the plaintiffs as to why tenants had handed

over possession to the defendants nor any steps were taken by the

plaintiffs to safeguard their rights.

16. I have also carefully perused the General Power of Attorney,

which has been placed on record, which would prima facie show

that wide and extensive powers have been given to the defendants

and plaintiffs had for all intents and purposes severed all their rights

with respect to the suit property. The powers include the right to

reconstruct and right to sell. Prima facie reading of the General

Power of Attorney would show that the entire sale consideration has

been paid or else no ordinary prudent man would execute such a

Power of Attorney. This is also to be considered in the light of the

fact that plaintiffs considered it appropriate to hand over possession

of the suit property to the defendants and in case less than 50% of

the amount has been received by them there would have been no

occasion either to have executed such a Power of Attorney with such

sweeping powers or to put the defendants in possession of the suit

property. There is also no explanation much less a reasonable

explanation as to why the plaintiffs allowed the defendants to take

possession of the property from the tenants in case the sale

consideration was not paid. It has also not been explained as to why

during the life time of the original sellers no action was initiated by

them or the plaintiffs as according to the plaintiffs more than 50% of

the sale consideration was not paid to them. Applying the law laid

down by the Apex Court to the facts of this case and having regard to

the stand taken by the defendants in the written statement it cannot be

said that defendants have admitted that they have not paid the entire

RFA 70/2019 Page 54 of 117

sale consideration to the plaintiffs. It is also not in dispute that

besides payments to the tenants, all of which fortunately have been

paid by means of cheques, the defendants have also paid a sum of

Rs.8.23 lakhs to L&DO to enable L&DO to withdraw the notice of

re-entry. The judgment, sought to be relied upon by learned senior

counsel for the plaintiffs in the case of FGP Limited (supra), is not

applicable to the facts of the present case as in the present matter as

per the defendants the entire sale consideration stands paid by them.

The question, whether the defendants were authorized to make the

payments or not, can only be decided on the basis of evidence.

xxx xxx xxx‖

(Emphasis Supplied)

66. In concurrence with the aforesaid findings of the learned Single Judge,

the Division Bench of this Court vide judgment dated 30

th

July, 2012 in

FAO(OS) 139/2012, upheld the judgment dated 08

th

November, 2011 in the

following manner:

―xxx xxx xxx

2. The agreement to sell records that the six companies who were

acting through their Directors U.S.Sitani and Leela Sitani, impleaded

as defendants No.7 and 8 in the suit, would pay ₹80,70,000/- as sale

consideration for sale of the house. It records Nirmal Krishan, Rajiv

Luthra and Sanjiv Sethi having received ₹10,50,000/- and envisages

that upon clearance being obtained under the Income Tax Act within

six months the six companies would pay another sum of ₹62,40,000/-

and the balance sum of ₹7,80,000/- would be paid when sale deed

would be executed. It stands further recorded that simultaneously upon

receipt of ₹62,40,000/- the sellers shall deliver vacant physical

possession of such portion of the house which was self-occupied and

symbolic possession of the rented portion to the buyers. The document

records that the property had been re-entered by the lessor and

envisages the purchasers to have the re-entry cancelled and such

amount as was payable to the lessor would be paid by the purchasers,

but the samewould be adjustable from the amount payable to the

sellers.

3. On August 03, 1989 Nirmal Krishan, Sanjiv Sethi and Rajiv

Luthra executed a General Power of Attorney in favour of

U.S.Sitani, describing him as the nominee of the six purchaser

companies; and under the General Power of Attorney empowered

him to deal with the property and do acts, which an owner could

RFA 70/2019 Page 55 of 117

perform i.e. demolish the existing construction and reconstruct a

building, let out the property and even sell the same. And on the

same day handed over possession of such portions of the property as

were with Nirmal Krishan, Sanjiv Sethi and Rajiv Luthra and wrote

to the tenant to attorn to the purchasers. Thereafter the six

companies paid money to the tenant to vacate such portions of the

property as were tenanted, and in all paid ₹45,00,000/- to the tenant.

4. Since August 03, 1989 possession of the entire property remained

with the purchasers, who paid ₹8,23,646.72 to the lessor for the re-

entry to be revoked.

5. Noting that the agreed sale consideration was ₹80,70,000/- and

out of which as per the agreement to sell ₹10,50,000/- was received

by the sellers, the stage for paying further sum of ₹62,40,000/- was

within six months of the execution of the agreement to sell on

January 24, 1989 and that left balance sale consideration in sum of

₹7,80,000/-, to be paid, but from which amount such sum which the

purchasers had to pay to the lessor for revocation of the re-entry

notice had to be deducted, suffice would it be to state that if the

purchasers would have paid ₹62,40,000/-, no further amount was

payable to the sellers; rather it was the sellers who would have to

make a refund to the buyers inasmuch as the buyers paid

₹8,23,646.72 to the lessor.

6. Everything remained quiet till the appellants, Sunita Sinha and

her brother Arvind Krishan filed a suit on September 04, 2002 to

restrain defendants No.1 to 8 from using the property and for the

decree of possession.

7. In the written statement filed by defendants No.1 to 8, who we note

are the six purchasers companies and their two directors who

represented the companies, it was pleaded that the six companies are

the owners of the property having paid full sale consideration for the

same. It was pleaded that the suit filed in the year 2002 was highly

belated and was barred by limitation.

8. Now, as per the agreement to sell, the sale consideration in sum of

₹80,70,000/- had to be paid at three stages. Firstly when the

agreement to sell was executed. At this stage, ₹10,50,000/- was to be

paid; and was paid. The second stage was to pay ₹62,40,000/- within

six months. That left ₹7,80,000/- to be paid when sale deed was to be

executed, but from which such amount as was paid by the buyers to the

lessor for re-entry to be revoked had to be deducted. In the written

statement filed it was pleaded that the entire sale consideration was

paid, and suffice would it be to state that since ₹8,23,646.72 was

admittedly paid by the buyers to the lessor and further since

admittedly ₹10,50,000/- was paid to the sellers when the agreement to

RFA 70/2019 Page 56 of 117

sell was executed, the defence would succeed if the buyers could prove

having paid ₹62,40,000/- to the sellers, in respect whereof it has been

pleaded in the written statement that entire sale consideration was

paid.

9. It may be true that there is no specific plea in the written statement

as to when ₹62,40,000/- was paid; the general plea taken is that the

entire sale consideration was paid, and it is equally true that no

documentary evidence by means of a receipt, acknowledgement or

payment by a mode under which there would be proof that

₹62,40,000/- flowed from the coffers of the buyers to those of the

sellers has been filed, but one fact of importance needs to be noted

i.e. the agreement to sell dated January 24, 1989 recording that

₹62,40,000/- would be paid within six months and simultaneously

therewith vacant possession of such portion of the property as was

with the sellers would be parted with to the buyers and symbolic

possession of the rest would be given, and that just at the expiry of

six months of January 24, 1989 i.e. on August 03, 1989 possession of

such portions as were with the sellers was handed over to the buyers

as also symbolic possession of the tenanted portion was handed over.

10. The appellants i.e. the plaintiffs filed IA No.3759/2010 under

Order XII Rule 6 CPC praying for a decree on admission in which it

was pleaded that the defendants have admitted the agreement to sell in

question; have admitted having paid ₹10,50,000/- out of the agreed

sale consideration in sum of ₹80,70,000/- and that in the absence of a

specific pleading and further in the absence of any proof that the

defendants paid ₹62,40,000/-, it is apparent that the purchasers have

not acquired any title to the property and thus a decree should follow.

11. Dismissing the application the learned Single Judge has held that

a suit can be decreed under Order XII Rule 6 CPC if there is a clear

admission, and none has been found.

12. Suffice would it be for us to note that an admission by a party may

be relied upon by the opposite party through the medium of a pleading

or even otherwise. But the law is clear, the admission must be clear

and unequivocal.

13. We do not find any admission made by the defendants which

warrants a decree to follow. It may be true that the defendants have

not pleaded the date when they paid ₹62,40,000/- to the sellers and

further have no documentary proof to sustain said fact. But conduct of

a party is also relevant and admissible evidence. The plaintiffs will

have to explain the conduct of their mother along with the other two

co-owners handing over vacant possession of such portions of the

suit property as were with them to the buyers as also they giving

symbolic possession of the tenanted portion and permitting the

RFA 70/2019 Page 57 of 117

purchasers to pay money to the tenant for the tenant to vacate the

tenanted portion of the property. The plaintiffs would also have to

explain the conduct of their mother and the other two co-owners

executing a General Power of Attorney in favour of a director of the

six purchaser companies and authorizing him thereunder to sell the

property. The power of attorney has been executed just after six

months of the date when the agreement to sell was executed, and

relevant would it be to state that it is the case of the defendants that

when the power of attorney was executed on August 03, 1989

physical possession of the vacant portion and symbolic possession of

the tenanted portion was delivered. This is a matter of trial and

surely a matter of a good argument that from the fact that the

agreement to sell envisages ₹62,40,000/- to be further paid and

simultaneously possession handed over; from the fact that

possession was handed over would be proof that ₹62,40,000/- was

paid.The ominous silence for over 10 years has also to be explained,

and who says that silence has no sound, we remind ourselves of the

famous song : ‗The Sound of Silence‘ by Simon & Garfunkel.

14. On the subject of possession, notwithstanding there being no sale

deed executed in favour of the buyers, Section 53A of the Transfer of

Property Act needs to be noted. Possession by a purchaser can be

successfully defended against even the title holder of a property

upon proof that the possession is under an agreement to sell and sale

consideration has been paid.

xxx xxx xxx‖

(Emphasis Supplied)

67. From the evidence and documents on record, the conclusion is

inescapable that the appellant has been unable to explain the conduct of her

mother and the other two sellers in handing over possession of the suit

property, and authorizing respondent no. 7 under the GPA to sell the suit

property, and the silence and inaction of the sellers in raising any dispute,

whatsoever.

68. Accordingly, this Court is of the considered opinion that the fact of

oral understanding as pleaded by the purchasers/respondent nos. 1 to 8,

stands proved by the evidence on record and the conduct of the parties. The

appellant has been unable to rebut the said plea of the purchasers.

RFA 70/2019 Page 58 of 117

Pertinently, though, the purchasers set up the defence of oral understanding,

the same was not rebutted by the sellers by entering into the witness box and

deposing to the contrary, when two of the sellers, were defendants and party

to the suit.

69. It is a settled legal proposition that the Courts in a civil trial apply a

standard of proof governed by preponderance of probabilities. Proof of a

fact depends on the probability of its existence. The Court would balance the

conflicting probabilities concerning a fact situation. Upon weighing the

various probabilities, the Court would come to a conclusion as regards

preponderance in favour of existence of a particular fact. In this regard,

reference may be made to the judgment in the case of M. Siddiq (Ram

Janmabhumi Temple Case) Versus Mahant Suresh Das and Others

8

,

wherein, while delving on the aspect of preponderance of probabilities, it

was held as follows:

―xxx xxx xxx

The standard of proof

720. The court in a civil trial applies a standard of proof governed by

a preponderance of probabilities. This standard is also described

sometimes as a balance of probability or the preponderance of the

evidence. Phipson on Evidence formulates the standard succinctly :If

therefore, the evidence is such that the court can say ―we think it

more probable than not‖, the burden is discharged, but if the

probabilities are equal, it is not. [Phipson on Evidence.]

In Miller v. Minister of Pensions [Miller v. Minister of Pensions,

(1947) 2 All ER 372], Lord Denning, J. (as the Master of Rolls then

was) defined the doctrine of the balance or preponderance of

probabilities in the following terms : (All ER p. 373 H)

―(1) … It need not reach certainty, but it must carry a high degree

of probability. Proof beyond reasonable doubt does not mean

proof beyond the shadow of doubt. The law would fail to protect

8

(2020) 1 SCC 1.

RFA 70/2019 Page 59 of 117

the community if it admitted fanciful possibilities to deflect the

course of justice. If the evidence is so strong against a man as to

leave only a remote possibility in his favour which can be

dismissed with the sentence, ―of course it is possible, but not in

the least probable‖ the case is proved beyond reasonable doubt,

but nothing short of that will suffice.‖

(emphasis supplied)

721. The law recognises that within the standard of preponderance

of probabilities, there could be different degrees of probability. This

was succinctly summarised by Denning, L.J.

in Bater v. Bater [Bater v. Bater, 1951 P 35 (CA)], where he

formulated the principle thus: (p. 37)

―… So also in civil cases, the case must be proved by a

preponderance of probability, but there may be degrees of

probability within that standard. The degree depends on the

subject-matter.‖

(emphasis supplied)

722. The definition of the expression ―proved‖ in Section 3 of the

Evidence Act is in the following terms:

―3. … ―Proved‖.—A fact is said to be proved when, after

considering the matters before it, the court either believes it to

exist, or considers its existence so probable that a prudent man

ought, under the circumstances of the particular case, to act upon

the supposition that it exists.‖

723. Proof of a fact depends upon the probability of its existence.

The finding of the court must be based on:

723.1. The test of a prudent person, who acts under the supposition

that a fact exists.

723.2. In the context and circumstances of a particular case.

724. Analysing this, Y.V. Chandrachud, J. (as the learned Chief

Justice then was) in N.G. Dastane v. S. Dastane [N.G. Dastane v. S.

Dastane, (1975) 2 SCC 326] held : (SCC pp. 335-36, para 24)

―The belief regarding the existence of a fact may thus be

founded on a balance of probabilities. A prudent man faced

with conflicting probabilities concerning a fact situation will

act on the supposition that the fact exists, if on weighing the

various probabilities he finds that the preponderance is in

favour of the existence of the particular fact. As a prudent

RFA 70/2019 Page 60 of 117

man, so the court applies this test for finding whether a fact in

issue can be said to be proved. The first step in this process is

to fix the probabilities, the second to weigh them, though the

two may often intermingle. The impossible is weeded out at the

first stage, the improbable at the second. Within the wide range

of probabilities the court has often a difficult choice to make but

it is this choice which ultimately determines where the

preponderance of probabilities lies. Important issues like those

which affect the status of parties demand a closer scrutiny than

those like the loan on a promissory note: ‗the nature and

gravity of an issue necessarily determines the manner of

attaining reasonable satisfaction of the truth of the issue [ Per

Dixon, J. in Wright v. Wright, (1948) 77 CLR 191 (Aust).] , CLR

at p. 210‘; or as said by Lord Denning, ‗the degree of

probability depends on the subject-matter‘. In proportion as the

offence is grave, so ought the proof to be clear [Blyth v. Blyth,

1966 AC 643 : (1966) 2 WLR 634 : (1966) 1 All ER 524 (HL)],

All ER at p. 536‘. But whether the issue is one of cruelty or of

a loan on a pronote, the test to apply is whether on a

preponderance of probabilities the relevant fact is proved. In

civil cases this, normally, is the standard of proof to apply for

finding whether the burden of proof is discharged.‖

(emphasis supplied)

725. The Court recognised that within the standard of

preponderance of probabilities, the degree of probability is based on

the subject-matter involved.

xxx xxx xxx‖

(Emphasis Supplied)

70. As noted hereinabove, the case set up by the purchasers regarding oral

agreement has not been controverted by the original sellers, i.e., respondent

nos. 9 and 10 herein, and they never entered into the witness box before the

Trial Court to dispute the assertions regarding oral agreement by the

purchasers. In this regard, it would be fruitful to refer to the judgment in the

case of Chowdamma (D) by LR and Another Versus Venkatappa (D) by

LRs and Another

9

,wherein it has been held as follows:

9

2025 SCC OnLine SC 1814.

RFA 70/2019 Page 61 of 117

―xxx xxx xxx

54. This principle is neither novel nor uncertain. This Court

in Vidhyadhar v. Manikrao [1999 3 SCC 573] held thus:

―17. Where a party to the suit does not appear in the witness-box

and states his own case on oath and does not offer himself to be

cross-examined by the other side, a presumption would arise that

the case set up by him is not correct ….‖

55. The present case is a compelling invocation of the above principle.

Defendant No. 1, though physically present in the Court during the

trial, abstained from stepping into the witness box to rebut the

plaintiffs' assertions — assertions that strike at the very core of the

dispute. In the absence of cogent medical evidence to support her

alleged incapacity, her abstention from the witness box constitutes

deliberate circumvention of the evidentiary burden resting upon her.

56. In the present factual matrix, the adverse presumption under

Section 114(g) of the Evidence Act is inevitable.

57. This Court cannot overlook that defendant No. 1, while central to

the controversy, chose not only to abstain from entering the witness

box but also wilfully bypassed the statutory remedy available to those

pleading physical incapacity.

58. Order XXVI, Rule 1 of the Civil Procedure Code, 1908, permits

the recording of evidence through a commission in cases of age or

infirmity. Yet, no application was filed invoking the said provision,

nor was any explanation tendered for its non-invocation. In a

dispute where the foundational facts lie squarely within her

exclusive knowledge, such omission assumes critical significance.

Her refusal to depose, despite the existence of a procedural

safeguard specifically tailored to her alleged condition, cannot be

dismissed as inadvertent. Rather, it reflects a conscious evasion from

the evidentiary process, compounded by her unexplained failure to

avail an accessible legal alternative, is not a neutral act. It

constitutes wilful shielding from judicial scrutiny.

59. A Court of law cannot offer refuge to studied silence where a

duty to disclose exists. The plaintiffs anchored their claim in

measured and unwavering testimony of P.W.2 (Hanumanthappa), an

account rooted in personal knowledge and long-standing familiarity,

which withstood the rigours of cross-examination. His evidence,

unshaken and consistent, found further corroboration in the

genealogical chart presented by the plaintiffs. It, therefore, stands

established that the plaintiffs have discharged the evidentiary burden

imposed upon them by law. In contrast, the defendants, bereft of

probative material or candour, resorted solely to denials. When

RFA 70/2019 Page 62 of 117

measured against the touchstone of preponderance of probabilities,

the scales unambiguously tilt in favour of the plaintiffs.

xxx xxx xxx‖

(Emphasis Supplied)

71. Reference may also be made to the case of Heinz India Private

Limited and Another Versus State of Uttar Pradesh and Others

10

, wherein,

the Supreme Court dealt with the standard of proof in civil action and

elucidated on the concept of standard of proof governed by preponderance

of probabilities. Thus, it was held as follows:

―xxx xxx xxx

43. In England, the civil standard of proof is defined by Lord

Denning in Miller v. Minister of Pensions [(1947) 2 All ER 372]

thus: (All ER p. 373 H)

―(1) … It need not reach certainty, but it must carry a high degree

of probability. Proof beyond reasonable doubt does not mean

proof beyond the shadow of doubt. The law would fail to protect

the community if it admitted fanciful possibilities to deflect the

course of justice. If the evidence is so strong against a man as to

leave only a remote possibility in his favour which can be

dismissed with the sentence ‗of course it is possible, but not in the

least probable,‘ the case is proved beyond reasonable doubt, but

nothing short of that will suffice.‖

44. Three years later came Bater v. Bater [1951 P 35 at p. 37 :

(1950) 2 All ER 458 (CA)] in which the civil standard of proof was to

an extent modified, was seen by some jurists as somewhat confusing

the concept so clearly stated in Miller case [(1947) 2 All ER 372].

In Bater [1951 P 35 at p. 37 : (1950) 2 All ER 458 (CA)] the Court

declared that neither civil nor criminal standard of proof was an

absolute standard. A ―civil case‖ may be proved by a preponderance

of probability, explained Denning, J.: (Bater case [1951 P 35 at p. 37:

(1950) 2 All ER 458 (CA)], All ER p. 459)

―… but there may be degrees of probability within that standard.

The degree depends on the subject-matter. A civil court, when

considering a charge of fraud, will naturally require a higher

degree of probability than that which it would require if

10

(2012) 5 SCC 443.

RFA 70/2019 Page 63 of 117

considering whether negligence were established. It does not

adopt so high a degree as a criminal court, even when it is

considering a charge of a criminal nature, but still it does require

a degree of probability which is commensurate with the

occasion.‖

45. Then came Hornal v. Neuberger Products Ltd. [(1957) 1 QB 247 :

(1956) 3 WLR 1034 : (1956) 3 All ER 970 (CA)] where the Court held

that: (QB p. 247)

―In a civil action where fraud or other matter which is or may be

a crime is alleged against a party or against persons not parties to

the action, the standard of proof to be applied is that applicable in

civil actions generally, namely, proof on the balance of

probability, and not the higher standard of proof beyond all

reasonable doubt required in criminal matters; but there is no

absolute standard of proof, and no great gulf between proof in

criminal and civil matters; for in all cases the degree of

probability must be commensurate with the occasion and

proportionate to the subject-matter. The elements of gravity of an

issue are part of the range of circumstances which have to be

weighed when deciding as to the balance of probabilities.‖

xxx xxx xxx‖

(Emphasis Supplied)

72. It is also pertinent to refer to the definition of ‘proved’ as given in

Section 3 of the Evidence Act, which deals with the interpretation clause.

Thus, ‘proved’, has been defined in the following manner:

――Proved‖.––A fact is said to be proved when, after considering

the matters before it, the Court either believes it to exist, or

considers its existence so probable that a prudent man ought,

under the circumstances of the particular case, to act upon the

supposition that it exists.‖

(Emphasis Supplied)

73. Thus, considering the oral and documentary evidence on record and

by applying the standard of preponderance of probabilities, this Court is of

the opinion that the purchasers have ‘proved’ that there existed an oral

understanding between the sellers and the purchasers.

RFA 70/2019 Page 64 of 117

74. The contention of the appellant that the alleged payments by the

purchasers/respondent nos. 1 to 8, to the tenants is hit by Sections 91 and 92

of Evidence Act, since the GPA as well as the receipt, although being

subsequent documents to the alleged oral understanding, do not record

anything about the oral understanding or about the payment to tenants to

secure relinquishment of tenancy, is misplaced.

75. Section 92 of the Evidence Act provides that where the terms of the

contract have been proved according to Section 91, no evidence of any oral

agreement or statement shall be admitted for the purposes of contradicting,

varying, adding to, or subtracting from its terms. The question that arises in

the present appeal is whether the respondent nos. 1 to 8 were barred from

proving the existence of an oral understanding between the sellers and

purchasers under Section 92 of the Evidence Act.

76. In this regard, it would be apposite to refer to the provision of Section

92 of the Evidence Act and Provisos 2 and 6 to Section 92, which are

relevant for the present case. The same are reproduced as under:

―92.⁠ ⁠Exclusion of evidence of oral agreement.—When the terms of

any such contract, grant or other disposition of property, or any

matter required by law to be reduced to the form of a document,

have been proved according to the last section, no evidence of any

oral agreement or statement shall be admitted, as between the parties

to any such instrument or their representatives in interest, for the

purpose of contradicting, varying, adding to, or subtracting from, its

terms:

xxx xxx xxx

Proviso (2) —The existence of any separate oral agreement as to any

matter on which a document is silent, and which is not inconsistent

with its terms, may be proved. In considering whether or not this

proviso applies, the Court shall have regard to the degree of

formality of the document.

RFA 70/2019 Page 65 of 117

xxx xxx xxx

Proviso (6).—Any fact may be proved which shows in what manner

the language of a document is related to existing facts.

xxx xxx xxx

(Emphasis Supplied)

77. Section 92 of Evidence Act provides that where the terms of a (i)

contract, (ii) grant, (iii) or, other disposition of property, or (iv) a matter

required to be reduced in the form of a document, are proved in accordance

with Section 91 of Evidence Act, then evidence of any oral agreement to

contradict, vary, add or subtract from the said terms, is barred.

78. Further, Proviso 2 of Section 92 carves an exception from the main

principle under Section 92 of the Evidence Act. Proviso 2 provides that

existence of any separate oral agreement can be proved, provided the

document is silent on that matter, and there is no inconsistency with the

terms of the document. In this regard, reference is made to the judgment in

the case of K. Manoharan Versus T. Janaki Ammal

11

, wherein, it has been

held as follows:

―xxx xxx xxx

27.⁠ ⁠When the terms of transaction which reduced into writing, it is

not possible to lead evidence to contradict its terms in view of Section

91 of Indian Evidence Act. As per Section 92 of Indian Evidence Act,

extrinsic parol evidence contradicting, varying adding to or

subtracting from the terms of a solemn written instrument is

inadmissible. This is because the parties have reduced into writing

their agreement, it must be presumed that they have put into writing

all that they considered necessary to give full expression to their

meaning yard intention. As between parties to an instrument oral of

intention is not admissible for the purpose either of construing deeds

or of proving the intention of the parties.

11

2012 SCC OnLine Mad 1261.

RFA 70/2019 Page 66 of 117

28.⁠ ⁠Even though no extrinsic evidence is admissible in substitution

for the written document, there are exceptions to the Rule in Section

92 of Indian, Evidence Act. Proviso (2) to Section 92 of Indian

Evidence Act reads as under:

―Proviso (2).— The existence of any separate oral agreement

as to any matter on which a document is silent, and which is

not inconsistent with its terms, may be proved. In considering

whether or not this Proviso applies, the Court shall have

regard to the degree of formality of the document.‖

Thus as per Proviso (2) to Section 92 of Indian Evidence Act, if there

is contemporaneous nor prior separate oral agreement as to any

matter which is not inconsistent with its terms may be proved. The

separate-agreement should be on a distinct collateral matter

although it may form part of the same transactions, the test being

that it should not vary or contradict the terms of the written contract.

29.⁠ ⁠In the light of the above principles, we need to analyse the

evidence of DWs.1 & 2 and consider whether they would fall within

the Proviso (2) to Section 92 of Indian Evidence Act. As pointed out

earlier, DWs.1 & 2 have stated that at the time of entering into an

Agreement of Sale (Ex.A1), parties have agreed that Plaintiff has to

allot six plots and on that understanding; the price was reduced to Rs.

13,500/- per cent. On such agreement between the parties, it was

agreed at the time of entering into Ex.A1-Agreement of Sale. Evidence

adduced as to the oral agreement between the parties for allotting six

plots to the Defendants 1 to 3 is no way contradicting, varying the

terms of Ex.A1-Agreement of Sale. Therefore, the evidence adduced to

establish the oral agreement between the parties to allot six plots to

the Defendants 1 to 3 by the Plaintiff is admissible in evidence and not

hit under Sections 91 & 92 of Indian Evidence Act.

xxx xxx xxx‖

(Emphasis Supplied)

79. Thus, the ingredients for the applicability of Proviso 2 of Section 92

of Evidence Act, can be summed up as follows:

i. The separate oral agreement envisaged under Proviso 2 refers to a

contemporaneous separate oral agreement.

RFA 70/2019 Page 67 of 117

ii. The separate oral agreement should relate to any matter on which the

document is silent.

iii. The separate oral agreement should be on a distinct collateral matter,

although it may form part of the same transaction.

iv. Oral agreement should not contradict or vary the terms of the written

agreement.

v. The Court would have due regard to the degree of formality of the

document in writing.

80. Thus, where the document in writing is of a lower degree of formality,

i.e., it does not contain the entire agreement between the parties, but

embodies only some of the conditions, then oral evidence to prove

contemporaneous oral agreement is clearly admissible in evidence, provided

it is not inconsistent with the written document.

81. If the document is a formal one, the presumption is that it incorporates

the entire agreement between the parties, and therefore, oral evidence is

excluded. If the document is informal, it need not contain all the terms

agreed to between the parties, because by its very nature it is not supposed to

be a document complete in all respects. Oral evidence can be led in such

cases. Thus, spelling out the principles for proving oral agreement with

regard to a written document, the Division Bench of the Patna High Court in

the case of Rajendra Prasad Versus Gaya Prasad Sah

12

, has held as

follows:

―xxx xxx xxx

17. It is therefore obvious that where the document is silent the

existence of any separate oral agreement in respect thereof, if not

inconsistent with its term, may be given. It must be noted that in

12

1975 SCC OnLine Pat 90.

RFA 70/2019 Page 68 of 117

considering the question of application of this proviso, the court has

to keep regard to the degree of formality of the document itself. It is

well settled that where the document is formal and if the matter in

respect of which the evidence is sought to be adduced was a matter

which necessarily would have been mentioned in the document,

evidence in that regard shall not be allowed. If however the

document is not formal and it need not have contained all the

matters relating thereto and when the document is silent, in such

cases it is open to the party to lead evidence in respect of the matter

on which it is silent.

xxx xxx xxx

19. The principle underlying the law is that when a transaction has

been reduced to writing that must be regarded as the appropriate

and the only evidence of the terms of agreement. The question

therefore as to what is the nature of the document becomes a very

important one because upon its nature will depend the answer to the

question as to whether the document can be treated to be one which

is supposed to incorporate all the terms of agreement. If the

document is a formal one, obviously the presumption is that it

incorporates the entire agreement between, the parties. That is the

reason why oral evidence is excluded. If the document is of an

informal nature it need not contain within itself all the terms agreed

to between the parties because by its very nature it is not supposed to

be a document complete in all respect. It is therefore well settled that

where the document is a formal one no oral evidence relating to any

contemporaneous agreement inconsistent with the terms of the

document would be permitted. The same cannot however be said in

respect of an informal document. In the present case the chitha being

an informal document the law laid down in the cases aforesaid has no

application.

xxx xxx xxx‖

(Emphasis Supplied)

82. The aforesaid position of law is also supported by illustrations (f), (g)

and (h) to Section 92 of the Evidence Act, which read as under:

―xxx xxx xxx

(f) A orders goods of B by a letter in which nothing is said as to the

time of payment, and accepts the goods on delivery. B sues A for the

price. A may show that the goods were supplied on credit for a term

still unexpired.

RFA 70/2019 Page 69 of 117

(g) A sells B a horse and verbally warrants him sound. A gives B a

paper in these words: ―Bought of A a horse of Rs. 500‖. B may

prove the verbal warranty.

(h) A hires lodgings of B, and gives B a card on which is written ––

―Rooms, Rs. 200 a month.‖ A may prove a verbal agreement that

these terms were to include partial board.

A hires lodgings of B for a year, and a regularly stamped

agreement, drawn up by an attorney, is made between them. It is

silent on the subject of board. A may not prove that board was

included in the terms verbally.

xxx xxx xxx‖

(Emphasis Supplied)

83. The two scenarios in illustration (h) show that the Courts would have

due regard to the formality of the document while deciding whether to allow

oral evidence with respect to existence of any separate oral agreement.

84. In the light of the above principles, when analyzing the evidence on

record, the oral understanding as pleaded by the purchasers, is not barred by

Section 92 of the Evidence Act. In the present case, the formal Agreement to

Sell dated 24

th

January, 1989 was subsequently modified by way of the

covenant as contained in the receipt dated 03

rd

August, 1989, which records

that the sellers have handed over the vacant physical possession of the self-

occupied portion and symbolic possession of the tenanted portion of the suit

property. It also states that the purchasers shall be entitled to claim the rent.

85. Additionally, the receipt dated 03

rd

August, 1989 further states that the

balance sale consideration shall be paid at the time of registration of the sale

deed. The receipt is a writing of an ‘informal nature’, as it does not include

all the terms between the parties. The receipt only mentions the time/event

when the balance sale consideration was payable. However, the receipt is

silent on the manner and mode in which the balance sale consideration has to

be paid. The purchasers, i.e., respondent nos. 1 to 8 herein, seek to prove the

RFA 70/2019 Page 70 of 117

oral understanding that payments made to tenants stand adjusted against the

balance sale consideration. Thus, the oral understanding pleaded is on a

matter of distinct collateral nature, forming part of the same transaction. It is

not contradictory to any terms of the receipt dated 03

rd

August, 1989.

Therefore, the purchasers could lead oral evidence to prove the terms of oral

agreement between the parties.

86. Further, Proviso 6 to Section 92 of the Evidence Act provides also an

exception to the general rule under Section 92, and states that any fact may

be proved which shows in what manner the language of a document is

related to existing facts.

87. Further, Section 95 of the Evidence Act provides that where the

language used in the document is plain in itself, but is unmeaning in

reference to its existing facts, evidence may be given to show that it was

used in a peculiar sense. Section 95 of the Evidence Act, reads as under:

―xxx xxx xxx

95.⁠ ⁠Evidence as to document in unmeaning reference to existing

facts.—When language used in a document is plain in itself, but is

unmeaning in reference to existing facts, evidence may be given to

show that it was used in a peculiar sense.

xxx xxx xxx‖

(Emphasis Supplied)

88. In this regard, it would be apposite to place reliance on the judgment

passed in Anglo American Metallurgical Coal Pty. Limited Versus MMTC

Ltd.

13

, wherein the Supreme Court noted that a latent ambiguity arises when

the words of the instrument are clear, but their application to the

circumstances is doubtful, and such an ambiguity, being raised solely by

13

(2021) 3 SCC 308.

RFA 70/2019 Page 71 of 117

extrinsic evidence, is allowed to be removed by the same means. The

Supreme Court further held that under Section 95 of the Evidence Act,

which deals with latent ambiguity, read with Proviso (6) and Illustration (f)

to Section 92 of the Evidence Act, evidence may be led to show the peculiar

sense in which the language was used, when the plain language of the

document is otherwise unmeaning in reference. The relevant paragraphs of

the said decision are reproduced as under:

―xxx xxx xxx

30.⁠ ⁠Importantly, Section 92 of the Evidence Act refers to the terms of a

―contract, grant or other disposition of property or any matter

required by law to be reduced to the form of a document‖. In all these

cases, under Proviso (6) read with Illustration (f), any fact may be

proven which shows in what manner the language of a document is

related to existing facts. Illustration (f) of Section 92 of the Evidence

Act indicates that facts, which may on the face of it, be ambiguous

and vague, can be made certain in the contextual setting of the

contract, grant or other disposition of property. Section 94 of the

Evidence Act, then speaks of language being used in a document

being ―plain in itself‖. It is only when such document ―applies

accurately to existing facts‖, that evidence may not be given to show

that it was not meant to apply to such facts. Likewise, the obverse

situation is contained in Section 95 of the Evidence Act, which then

states that when the language used in a document is plain in itself,

but is ―unmeaning in reference to existing facts‖, only then may

evidence be given to show that it was used in a peculiar sense.

31.⁠ ⁠When Sections 92, 94 and 95 of the Evidence Act are applied to a

string of correspondence between parties, it is important to

remember that each document must be taken to be part of a coherent

whole, which happens only when the ―plain‖ language of the

document is first applied accurately to existing facts.

32.⁠ ⁠In Woodroffe and Ali's Law of Evidence [Woodroffe, J. and Ali, A.,

Law of Evidence, [19th Edn. (Vol. 3), Butterworths, Wadhwa, Nagpur,

2013].], the learned authors opine that whereas Sections 93 and 94 of

the Evidence Act deal with cases of patent ambiguity, Sections 95 to 97

RFA 70/2019 Page 72 of 117

of the Evidence Act deal with cases of latent ambiguity (see pp. 3119-

20). A ―patent ambiguity‖ is explained in the following terms in

Starkie on Evidence [Starkie, T., A Treatise on the Law of Evidence,

(7th Edn., William Benning, London, 1829)]:

―By patent ambiguity must be understood an ambiguity inherent

in the words, and incapable of being dispelled, either by any

legal rules of construction applied to the instrument itself, or by

evidence showing that terms in themselves unmeaning or

unintelligible are capable of receiving a known conventional

meaning, the great principle on which the rule is founded is that

the intention of parties, should be construed, not by vague

evidence of their intentions independently of the expressions

which they have thought fit to use, but by the expression

themselves. Now, those expressions which are incapable of any

legal construction and interpretation by the rules of art are

either so because they are in themselves unintelligible, or

because, being intelligible, they exhibit a plain and obvious

uncertainty. In the first instance, the case admits of two

varieties; the terms though at first sight unintelligible, may yet

be capable of having a meaning annexed to them by extrinsic

evidence, just as if they were written in a foreign language, as

when mercantile terms are used which amongst mercantile men

bear a distinct and definite meaning, although others do not

comprehend them; the terms used may, on the other hand, be

capable of no distinct and definite interpretation. Now, it is

evident that to give effect to an instrument, the terms of which,

though apparently ambiguous are capable of having a distinct

and definite meaning annexed to them is no violation of the

general principle, for, in such a case, effect is given, not to any

loose conjecture as to the intent and meaning of the party, but to

the expressed meaning and that, on the other hand, where either

the terms used are incapable of any certain and definite

meaning, or, being in themselves intelligible, exhibit plain and

obvious uncertainty, and are equally capable of different

applications, to give an effect to them by extrinsic evidence as to

the intention of the party would be to make the supposed

intention operate independently of any definite expression of

such intention. By patent ambiguity, therefore, must be

RFA 70/2019 Page 73 of 117

understood an inherent ambiguity, which cannot be removed,

either by the ordinary rules of legal construction or by the

application of extrinsic and explanatory evidence, showing that

expressions, prima facie, unintelligible, are yet capable of

conveying a certain and definite meaning.‖

(emphasis supplied)

33.⁠ ⁠On the other hand, a ―latent ambiguity‖ is described in

Woodroffe and Ali's Law of Evidence, as follows:

―Latent ambiguity, in the more ordinary application, arises

from the existence of facts external to the instrument, and the

creation by these facts of a question not solved by the

document itself. A latent ambiguity arises when the words of

the instrument are clear, but their application to the

circumstances is doubtful; here the ambiguity, being raised

solely by extrinsic evidence, is allowed to be removed by the

same means. In strictness of definition, such cases, as those in

which peculiar usage may afford a construction to a term

different from its natural one as can be seen in Section 98, would

be instances of latent ambiguity, since the double use of the term

would leave it open to the doubt in which of its two senses it was

to be taken. It is not, however, to this class of cases that

reference is now made, but to those in which the ambiguity is

rather that of description, either equivocal itself from the

existence of two subject-matter, or two persons, both falling

within its terms as can be seen in Section 96, or imperfect when

brought to bear on any given person or thing as per Sections 95

and 97.‖

xxx xxx xxx

36.⁠ ⁠However, Section 95 of the Evidence Act, dealing with latent

ambiguity, when read with Proviso (6) and Illustration (f) to Section

92 of the Evidence Act, could apply to the facts of the present case,

as when the plain language of a document is otherwise unmeaning

in reference to how particular words are used in a particular sense,

given the entirety of the correspondence, evidence may be led to

show the peculiar sense of such language. Thus, if this provision is

applied, the majority award cannot be faulted as it has accepted the

evidence given by Mr Wilcox, wherein he explained that the three

emails would only be meaningful if they were taken to refer to

RFA 70/2019 Page 74 of 117

―mixed‖ supplies of coal, and not supplies of coal at the contractual

price.

xxx xxx xxx

38.⁠ ⁠The approach of the Singapore Court of Appeal has our broad

approval, being in line with the modern contextual approach to the

interpretation of contracts. When Proviso (6) and Illustration (f) to

Section 92, Section 94 and Section 95 of the Evidence Act are read

together, the picture that emerges is that when there are a number of

documents exchanged between the parties in the performance of a

contract, all of them must be read as a connected whole, relating

each particular document to ―existing facts‖, which include how

particular words are used in a particular sense, given the entirety of

correspondence between the parties. Thus, after the application of

Proviso (6) to Section 92 of the Evidence Act, the adjudicating

authority must be very careful when it applies provisions dealing

with patent ambiguity, as it must first ascertain whether the plain

language of a particular document applies accurately to existing

facts. If, however, it is ambiguous or unmeaning in reference to

existing facts, evidence may then be given to show that the words

used in a particular document were used in a sense that would make

the aforesaid words meaningful in the context of the entirety of the

correspondence between the parties.

xxx xxx xxx‖

(Emphasis Supplied)

89. Likewise, in the case of West Bengal State Electricity Distribution

Co. Ltd. Versus Adhunik Power & Natural Resource Ltd. and Others

14

, the

Supreme Court held that the rule that the terms of a contract must be

determined from the document itself does not bar the Court from looking

into attending circumstances and impart meaning to a term, which may

otherwise be meaningless or unworkable, in the following manner:

14

2026 SCC OnLine SC 328.

RFA 70/2019 Page 75 of 117

―xxx xxx xxx

22.⁠ ⁠Mr. Sibal's argument that a written contract between parties

cannot be qualified with reference to any prior or subsequent

statements/conduct is unfounded. The law in this regard is crystal

clear. Ordinarily, when a contract is reduced to writing, its terms

must be determined from the document itself. However, this rule

does not put an embargo on looking into such facts which (i)

establish a link between terms of the contract and existing facts i.e.

attending circumstances, or (ii) impart meaning to a term which

may otherwise be meaningless or unworkable. These principles have

been eloquently summarized in Anglo American Metallurgical Coal

Pty. Limited v. MMTC Limited wherein this Court observed:…

23.⁠ ⁠In the present context, we note that Article 2.5 of the PPA/PSA

refers to a ‗captive source‘ for coal supply for generation & supply of

power and indemnifies WBSEDCL against any additional cost arising

from procurement of coal from alternate sources. Though the captive

source is not expressly identified in Article 2.5, its identity is clearly

discernible from the surrounding circumstances, in particular, the

Minutes of Meeting dated 03.01.2011 recording the salient features

underlying the PPA/PSA, which specifically note that APNRL had a

captive coal block at Ganeshpur. Further, the letter dated 30.04.2012

issued by WBSEDCL enquiring about the status of work relating to

lifting of coal from Ganeshpur captive coal block and its

transportation to the coal handling plant, reinforces this position.

WBSEDCL was a party to these correspondences and has never

disputed their contents. In these circumstances, it does not lie in the

mouth of WBSEDCL to contend that the PPA/PSA did not prescribe

Ganeshpur Coal Block as the captive coal source for generation and

supply of electricity.

xxx xxx xxx‖

(Emphasis Supplied)

90. Adverting to the present facts, the receipts dated 01

st

August, 1989 and

03

rd

August, 1989 record that the balance sale consideration is payable at the

time of registration of the sale deed. However, any specific amount as due

balance sale consideration is not expressly identified or recorded in the said

RFA 70/2019 Page 76 of 117

receipts. The sellers transferred the possession of the suit property to the

purchasers, and raised no dispute as to the sale consideration, and only after

a passage of approximately 11 years, the successor-in-interest of one of the

sellers has raised a dispute as to the sale consideration not having been

satisfied.

91. In view of these attending circumstances, the plain meaning of the

words used in the said receipt have become doubtful, ambiguous or

unmeaning in reference to existing facts. Thus, the purchasers/respondent

nos. 1 to 8, can lead oral evidence to contend that the balance sale

consideration as mentioned in the said receipt, referred to the amount due

after the payments made to the tenants were adjusted.

92. The appellant has also argued that the alleged payments made by the

purchasers/respondent nos. 1 to 8 to the tenants in the suit property, could

not have been adjusted against the balance sale consideration, since the said

payments were unlawful under Section 5(3) of the DRC Act, and were not

valid consideration under Sections 23 and 24 of the Contract Act.

93. However, it is to be noted that these objections with respect to the

legal validity of payments made to the tenants were never taken by the

appellant in the pleadings before the Trial Court, and no such issue was

framed with regard thereto.

94. In this regard, decision of the Supreme Court in the case of Bachhaj

Nahar Versus Nilima Mandal and Another

15

, may be referred to, wherein,

the Supreme Court has held that:

15

(2008) 17 SCC 491.

RFA 70/2019 Page 77 of 117

―xxx xxx xxx

10. The High Court, in this case, in its obvious zeal to cut delay and

hardship that may ensue by relegating the plaintiffs to one more round

of litigation, has rendered a judgment which violates several

fundamental rules of civil procedure. The rules breached are:

(i) No amount of evidence can be looked into, upon a plea

which was never put forward in the pleadings. A question

which did arise from the pleadings and which was not the

subject-matter of an issue, cannot be decided by the court.

(ii) A court cannot make out a case not pleaded. The court

should confine its decision to the question raised in pleadings.

Nor can it grant a relief which is not claimed and which does

not flow from the facts and the cause of action alleged in the

plaint.

(iii) A factual issue cannot be raised or considered for the first

time in a second appeal.

11. The Civil Procedure Code is an elaborate codification of the

principles of natural justice to be applied to civil litigation. The

provisions are so elaborate that many a time, fulfilment of the

procedural requirements of the Code may itself contribute to delay.

But any anxiety to cut the delay or further litigation should not be a

ground to flout the settled fundamental rules of civil procedure. Be

that as it may. We will briefly set out the reasons for the aforesaid

conclusions.

12.The object and purpose of pleadings and issues is to ensure that

the litigants come to trial with all issues clearly defined and to

prevent cases being expanded or grounds being shifted during trial.

Its object is also to ensure that each side is fully alive to the

questions that are likely to be raised or considered so that they may

have an opportunity of placing the relevant evidence appropriate to

the issues before the court for its consideration. This Court has

repeatedly held that the pleadings are meant to give to each side

intimation of the case of the other so that it may be met, to enable

courts to determine what is really at issue between the parties, and to

prevent any deviation from the course which litigation on particular

causes must take.

RFA 70/2019 Page 78 of 117

13. The object of issues is to identify from the pleadings the

questions or points required to be decided by the courts so as to

enable parties to let in evidence thereon. When the facts necessary to

make out a particular claim, or to seek a particular relief, are not

found in the plaint, the court cannot focus the attention of the

parties, or its own attention on that claim or relief, by framing an

appropriate issue. As a result the defendant does not get an

opportunity to place the facts and contentions necessary to repudiate

or challenge such a claim or relief. Therefore, the court cannot, on

finding that the plaintiff has not made out the case put forth by him,

grant some other relief. The question before a court is not whether

there is some material on the basis of which some relief can be

granted. The question is whether any relief can be granted, when the

defendant had no opportunity to show that the relief proposed by the

court could not be granted. When there is no prayer for a particular

relief and no pleadings to support such a relief, and when the

defendant has no opportunity to resist or oppose such a relief, if the

court considers and grants such a relief, it will lead to miscarriage of

justice.Thus it is said that no amount of evidence, on a plea that is not

put forward in the pleadings, can be looked into to grant any relief.

xxx xxx xxx

17.It is thus clear that a case not specifically pleaded can be

considered by the court only where the pleadings in substance,

though not in specific terms, contain the necessary averments to

make out a particular case and the issues framed also generally

cover the question involved and the parties proceed on the basis that

such case was at issue and had led evidence thereon. As the very

requirements indicate, this should be only in exceptional cases

where the court is fully satisfied that the pleadings and issues

generally cover the case subsequently put forward and that the

parties being conscious of the issue, had led evidence on such issue.

But where the court is not satisfied that such case was at issue, the

question of resorting to the exception to the general rule does not

arise. The principles laid down in Bhagwati Prasad [AIR 1966 SC

735] and Ram Sarup Gupta [(1987) 2 SCC 555 : AIR 1987 SC 1242]

referred to above and several other decisions of this Court following

the same cannot be construed as diluting the well-settled principle

that without pleadings and issues, evidence cannot be considered to

make out a new case which is not pleaded. Another aspect to be

RFA 70/2019 Page 79 of 117

noticed, is that the court can consider such a case not specifically

pleaded, only when one of the parties raises the same at the stage of

arguments by contending that the pleadings and issues are sufficient

to make out a particular case and that the parties proceeded on that

basis and had led evidence on that case. Where neither party puts

forth such a contention, the court cannot obviously make out such a

case not pleaded, suo motu.

xxx xxx xxx

23.It is fundamental that in a civil suit, relief to be granted can be only

with reference to the prayers made in the pleadings. That apart, in

civil suits, grant of relief is circumscribed by various factors like court

fee, limitation, parties to the suits, as also grounds barring relief, like

res judicata, estoppel, acquiescence, non-joinder of causes of action

or parties, etc., which require pleading and proof. Therefore, it would

be hazardous to hold that in a civil suit whatever be the relief that is

prayed, the court can on examination of facts grant any relief as it

thinks fit. In a suit for recovery of rupees one lakh, the court cannot

grant a decree for rupees ten lakhs. In a suit for recovery possession

of property ‗A‘, court cannot grant possession of property ‗B‘. In a

suit praying for permanent injunction, court cannot grant a relief of

declaration or possession. The jurisdiction to grant relief in a civil

suit necessarily depends on the pleadings, prayer, court fee paid,

evidence let in, etc.

24. In the absence of a claim by the plaintiffs based on an easementary

right, the first defendant did not have an opportunity to demonstrate

that the plaintiffs had no easementary right. In the absence of

pleadings and an opportunity to the first defendant to deny such

claim, the High Court could not have converted a suit for title into a

suit for enforcement of an easementary right. The first appellate

court had recorded a finding of fact that the plaintiffs had not made

out title. The High Court in second appeal did not disturb the said

finding. As no question of law arose for consideration, the High Court

ought to have dismissed the second appeal. Even if the High Court felt

that a case for easement was made out, at best liberty could have been

reserved to the plaintiffs to file a separate suit for easement. But the

High Court could not, in a second appeal, while rejecting the plea of

the plaintiffs that they were owners of the suit property, grant the

RFA 70/2019 Page 80 of 117

relief of injunction in regard to an easementary right by assuming that

they had an easementary right to use the schedule property as a

passage.

xxx xxx xxx‖

(Emphasis Supplied)

95. The appellant has neither asserted nor established the applicability of

the DRC Act to the tenancy in question, by proving the monthly rent amount

of the suit property. Since the appellant did not do so, the contesting

respondents had no occasion to deal with the same in their pleadings and

evidence. Therefore, in the absence of any evidence in regard to applicability

of the DRC Act, this Court would not presume that the suit premises were

covered under the DRC Act.

96. In this regard, it would be apposite to refer to the case of M/s Sentinel

Consultants Pvt. Ltd. Versus Shri Sudhir Malhotra

16

, wherein, it was held

that if the premises were not covered under the DRC Act, payment of

compensation to a tenant for surrendering the tenancy rights, cannot be

considered as unlawful, in the following manner:

―xxx xxx xxx

17. One of the objections taken in the Written Statement is that since

the agreement to sell provided for payment of Rs. 10 lac to the plaintiff

for surrender of the tenancy rights in the ground floor portion and

adjustment of that amount towards payment of sale consideration of

the basement floor, the consideration being unlawful in terms of

Section 23 of the Indian Contract Act, the agreement is void and

unenforceable in law. Section 23 of the Indian Contract Act, 1872, to

the extent it is relevant, provides that the consideration or object of an

agreement is lawful, unless it is forbidden by law or is of such a

nature, if permitted, it would defeat the provisions of any law. Section

24 of the Indian Contract Act, to the extent it is relevant, provides that

if any part of a single consideration for one or more objects, or any

one or any part of any one of several considerations for a single object

is unlawful, the agreement is void. When questioned in this regard, the

16

2011 SCC OnLine Del 4485.

RFA 70/2019 Page 81 of 117

learned Counsel for the plaintiff stated that the rent of the ground floor

premises which defendant No. 1 had let out to the plaintiff and which it

had vacated pursuant to the agreement to sell dated 27

th

March, 1997

was Rs. 6,000/- p.m. Section 5(3) of Delhi Rent Control Act provides

that it shall not be lawful for the tenant to receive any payment in

consideration of the relinquishment of tenancy of any premises.

Therefore, if the provisions of Delhi Rent Control Act apply to the

Ground Floor which was let out to the plaintiff and was vacated by it

pursuant to the agreement to sell dated 27

th

March, 1997, the part of

the consideration may be held unlawful and consequently the

agreement may be void. Section 3 (c) of Delhi Rent Control Act, to

the extent it is relevant provides, that nothing in the Act shall apply

to any premises whether residential or not, whose monthly rent

exceeds Rs. 3500/-. Hence, the provisions of Delhi Rent Control Act

including Section 5 thereof do not apply to the ground floor premises

which defendant No. 1 had let out to the plaintiff and which was

surrendered by the plaintiff company pursuant to the agreement to

sell dated 27

th

March, 1997. No other provision of law, prohibiting

payment of compensation to a tenant for surrendering the tenancy

rights has been brought to my notice. I, therefore hold that the

consideration or object of the agreement to sell dated 27

th

March,

1997 cannot be said to be unlawful.

xxx xxx xxx‖

(Emphasis Supplied)

97. Thus, the appellant has failed to establish that full payment has not

been received by the sellers, in terms of the Agreement to Sell between the

sellers and the purchasers.

c. Validity of the GPA dated 03

rd

August, 1989

98. The appellant has contended that the GPA dated 03

rd

August, 1989

was revocable under Section 201 of the Contract Act as it did not create any

interest in favor of the respondent no. 7 in the subject matter, and therefore,

the GPA stood terminated upon the demise of Smt. Nirmal Krishan. On the

other hand, it is the case of respondent nos. 1 to 8 that the said GPA was

irrevocable in nature, and did not lapse upon the death of the executant.

RFA 70/2019 Page 82 of 117

99. At the outset, it is to be noted that no challenge was raised by the

appellant herein to the validity of the said GPA before the Trial Court.

Further, it is not the case of the appellant that the said GPA was obtained by

fraud or undue influence. In contrast, the GPA has duly been admitted into

evidence during the trial.

100. The law with regard to the nature of a GPA being revocable or

irrevocable has been recently discussed by the Supreme Court in the case of

M.S. Ananthamurthy and Another Versus J. Manjula and Others

17

, in the

following manner:

―xxx xxx xxx

(i)Relationship between the executant and holder of general power

of attorney

27. A power of attorney derives its basic principles from Chapter X of

the Contract Act which provides for ―Agency‖ along with Sections 1-A

and 2, respectively, of the Powers of Attorney Act, 1882. Agency is a

fiduciary relationship between two persons, where one explicitly or

implicitly agrees that the other will act on their behalf to influence

their legal relations with third parties, and the other similarly agrees

to act in this capacity or does so based on an agreement. The

relationship between the executant of a general power of attorney

and the holder of the power is one of principal and agent. A

principal is bound by the acts done by an agent or the contracts

made by him on behalf of the principal. Likewise, power of attorney

in the nature of contract of agency authorises the holder to do acts

specified by the executant, or represent the executant in dealings

with third persons.

xxx xxx xxx

33. Section 201 of the Contract Act prescribes various ways of

revocation of authority given by the principal to his agent. A principal

can terminate the contract of agency unless such revocation is

precluded by Section 202 of the Contract Act. Section 202 of the

Contract Act, as an exception to the general rule under Section 201,

prescribes that where an agent has himself an interest in the

property which forms the subject-matter of the agency, the agency

17

(2025) 10 SCC 596.

RFA 70/2019 Page 83 of 117

cannot be terminated to the prejudice of such interest unless there is

an express stipulation to the contrary.

34. Illustration (a) to Section 202 of the Contract Act states that A

(principal) has given authority to B (agent) to sell A's land, and to pay

himself i.e. the agent, from the proceeds the debt which is due to him

from A. Illustration (b) states that A (principal) has consigned 1000

bales of cotton to B (agent), who has given an advance on the bales of

cotton. Now, A wishes B to sell the cotton and recover his advance

from the sale proceeds. In both the cases, A can neither revoke the

authority nor agency will be terminated by his insanity or death. It is

important to take a note that in both the cases, the agent has an

interest vested in the subject-matter of the agency. The factum of

interest or security of the agent, in both cases, does not imply that

the agent's right to remuneration constitutes an interest in the

subject-matter of the agency; rather, it extends beyond the mere

advancement of remuneration or commission. Where PoA is coupled

with an interest, it metamorphosises to an irrevocable agency unless

expressly stated otherwise. There an agent's right to remuneration is

not an interest in the subject-matter of the agency.

35. Therefore, the essentials of Section 202 of the Contract Act are,

first, there shall be a relationship in the capacity of ―principal and

agent‖ between the parties and secondly, there shall be agent's

interest in the subject-matter of the agency. If both the conditions

are fulfilled the agency becomes irrevocable and cannot be

terminated unilaterally at the behest of the principal. As the first

condition is satisfied in the present case, we shall now proceed to

examine whether from the reading of the GPA, the holder of PoA had

an interest in the subject-matter of the agency, namely, the suit

property.

xxx xxx xxx

38. In Palani Vannan v. Krishnaswami Konar [Palani Vannan v.

Krishnaswami Konar, 1945 SCC OnLine Mad 119], the decree-holder

had executed a PoAauthorising the holder to execute the decree. Later,

the executant revoked the PoA through a notice. The question before

the Court was whether the notice revoking the authority was valid in

law or not. The Court held that the PoA was not coupled with interest

as the object of the PoA was not securing any interest of the agent. It

held that the primary object of the PoA was to recover the fruits of the

decree on behalf of the principal despite the fact that the agent's

remuneration was fixed to be drawn from the proceeds of the decree.

The relevant observations are reproduced hereinbelow: (SCC OnLine

Mad)

RFA 70/2019 Page 84 of 117

―It is only necessary to refer to one further decision, Reginald

Charles Frith v. Josiah Alexander Frith [Reginald Charles Frith

v. Josiah Alexander Frith, 1906 AC 254 (PC)], in which the

Judicial Committee discuss the general position relating to these

matters. Their Lordships point out that in what is known as

Carmichael case [Hannan's Empress Gold Mining &

Development Co., In re, (1896) 2 Ch 643 (CA)]: (Josiah

Alexander Frith case [Reginald Charles Frith v. Josiah

Alexander Frith, 1906 AC 254 (PC)], AC p. 260)

‗… the donor of the power, for valuable consideration,

conferred upon the donee, authority to do a particular

thing in which the latter had an interest, namely, to apply

for the shares of the company which the donee was

promoting for the purpose of purchasing his own property

from him, and the donor sought to revoke that authority

before the benefit was reaped.‘

The effect of all these cases appears to be stated accurately in

Bowstead on the Law of Agency, 8th Edn., p. 456. It is stated

(Article 138):

‗Where the authority of an agent is given … for the

purpose of effectuating any security, or of protecting or

securing any interest of the agent, it is irrevocable during

the subsistence of such security or interest.‘

* * *

My view of this document is as follows: I think its primary

object was to recover on behalf of the principal the fruits of

his decree. It contained incidentally a provision for the

employment of the agent, Vedavyasachar, in order to realise

that decree. It provides that his remuneration is to be one-half

of the proceeds. It contains an indemnity clause against any

out-of-pocket expenses which he is entitled also to recover

from the amount of the decree. But the object of the power of

attorney is not for the purpose of protecting or securing any

interest of the agent. I think that part of the agreement is

purely incidental. There is, however, another feature of this

document which seems to me to be conclusive against the

appellants. The last words,

‗I shall not for any reason whatever, cancel without your

permission this authority which I have given to you, without

paying the amount expended by you and without giving the

aforesaid relief for your trouble‘,

RFA 70/2019 Page 85 of 117

seem to me to make express provision for the revocation of

the above power. It can be done in two ways: (a) by consent,

for that is what I understand ―your permission‖ to mean, and

(b) if that permission is withheld, on payment by the principal

of all out-of-pocket expenses and also remuneration for his

services. With regard to remuneration, the wording is vague,

―without giving the aforesaid relief for your trouble‖.‖

(emphasis supplied)

39. To the same effect is the decision of the High Court of Delhi in

Harbans Singh v. Shanti Devi [Harbans Singh v. Shanti Devi, 1977

SCC OnLine Del 102]. The High Court while dealing with the

question of whether the powers of attorney executed by the appellant

were cancelled validly, laid down the conditions of irrevocability of a

contract of agency as: (i) authority to agent given for valuable

consideration; (ii) such valuable consideration was given for the

purpose of effectuating a security or protecting or securing the

interest of the agent; (iii) agency not being irrevocable merely

because the agent has some interest in carrying it out or holds a

special right, such as a lien or advance, over its subject-matter. Thus,

the agency has to be specifically meant to secure the agent's benefit

or interest. It further observed that the interest of the agent can be

inferred from the language of the document or from the course of

business between the principal and agent. The observations are

reproduced hereinbelow: (SCC OnLine Del)

―All the conditions of irrevocability are satisfied in the present

case. The authority to the agent was given for valuable

consideration which proceeded from the respondent. It was given

for the purpose of effectuating a security or protecting or

securing the interest of the agent. For, the only purpose of the

agency was to ensure and secure the performance of the contract

by the appellant in favour of the respondent for whom Shri

Gulati was acting as the husband and the nominee and,

therefore, a representative or an agent. Where the performance

of the agency is not to secure the interest or the benefit of the

agent then the agency is not irrevocable merely because the

agent has an interest in the exercise of it or has a special

property in or lien for advances upon the subject-matter of it.‖

(emphasis supplied)

xxx xxx xxx

45. Further, a mere use of the word ―irrevocable‖ in a PoA does not

make the PoA irrevocable. If the PoA is not coupled with interest, no

extraneous expression can make it irrevocable. At the same time,

even if there is no expression to the effect that the PoA is irrevocable

RFA 70/2019 Page 86 of 117

but the reading of the document indicates that it is a PoA coupled

with interest, it would be irrevocable.The principles of construction

of a PoA termed as ―irrevocable‖ was explained in Manubhai

Prabhudas Patel v. Jayantilal Vadilal Shah [Manubhai Prabhudas

Patel v. Jayantilal Vadilal Shah, 2011 SCC OnLine Guj 7028]. The

relevant observations are reproduced below: (SCC OnLine Guj para

12)

―12. I am of the view that while construing a document, it is

necessary to determine the real intention of the parties. The

mere form in which document is couched is immaterial. The

intention of the parties has to be gathered from the terms of the

documents themselves and from such of the surrounding

circumstances, as later required to show in what manner the

language of the document is related to the existing fact. It is

very difficult task to know the intention of the parties on the

basis of the recital of the document. But, the Court can rely

safely on the language of the document, the language, which has

been used by the parties to manifest the intention of the parties.

If the Court goes on extraneous evidence, that may lead to more

difficulty and confusion. But, there are certain principles to be

borne in mind. The first principle is, the mere saying that the

power of attorney is an irrevocable power of attorney coupled

with interest is not the end of the matter. The Court, can clearly

say that the document, though, is styled as an irrevocable power

of attorney is not in substance a power coupled with interest so

as to make it an irrevocable power of attorney. At the same time,

even if there is no title to show that the power is an irrevocable

power, but, the substance of the entire document would suggest

that the same is an irrevocable power coupled with interest.

Therefore, a document has to be construed as a whole. A stray

sentence here and there cannot be picked out to construe a

document. To understand the tenor of the document and the

intention of the parties, it has to be read as a whole. The real

intention of the parties has to be covered not merely from what

ex facie is stated in the document, but, from the totality of the

recitals in the document. At this stage, I may quote with profit a

very lucid judgment rendered by learned Single Judge of the

Madras High Court explaining the general principles regarding

the construction of power of attorney. In Anantha Pillai v.

Rathnasabapathy Mudaliar [Anantha Pillai v. Rathnasabapathy

Mudaliar, 1968 SCC OnLine Mad 79], Ismail, J. (as he then

was), held thus: (SCC OnLine Mad)

‗The general principles regarding the construction of power

of attorney are well settled. Powers of attorney must be strictly

RFA 70/2019 Page 87 of 117

construed as giving only such authority as they confer expressly

or by necessary implication. Where an act purporting to be done

under the power of attorney is challenged as being in excess of

the power, it is necessary to show that on a fair construction of

the whole instrument the authority in question is to be found

within the four corners of the instrument either by express terms

or by necessary implication. Some of the principles governing

the construction of a power of attorney are: (1) the operative

part of the deed is controlled by the recitals; (2) where an

authority is given to do particular acts, followed by general

words, the general words are restricted to what is necessary for

the performance of the particular acts; (3) the general words do

not confer general powers but are limited to the purpose for

which the authority is given and are construed as enlarging the

special powers only when necessary for that purpose; (4) a

power of attorney is construed so as to include all medium

powers necessary for its effective execution. Bearing these

general principles in mind the question for consideration is

whether the power of attorney in this case authorised the first

defendant to enter into an agreement to sell or authorised him to

execute a sale deed.‘ ‖

xxx xxx xxx

(Emphasis Supplied)

101. A perusal of the aforesaid judgment shows that the essential

ingredients under Section 202 of the Contract Act are first, there shall be a

relationship in the capacity of ‘principal and agent’ between the parties and

second, the agent must have interest in the subject matter of the agency. If

both the conditions are fulfilled, the agency becomes irrevocable, and cannot

be terminated unilaterally at the behest of the principal. Thus, where a power

of attorney is coupled with an interest, it metamorphoses into an irrevocable

agency, unless expressly stated otherwise.

102. For a power of attorney to be irrevocable, it must have been given to

the agent for the purpose of effectuating a security, or protecting/securing the

interest of the agent. Thus, the agency has to be specifically meant to secure

the agent’s benefit or interest, which can be inferred from the language of the

RFA 70/2019 Page 88 of 117

document or from the course of business between the principal and agent.

The intention of the parties has to be gathered from the terms of the

documents themselves and from the surrounding circumstances, which are

required to show in what manner the language of the document is related to

the existing facts.

103. In the present case, the sellers and the purchasers had executed the

Agreement to Sell, and were clearly in talks of sale/purchase of the suit

property. In this course of business and dealings between them, when a part

of the sale consideration stood paid, the sellers executed the GPA dated 03

rd

August, 1989, against valuable consideration.

104. The purpose for executing the GPA, as is clear from the admission of

the appellant in her Evidence Affidavit, was to facilitate the handing over of

the possession of the suit property to the purchasers/respondent nos. 1 to 8 in

terms of Clause 4 of the Agreement to Sell. Thus, it is evident that the

purpose of the said GPA was meant to secure the interest of possession of the

purchasers in the suit property. The GPA is clearly coupled with the interest,

and is irrevocable in nature. Hence, the contention of the appellant that the

GPA lapsed upon the death of Smt. Nirmal Krishan is devoid of any merit,

and has to be rejected.

105. The reliance by the appellant on the case of M.S. Ananthamurthy

(Supra), to contend that the GPA in the present case is revocable, is

misplaced. In the facts and circumstances of the said decision, the Supreme

Court held that the GPA therein was revocable as it did not create any

interest in favor of the agent in the subject matter thereto. Furthermore, the

agent under the said GPA was not in possession of the property in question.

RFA 70/2019 Page 89 of 117

106. Pertinently, with regard to GPAs and agreements to sell, the Supreme

Court in the celebrated judgment in the case of Suraj Lamp and Industries

Private Limited (Supra), itself has held that the agreement to sell and the

GPA can be used to obtain specific performance or to defend possession

under Section 53-A of the TP Act and that nothing prevents the affected

parties from getting registered deeds of conveyance to complete their title.

d. Possession of the purchasers is protected even in the absence of a Sale

Deed

107. The appellant has contended that the purchasers/respondent nos. 1 to 8

are estopped from setting up a case under Section 53-A of the TP Act, as the

same is contradictory to the case setup by them before the Trial Court,

wherein, they claimed ownership of the suit property by way of the GPA.

Additionally, the appellant contends that no recourse can be sought under

Section 53-A of the TP Act as the oral understanding was not in writing, and

the respondent nos. 1 to 8 were not ready and willing to perform their part of

the contract.

108. Rebutting the aforesaid, respondent nos. 1 to 8 have argued that the

purchasers have been duly put in possession of the suit property against the

payment of full sale consideration, and have been in uninterrupted

possession of the suit property since August, 1989. Hence, their possession

of the suit property, as purchasers, is protected under Section 53-A of the TP

Act.

109. At the outset, this Court notes that the unregistered Agreement to Sell,

in favour of the purchasers was executed on 24

th

January, 1989. The

Registration and Other Related Laws (Amendment) Act, 2001, which

RFA 70/2019 Page 90 of 117

introduced the requirement of the registration of documents for the purposes

of Section 53-A of the TP Act, is prospective in nature, and came into force

with effect from 24

th

September, 2001. Since the Agreement to Sell in favour

of the purchasers is of the year 1989, the requirement of registration would

not apply to it.

110. In this regard, reliance is placed on the case of Gurmeet Kaur Versus

Harbhajan Singh and Another

18

, relevant paragraph of which, is

reproduced as under:

―xxx xxx xxx

9. It is an undisputed fact that the appellant/plaintiff proved the

documents being the agreement to sell, general power of attorney

and the receipt as Ex. P.W. ½ to Ex. P.W. ¼. These documents have

been executed prior to amendment of section 53-A of the Transfer of

Property Act, 1882 by Act 48 of 2001 and which came into effect

from 24.9.2001. These documents therefore need not have been

stamped or registered so as to create rights in terms of doctrine of

part performance under the then existing section 53-A of the

Transfer of Property Act. It is only by the subsequent amendment of

section 53-A of the Transfer of Property Act w.e.f 24.9.2001, that an

agreement to sell would not confer any rights in terms of the

doctrine of part performance if such an agreement to sell is not

registered. Since the amendment is prospective in nature, therefore,

the documents executed prior to 24.9.2001 being the documents Ex.

P.W. ½ to Ex. P.W. ¼ dated 19.4.1995 did not require registration

and stamping. This aspect has been dealt by this Court in detail in the

judgment in the case of Shri Ramesh Chand v. Suresh Chand,[(2012)

188 DLT 538.] and in which judgment this Court has referred to the

judgment of the Supreme Court in the case of Suraj Lamps and

Industries Pvt. Ltd. v. State of Haryana [(2011) 107 AIC 1 (SC)

: (2011) 183 DLT 1 (SC) : (2011) 89 ALR 445 (SC).], and as per

which Supreme Court judgment agreements to sell, general power of

attorneys and Wills which are validly executed are protected and such

documents will have rights flowing under the same in terms of section

18

2017 SCC OnLine Del 12863.

RFA 70/2019 Page 91 of 117

53-A of the Transfer of Property Act, section 202 of the Indian

Contract Act and the relevant provisions of the Indian Succession Act

pertaining to devolution of properties by a Will le only such

documents executed post 24.9.2001 will not have validity if they are

not stamped and registered.

xxx xxx xxx‖

(Emphasis Supplied)

111. Accordingly, this Court will proceed by referring to the un-amended

Section 53-A of the TP Act, which deals with part-performance, as the

Agreement to Sell in favour of the respondent nos. 1 to 8, is of the year

1989, i.e., prior to the amendment of the year 2001. The said provision reads

as under:

―xxx xxx xxx

53A. Part performance. —

Where any person contracts to transfer for consideration any

immoveable property by writing signed by him or on his behalf from

which the terms necessary to constitute the transfer can be

ascertained with reasonable certainty, and the transferee has, in part

performance of the contract, taken possession of the property or any

part thereof, or the transferee, being already in possession, continues

in possession in part performance of the contract and has done some

act in furtherance of the contract,

and the transferee has performed or is willing to perform his part of

the contract, then, notwithstanding that the contract, though required

to be registered, has not been registered, or, where there is an

instrument of transfer, that the transfer has not been completed in

the manner prescribed therefore by the law for the time being in

force, the transferor or any person claiming under him shall be

debarred from enforcing against the transferee and persons

claiming under him any right in respect of the property of which the

transferee has taken or continued in possession, other than a right

expressly provided by the terms of the contract:

Provided that nothing in this section shall affect the rights of a

transferee for consideration who has no notice of the contract or of the

part performance thereof.

xxx xxx xxx‖

(Emphasis Supplied)

RFA 70/2019 Page 92 of 117

112. Perusal of the aforesaid provision shows that Section 53-A of the TP

Act requires that there must be a contract in writing, for transfer of any

immovable property for consideration, and the terms necessary to constitute

the transfer must be ascertained with reasonable certainty therefrom. Further,

it is required that the transferee has in part-performance of the contract taken

possession of the property or any part thereof, and has performed or is

willing to perform his part of the contract.

113. Where these essential conditions under Section 53-A of the TP Act are

satisfied, the transferor and any person claiming under him, shall be

debarred from enforcing any right in respect of the property against the

transferee and persons claiming under him, other than a right expressly

provided by the terms of the contract. The transferor and person claiming

under him would stand debarred to this extent, notwithstanding, that the

contract was not registered or that the transfer has not been completed in the

manner prescribed by the law for the time being in force.

114. In the facts and circumstances of the present case, there exists a

written Agreement to Sell in favor of the purchasers/respondent nos. 1 to 8

for the transfer of the suit property for consideration. Additionally, there also

exists a GPA in favor of respondent no. 7.

115. Furthermore, the purchasers have been duly put in possession of the

suit property pursuant to the Agreement to Sell and GPA in their favour and

have been in uninterrupted continuous possession of the suit property since

at least August, 1989. The sellers have never disputed or challenged the

rights of the contesting respondents in this regard, and have not sought to

assert any right of ownership over the suit property.

RFA 70/2019 Page 93 of 117

116. It is essential to take into account the admitted position of the

appellant that the respondent nos. 1 to 8 have not taken possession of the suit

property forcibly. The testimony of the appellant, i.e., PW-1, in this regard,

as recorded in her cross-examination dated 16

th

December, 2017, is

reproduced as under:

―xxx xxx xxx

Q Is it your testimony that possession of the property was forcibly

taken by the purchasers ?

A No , it was not forcibly taken.

xxx xxx xxx‖

(Emphasis Supplied)

117. The contention of the appellant that the purchasers/respondent nos. 1

to 8 are in unauthorized possession of the second floor of the suit property is

also not tenable. This is in view of the fact that the receipt dated 03

rd

August,

1989 categorically records that the sellers have handed over the vacant

physical possession of the self-occupied portion and the symbolic possession

of the tenanted portion of the suit property to the purchasers. In addition, the

argument of the appellant that the second floor of the suit property was in

possession of the sellers, and since none of the sellers were residing therein,

the purchasers started using the said portion without any authorization,

cannot sustain, since, the second floor, being in the vacant physical

possession of the sellers has clearly been handed over to the purchasers.

118. In furtherance of the purchasers occupying the suit property, they have

also paid the lease rent to the L&DO from the year 1989 to 1998, along with

other statutory dues with respect to the suit property.

119. Therefore, it is manifest that the purchasers have been in uninterrupted

and continuous possession of the suit property since the year 1989. Further,

RFA 70/2019 Page 94 of 117

considering the ensuing facts and circumstances of the present case, this

Court has already recorded in the preceding paragraphs that the entire sale

consideration had been satisfied by the purchasers, and the purchasers have

fulfilled their obligations under the Agreement to Sell entered into with the

sellers. Thus, all the prerequisites of Section 53-A of the TP Act have been

complied with.

120. At this stage, it would be apposite to refer to the judgment passed in

the case of Ghanshyam Versus Yogendra Rathi

19

, wherein, the Supreme

Court held that where the entire sale consideration had been paid, and

possession of the property has been transferred, even if in view of an

agreement to sell, and not a sale deed, the transferee would be said to have

acquired ―de-facto possessory right‖ over the property, and the same cannot

be disturbed. The relevant paragraphs of the said judgment are reproduced as

under:

―xxx xxx xxx

9. No doubt, agreement to sell is not a document of title or a deed of

transfer of property by sale and as such, may not confer absolute

title upon the respondent-plaintiff over the suit property in view of

Section 54 of the Transfer of Property Act, 1882, nonetheless, the

agreement to sell, the payment of entire sale consideration as

mentioned in the agreement itself and corroborated by the receipt of

its payment and the fact that the respondent-plaintiff was put in

possession of the suit property in accordance with law as is also

established by the possession memo on record, goes to prove that the

respondent-plaintiff is de facto having possessory rights over the suit

property in part-performance of the agreement to sell. This

possessory right of the respondent-plaintiff is not liable to be

disturbed by the transferer i.e. the appellant-defendant. The entry of

the appellant-defendant over part of the suit property subsequently is

simply as a licensee of the respondent-plaintiff. He does not continue

to occupy it in capacity of the owner.

19

(2023) 7 SCC 361.

RFA 70/2019 Page 95 of 117

10. In the wake of the finding that the abovementioned documents

have not been fraudulently obtained or have not been manipulated,

treating the said documents to be duly executed and as genuine, one

thing is clear that the respondent-plaintiff is in a settled possession

of the suit property at least in part-performance of the agreement

which cannot be disturbed or disputed by the transferer i.e. the

appellant-defendant.

xxx xxx xxx

16. Legally an agreement to sell may not be regarded as a

transaction of sale or a document transferring the proprietary rights

in an immovable property but the prospective purchaser having

performed his part of the contract and lawfully in possession acquires

possessory title which is liable to be protected in view of Section 53-A

of the Transfer of Property Act, 1882. The said possessory rights of

the prospective purchaser cannot be invaded by the transferor or any

person claiming under him.

17. Notwithstanding the above as the respondent-plaintiff admittedly

was settled with possessory title in part-performance of the agreement

to sell dated 10-4-2002 and that the appellant-defendant has lost his

possession over it and had acquired the right of possession under a

licence simpliciter, exhausted his right to continue in possession after

the licence has been determined. Thus, the appellant-defendant

parted with the possession of the suit property by putting the

respondent-plaintiff in possession of it under an agreement to sell.

The respondent-plaintiff in this way came to acquire possessory title

over the same. The appellant-defendant, as such, ceased to be in

possession of it as an owner rather occupied it as a licensee for a

fixed period which stood determined by valid notice, leaving the

appellant-defendant with no subsisting right to remain in possession

of the suit premises.

xxx xxx xxx‖

(Emphasis Supplied)

121. It would also be fruitful to refer to the judgment of the Supreme Court

in the case of Suraj Lamp (Supra) wherein, the Supreme Court held that the

GPA would be considered a relevant document for protecting possession in a

property under Section 53-A of the TP Act. Thus, it was held as follows:

RFA 70/2019 Page 96 of 117

―xxx xxx xxx

24. We therefore reiterate that immovable property can be legally

and lawfully transferred/conveyed only by a registered deed of

conveyance. Transactions of the nature of ―GPA sales‖ or

―SA/GPA/will transfers‖ do not convey title and do not amount to

transfer, nor can they be recognised or valid mode of transfer of

immovable property. The courts will not treat such transactions as

completed or concluded transfers or as conveyances as they neither

convey title nor create any interest in an immovable property. They

cannot be recognised as deeds of title, except to the limited extent of

Section 53-A of the TP Act. Such transactions cannot be relied upon

or made the basis for mutations in municipal or revenue records. What

is stated above will apply not only to deeds of conveyance in regard to

freehold property but also to transfer of leasehold property. A lease

can be validly transferred only under a registered assignment of lease.

It is time that an end is put to the pernicious practice of SA/GPA/will

transactions known as GPA sales.

xxx xxx xxx

26. We have merely drawn attention to and reiterated the well-settled

legal position that SA/GPA/will transactions are not ―transfers‖ or

―sales‖ and that such transactions cannot be treated as completed

transfers or conveyances. They can continue to be treated as existing

agreements of sale. Nothing prevents the affected parties from

getting registered deeds of conveyance to complete their title. The

said ―SA/GPA/will transactions‖ may also be used to obtain specific

performance or to defend possession under Section 53-A of the TP

Act. If they are entered before this day, they may be relied upon to

apply for regularisation of allotments/leases by development

authorities. We make it clear that if the documents relating to

―SA/GPA/will transactions‖ have been accepted/acted upon by DDA

or other developmental authorities or by the municipal or Revenue

Authorities to effect mutation, they need not be disturbed, merely on

account of this decision.

27. We make it clear that our observations are not intended to in any

way affect the validity of sale agreements and powers of attorney

executed in genuine transactions. For example, a person may give a

power of attorney to his spouse, son, daughter, brother, sister or a

relative to manage his affairs or to execute a deed of conveyance. A

person may enter into a development agreement with a land developer

or builder for developing the land either by forming plots or by

constructing apartment buildings and in that behalf execute an

agreement of sale and grant a power of attorney empowering the

developer to execute agreements of sale or conveyances in regard to

RFA 70/2019 Page 97 of 117

individual plots of land or undivided shares in the land relating to

apartments in favour of prospective purchasers. In several States, the

execution of such development agreements and powers of attorney are

already regulated by law and subjected to specific stamp duty. Our

observations regarding ―SA/GPA/will transactions‖ are not intended

to apply to such bona fide/genuine transactions.

xxx xxx xxx‖

(Emphasis Supplied)

122. In regard to Section 53-A of the TP Act, the Supreme Court in the case

of Ramesh Chand (D) Thr. Lrs. Versus Suresh Chand and Another

20

, has

held that the main ingredient for taking shelter under Section 53-A of the TP

Act is the factum of possession. Further, the Supreme Court reiterated that if

the conditions of Section 53-A of TP Act are fulfilled, then notwithstanding

that the transfer has not been completed in the manner prescribed by law, the

transferor will be debarred from taking the possession of the property. The

relevant extract from the aforesaid judgment is reproduced as under:

―xxx xxx xxx

30. According to Section 53A of the TP Act, where there is a contract

to transfer any immovable property in writing and the transferee has

in part performance of the contract taken the possession of the

property or part thereof, then notwithstanding that the transfer has

not been completed in the manner prescribed by law, the transferor

will be debarred from taking the possession of the property. The

essential conditions for invoking the doctrine of part-performance as

envisaged u/s 53A of TP Act have been enunciated by this Court in the

case of Nathulal v. Phoolchand [(1969) 3 SCC 120] thus:

―9. The conditions necessary for making out the defence of part

performance to an action in ejectment by the owner are:

(1) that the transferor has contracted to transfer for consideration

any immovable property by writing signed by him or on his behalf

from which the terms necessary to constitute the transfer can be

ascertained with reasonable certainty;

20

2025 SCC OnLine SC 1879.

RFA 70/2019 Page 98 of 117

(2) that the transferee, has, in part performance of the contract,

taken possession of the property or any part thereof, or the

transferee, being already in possession continues in possession in

part performance of the contract;

(3) that the transferee has done some act in furtherance of the

contract; and

(4) that the transferee has performed or is willing to perform his

part of the contract.

If these conditions are fulfilled then notwithstanding that the

contract, though required to be registered, has not been registered,

or, where there is an instrument of transfer, that the transfer has not

been completed in the manner prescribed therefor by the law for the

time being in force, the transferor or any person claiming under him

is debarred from enforcing against the transferee any right in

respect of the property of which the transferee has taken or

continued in possession, other than a right expressly provided by the

terms of the contract.‖

31. A perusal of Section 53A of TP Act, as well as the case law on

point, it is forthcoming that one of the main ingredients for taking

shelter under Section 53A is the factum of possession. Unless the

transferee in the instrument of agreement to sale is able to prove that

he has been in possession of the suit property, no benefit u/s 53A will

be given. In the instant matter, the very fact that plaintiff has filed the

present suit for possession, along with other reliefs, shows that on the

date of filing of the suit, plaintiff was not in possession of the entire

suit property. Since there was no possession with the plaintiff, he

cannot derive any benefit under the doctrine of part-possession.

xxx xxx xxx‖

(Emphasis Supplied)

123. This Court has come to a considered finding that on the basis of the

evidence on record and considering the preponderance of probabilities, the

purchasers have been able to establish the payment of due amounts to the

sellers, fulfillment of their part of the contract and their possession of the suit

property. Whereas, the appellant had been unable to prove that any amounts

were due and payable by the purchasers to the sellers, in any manner

whatsoever.

RFA 70/2019 Page 99 of 117

124. Thus, the purchasers are entitled to the benefit under Section 53-A of

the TP Act. Resultantly, the appellant, claiming her right under the original

sellers, is barred from seeking to enforce any purported right in relation to

the suit property against the purchasers, by virtue of Section 53-A of the TP

Act.

125. The contention of the appellant that the respondent nos. 1 to 8 cannot

take recourse under Section 53-A of the TP Act as the relief of seeking

specific performance of the Agreement to Sell stands time barred, has to be

necessarily rejected. It is no longer res integra that the legal bar placed by

Section 53-A of the TP Act and the protection afforded thereunder to the

purchaser in question, would be available even if the time period for filing a

suit for specific performance, has elapsed.

126. The Supreme Court in the case of Shrimant Shamrao Suryavanshi

and Another Versus Pralhad Bhairoba Suryavanshi and Others

21

, has held

that the relief under Section 53-A of the TP Act is available even if specific

performance of agreement to sell is barred by limitation, in the following

manner:

―xxx xxx xxx

7. A perusal of Section 53-A shows that it does not forbid a

defendant transferee from taking a plea in his defence to protect his

possession over the suit property obtained in part-performance of a

contract even though the period of limitation for bringing a suit for

specific performance has expired. It also does not expressly provide

that a defendant transferee is not entitled to protect his possession

over the suit property taken in part-performance of the contract if

the period of limitation to bring a suit for specific performance has

expired. In absence of such a provision, we have to interpret the

provisions of Section 53-A in a scientific manner. It means to look

into the legislative history and structure of the provisions of Section

53-A of the Act.

21

(2002) 3 SCC 676.

RFA 70/2019 Page 100 of 117

xxx xxx xxx

15. The Special Committee's report which is reflected in the aims

and objects of the amending Act, 1929 shows that one of the

purposes of enacting Section 53-A was to provide protection to a

transferee who in part-performance of the contract had taken

possession of the property even if the limitation to bring a suit for

specific performance has expired. In that view of the matter, Section

53-A is required to be interpreted in the light of the recommendation

of the Special Committee's report and aims, objects contained in the

amending Act, 1929 of the Act and specially when Section 53-A itself

does not put any restriction to plea taken in defence by a transferee

to protect his possession under Section 53-A even if the period of

limitation to bring a suit for specific performance has expired.

16. But there are certain conditions which are required to be fulfilled if

a transferee wants to defend or protect his possession under Section

53-A of the Act. The necessary conditions are:

(1) there must be a contract to transfer for consideration of any

immovable property;

(2) the contract must be in writing, signed by the transferor, or by

someone on his behalf;

(3) the writing must be in such words from which the terms

necessary to construe the transfer can be ascertained;

(4) the transferee must in part-performance of the contract take

possession of the property, or of any part thereof;

(5) the transferee must have done some act in furtherance of the

contract; and

(6) the transferee must have performed or be willing to perform his

part of the contract.

xxx xxx xxx

20. It is, therefore, manifest that the Limitation Act does not

extinguish a defence, but only bars the remedy. Since the period of

limitation bars a suit for specific performance of a contract, if

brought after the period of limitation, it is open to a defendant in a

suit for recovery of possession brought by a transferor to take a plea

in defence of part-performance of the contract to protect his

possession, though he may not be able to enforce that right through

a suit or action.

xxx xxx xxx‖

(Emphasis Supplied)

RFA 70/2019 Page 101 of 117

127. In view of the detailed discussion hereinabove, the appellant stands

debarred from enforcing any right in the suit property, and is not entitled to

seek any reliefs, as prayed for in the suit in question.

128. Further, the reliance put by the appellant on the case of Suraj Lamp

(Supra) is misplaced. The only proposition laid down in the said case is that

title cannot be transferred without valid sale deed. The decision in the said

case does not seek to take away the subsisting rights of a GPA holder, and

cannot be used to negate the specific rights conveyed under a GPA. In the

present case, especially, with the Agreement to Sell and GPA being valid, the

rights of the purchasers, i.e., respondent nos. 1 to 8 herein, under the said

documents, remain in force.

129. Similarly, the reliance by the appellant on the case of M.S.

Ananthamurthy (Supra), is totally misplaced as the said judgment does not

apply to the facts and circumstances of the present case. In the said case,

though a GPA had been executed, possession of the property in the said case

was never given to the GPA holder. Subsequently, the LRs of the actual

owner sold the property in question therein to a third party, by way of a

registered sale deed. There were subsequent transfers of the property in the

said case by way of registered sale deed/gift deed. It is in these factual

circumstances that the Supreme Court held that no interest was transferred to

the GPA holder merely on the basis of the unregistered agreement to sell and

GPA.

130. However, in the present case, undisputedly possession of the suit

property already stands transferred to the purchasers, who have been in

possession of the same since the year 1989. This is coupled with the fact that

the original sellers never challenged either the possession of the purchasers

RFA 70/2019 Page 102 of 117

or their right under the Agreement to Sell and GPA, in any manner

whatsoever. Thus, the aforesaid case of M.S. Ananthamurthy (Supra), is

clearly distinguishable and not applicable to the present case.

e. Suit of the appellant for mere possession and mesne profits is not

maintainable in view of validity of the Agreement to Sell and GPA, and

is also barred by limitation

131. In the present case, as per the amended plaint, suit was filed seeking

mandatory injunction, for restraining the respondent nos. 1 to 8 from using

the suit property and for delivery of vacant and peaceful possession of the

suit property to the appellant herein. In the alternative, appellant has prayed

for possession of the suit property, mesne profits, and decree of injunction

for restraining the respondent nos. 1 to 8 from creating any third-party rights

in the suit property. In this factual scenario, the Trial Court held that the suit

filed by the appellant was barred by limitation.

132. The contention of the appellant herein is that the suit would be

governed by Article 65 of the Schedule to Limitation Act, and therefore, the

present suit is maintainable, having been filed within the period of 12 years.

133. Per contra, the argument raised by the respondent nos. 1 to 8 is that

since the substantive relief in the suit would have been of

declaration/cancellation, therefore, Article 58 of the Schedule to Limitation

Act would be applicable, which prescribes a limitation period of three years.

The said period of limitation for challenging the Agreement to Sell, and the

GPA, expired on 24

th

January, 1992 and 03

rd

August, 1992, respectively,

rendering the suit filed by the appellant, grossly barred by limitation.

134. In this regard, it is to be noted that the plaint admits and acknowledges

execution of the Agreement to Sell and GPA, in favour of the purchasers, as

RFA 70/2019 Page 103 of 117

well as the fact that possession of the suit property was handed over to the

purchasers, pursuant to the said documents.

135. It is an admitted fact that Smt. Nirmal Krishan, along with Shri

Sanjeev Sethi and Shri Rajeev Luthra, had executed the Agreement to Sell

dated 24

th

January, 1989 in favour of respondent nos. 1 to 8 herein. Further,

the contention of the appellant that the Agreement to Sell stood

automatically cancelled, has already been rejected by this Court.

136. Furthermore, it is also an admitted position that the sellers executed

the GPA in favour of respondent no. 7 herein, i.e., Shri U.S. Sitani, to

facilitate handing over of the possession of the suit property to the

purchasers/respondent nos. 1 to 8. It is on the strength of this GPA, that the

suit property was got vacated by the purchasers from the tenants occupying

portions of the suit property. Besides, the plaint raises absolutely no

challenge to the GPA. Pertinently, this Court has already held in the

preceding paragraphs that the said GPA was irrevocable, and did not lapse on

the demise of Smt. Nirmal Krishan.

137. It is to be noted that the purchasers, as defendant nos. 1 to 8 in the

suit, have stated in their written statement that they have been in continuous

possession since the year 1989, and no dispute as to the title had been raised

in the last 11 years by the original sellers.

138. Additionally, the appellant has placed reliance on the alleged letter

dated 23

rd

November, 1993 purportedly sent by Shri G.D. Krishan, asking

the purchasers to pay the balance sale consideration, failing which the

Agreement to Sell, shall stand cancelled. However, as noted herein above,

the acknowledgement card with respect to the said letter is of a dubious

nature, and the appellant has been unable to prove the same. Even otherwise,

RFA 70/2019 Page 104 of 117

said alleged letter becomes immaterial on account of the fact that Shri G.D.

Krishan never took any steps in furtherance of the alleged letter.

139. Thus, the possession of the purchasers is undisputed and has been

established during the course of evidence. It is also undisputed that the

purchasers are in possession of the suit property on the basis of the

Agreement to Sell, and GPA in their favour.

140. In the present case, the contesting respondents are admittedly not

trespassers, nor persons who have taken forcible possession of the property.

Rather, they are purchasers under an Agreement to Sell, and power of

attorney holder under an irrevocable GPA.

141. These documents, i.e., the Agreement to Sell and the GPA, grant rights

and interests, including ‗de-facto possessory rights‘ to the purchasers in the

suit property. These documents would, thus, create a cloud or some apparent

defect in the title of the original sellers, and the persons claiming under

them, which also includes the appellant herein. Therefore, where the

appellant is admittedly not in possession of the suit property, and has filed

the suit seeking possession on the basis of title, she must necessarily remove

the cloud over her title in the suit property by seeking necessary declaratory

reliefs.

142. Accordingly, in view of the valid rights being conferred upon the

purchasers in view of the Agreement to Sell and the GPA, followed by

handing over possession to the purchasers, this Court rejects the contention

of the appellant that the said documents did not create any right or interest in

favour of the purchasers. Thus, the contention of the appellant, that there

was no need to challenge the said documents, does not hold any water and is

accordingly rejected.

RFA 70/2019 Page 105 of 117

143. In view of the aforesaid, the relief of declaration/cancellation that

ought to have been sought by the plaintiffs in the suit would have been in the

nature of ‗substantive relief‘. Whereas, the relief of mandatory injunction

and possession, as sought by the plaintiffs in the suit, is a ‗consequential

relief‘, which could have only been granted if the declaratory relief of title or

cancellation of the Agreement to Sell and GPA, had been sought.

144. Without challenging the transaction documents, the consequential

reliefs as claimed, are not maintainable. With the purchasers having been

granted wide sweeping rights with respect to the suit property by way of the

GPA, the consequential reliefs as sought in the suit, are not maintainable and

are barred by law, since the GPA remains unchallenged.

145. Thus, a simpliciter suit for injunction/possession cannot lie against the

contesting respondents. The reliefs, as sought in the plaint, i.e., the decree of

mandatory injunction, possession, mesne profits and permanent injunction,

are not maintainable, since principal declaratory reliefs challenging and

seeking cancellation of the Agreement to Sell and GPA have not been

sought.

146. The law is well settled in this regard that where the principal

declaratory relief is barred by limitation, the consequential reliefs, which

derive their very foundation and enforceability from the existence of the

declaratory decree, would also collapse as being time barred. This Court is

reminded of the adage that ‗where the foundation falls, all actions flowing

therefrom also collapse‘.

147. In the case of Padhiyar Prahladji Chenaji (Deceased) Through

Legal Representatives Versus Maniben Jagmalbhai (Deceased) Through

RFA 70/2019 Page 106 of 117

Legal Representatives and Others

22

, it was held that once the suit is held to

be barred by limitation qua the declaratory relief and when the relief for

permanent injunction was a consequential relief, the prayer for permanent

injunction, which was a consequential relief can also be said to be barred by

limitation. It has been held that under normal circumstances, the relief of

permanent injunction sought is a substantive relief and the period of

limitation would commence from the date on which the possession is sought

to be disturbed, so long as the interference in possession is continuous.

However, in the case of a consequential relief, when the substantive relief of

declaration is held to be barred by limitation, the said principle shall not be

applicable. Thus, it has been held as follows:

―xxx xxx xxx

17. Therefore, once the suit is held to be barred by limitation qua the

declaratory relief and when the relief for permanent injunction was

a consequential relief, the prayer for permanent injunction, which

was a consequential relief can also be said to be barred by limitation.

It is true that under normal circumstances, the relief of permanent

injunction sought is a substantive relief and the period of limitation

would commence from the date on which the possession is sought to

be disturbed so long as the interference in possession continuous.

However, in the case of a consequential relief, when the substantive

relief of declaration is held to be barred by limitation, the said

principle shall not be applicable.

xxx xxx xxx‖

(Emphasis Supplied)

148. Likewise, in the case of Raj Kumari Garg Versus S.M. Ezaz & Ors.

23

,

it has been held that in a suit having been filed for seeking possession,

without seeking declaration of cancellation of documents, when the prayer

for declaration would be time barred under Article 58 of the Limitation Act,

22

2022 SCC OnLine SC 258.

23

2012 (132) DRJ 108 (DB).

RFA 70/2019 Page 107 of 117

mere suit for possession would also be barred by limitation. Thus, it was

held as follows:

―xxx xxx xxx

19. The learned single Judge has referred to the provisions of the

Limitation Act, 1963 (hereinafter referred to as the ‗Limitation Act‘).

It can really not be disputed that Article 58 of the Schedule to the

Limitation Act prescribing period of limitation for suits relating to

declaratory decrees would apply if the documents have to be

cancelled. The period prescribed is three (3) years from the date the

right to sue accrues. In fact, under Section 3 of the Limitation Act,

suits, appeals and applications made after the prescribed period of

limitation, subject to the provisions of Sections 4 to 24 of the

Limitation Act, are liable to be dismissed even though limitation may

not have been set up as a defence. If the appellant was to claim

cancellation of the documents executed in favour of respondents 3 &

4 on 7.7.1998, execution of which is not denied nor receipt of full

consideration with possession being parted, the period of limitation

had expired long time back in July, 2001. The suit for possession

was filed in the year 2009, i.e., after eleven (11) years from the date

when the cause of action accrued.

20. The reason why the three issues have been dealt with together is

because of the ingenious frame of the suit and the plea sought to be

advanced on behalf of the appellant that she does not seek

cancellation of documents but only seeks possession and, thus, the

limitation should be treated as twelve (12) years.

21. The aforesaid plea is only stated to be rejected as the issue is no

more res integra in view of the judgement of the Division Bench of this

Court in Jyotika Kumar v. Anil Soni156 (2009) DLT 685 (DB) : 2009

(108) DRJ 119 [DB]. The factual matrix is quite similar where

possession was sought without seeking cancellation of the

documents and also from parties with whom there was no privity of

contract. Thus, the judgement applies on all fours. It has been

observed that there can be no valid cause of action on the date of

filing of the suit when the prayer for declaration would be time

barred under Article 58 of the Limitation Act. A mere suit for

possession could not have been maintained.

22. It is quite obvious that the appellant has filed the mere suit for

possession with an injunction without seeking declaration of

cancellation of documents being conscious of the claim for

cancellation being beyond time and, thus, would have faced a

defence of the suit being barred by time. An illusion of cause of

action is sought to be created to get over the period of limitation.

RFA 70/2019 Page 108 of 117

There has to be a meaningful reading of the plaint and not a mere

formal reading as observed by the Supreme Court in T.

Arivandandam v. T.V. Satyapal (1977) 4 SCC 467.

xxx xxx xxx

24. We are in complete agreement with the views expressed by the

learned single Judge that the plaint as framed merely for possession

cannot be maintained in law without the relief of declaration for

cancellation of the documents executed by the appellant in favour of

respondents 3 & 4 and the real issue cannot be obfuscated by

seeking to raise a plea that only possession is being sought (and that

too from respondents 1 & 2) as those respondents do not have any

right to continue in possession even though there is no privity of

contract between the appellant and respondents 1 & 2.

xxx xxx xxx

26. There can be no doubt that the parties have contracted to

transfer the immovable property when they executed the agreement

to sell & purchase and collateral documents. It is also coupled with

possession being parted with by the appellant in favour of

respondents 3 & 4 in part performance of the contract and full

consideration stands paid by respondents 3 & 4 and appropriated by

the appellant. Thus, the prohibition envisaged against the transferor

in the absence of any instrument to transfer would come into play

under the provisions of Section 53A of the TP Act. In fact, the right to

make further transfers has been specifically conferred under Clause

18 of the agreement to sell & purchase dated 7.7.1998 as observed by

the learned single Judge. It is in exercise of such a right that

respondents 3 & 4 executed the agreement to sell dated 1.5.2004 in

favour of respondents 1 & 2.

xxx xxx xxx

29. Learned counsel for the appellant laid emphasis only on the views

expressed by the Supreme Court in Rambhau Namdeo Gajre

case (supra), which places reliance on State of U.P. v. District Judge

case (supra). The similarity between the present case and the facts of

that case rest only with there being an agreement to sell without there

being a sale deed. There were no collateral documents executed. The

party purchasing under the agreement to sell sold it further to a third

party who in turn claimed the defence of Section 53A of the TP Act.

One important fact in that case noticed is that the original agreement

to sell was not proved and neither was it brought on record. It is in

these circumstances that the subsequent purchaser was held not

entitled to the defence of Section 53A of the TP Act. In the facts of the

present case, all the rights are transferred by the appellant to

RFA 70/2019 Page 109 of 117

respondents 3 & 4 under the agreement to sell & purchase which is

duly registered and is accompanied by other collateral documents

like the GPA, SPA, Will, etc. and parting of notional possession as

there was a licensee. Ultimately the physical possession also came to

respondents 3 & 4. A specific clause 18 of the agreement to sell &

purchase confers unfettered and uninterrupted rights and powers on

Respondents 3 & 4 to further sell or otherwise transfer, in any

manner, in whole or in part to anybody and that the appellant would

have no claim or objection to the same. Therefore, the appellant

gave the unfettered right of assignment of their rights under the

agreement to sell dated 7.7.1998 to respondents 3 & 4. There was no

such authority in Rambhau Namdeo Gajre case (supra). In the present

case both the first purchaser and the subsequent purchase have been

made parties and respondents 1 & 2 are claiming under respondents 3

& 4. Respondents 3 & 4 have already sued for getting the property

converted into freehold and for getting the conveyance deed executed

in their favour as the intent of the appellant has become dishonest

when the conversion was applied for conversion of leasehold rights

into freehold.

30. Section 53A of the T.P.A. debars the transferor or any person

claiming under him‖ from enforcing against ―the transferee and

persons claims under him‖ any right in respect of the property of

which the transferee has taken or continued in possession, other

than the right expressly provided by the terms of the contract. The

said provision, therefore, consciously protects the rights of not only

the transferee, but also of persons claiming under the transferee,

even though the rights of the transferee are not perfected as there is

only an agreement to sell and not a registered sale deed/conveyance

deed. Therefore, it cannot be argued that a person claiming under

the transferee would not be entitled to protect his possession, merely

because the title of the transferee was not perfected. The intention of

the law clearly is to protect the rights of not only the transferee, but

also of persons claiming under the transferee, even though the

transferee does not have perfect title. If the transferee had a

perfected title on the basis of a registered conveyance deed, the

question of involving Section 53A of the TPA would not arise.

xxx xxx xxx

34. Another aspect taken note of in the impugned order and which was

canvassed before us arises from the judgement of the Supreme Court

in Suraj Lamp & Industries Private Limited (2) Through

Director v. State of Haryana(2012) 1 SCC 656. The execution of

agreement to sell & purchase coupled with collateral documents like

GPA, SPA, Will, etc. has been a common practice in Delhi. The

validity of such a practice has been examined in the said judgement

RFA 70/2019 Page 110 of 117

and it has been held that the bunch of such documents cannot be

recognized as deeds of title, ―except to the limited extent of Section

53A of the TP Act‖. In fact, it has been observed in paras 26 & 27

that the observations of the Supreme Court are not intended in any

way to affect the validity and powers of attorney executed in genuine

transactions and the bunch of documents can continue to be treated

as existing agreements of sale which would not prevent the affected

parties from getting the registered deeds of conveyance to complete

their title. The said bunch of documents can also be used to obtain

specific performance or to defend possession under Section 53A of

the TP Act. We reproduce para 26 of the said judgement as under:

―26. We have merely drawn attention to and reiterated the

well-settled legal position that SA/GPA/WILL transactions are

not ‗transfers‘ or ‗sales‘ and that such transactions cannot be

treated as completed transfers or conveyances. They can

continue to be treated as existing agreement of sale. Nothing

prevents affected parties from getting registered Deeds of

Conveyance to complete their title. The said ‗SA/GPA/WILL

transactions‘ may also be used to obtain specific performance

or to defend possession under Section 53A of Transfer of

Property Act. If they are entered before this day, they may be

relied upon to apply for regularization of allotments/leases by

Development Authorities. We make it clear that if the documents

relating to ‗SA/GPA/WILL transactions‘ has been accepted

acted upon by DDA or other developmental authorities or by the

Municipal or revenue authorities to effect mutation, they need

not be disturbed, merely on account of this decision.‖

It is, thus, clear that the present case fits in with the legal principles

laid down and the defence of Section 53A of the TP Act in such a case

would be available to respondents 3 & 4 and since respondents 1 & 2

are claiming under them, similarly to them too.

xxx xxx xxx‖

(Emphasis Supplied)

149. Similarly, in the case of Mallavva and Another Versus

Kalsammanavara Kalamma and Others

24

, it was held that where the relief

for possession is a consequential relief and the substantive relief is for

declaration, the period of limitation is required to be considered with respect

24

2024 SCC OnLine SC 3846.

RFA 70/2019 Page 111 of 117

to the substantive relief claimed and not the consequential relief. Thus, it

was held as follows:

―xxx xxx xxx

35. The decision in the case of Rajpal Singh v. Saroj (Deceased)

through Legal Representatives &, (2022) 15 SCC 260, relied upon by

the learned counsel appearing for the appellants is also of no avail. In

the said case, this Court observed as under:

―14. The submission on behalf of the original plaintiff (now

represented through her heirs) that the prayer in the suit was also

for recovery of the possession and therefore the said suit was filed

within the period of twelve years and therefore the suit has been

filed within the period of limitation, cannot be accepted. Relief for

possession is a consequential prayer and the substantive prayer

was of cancellation of the sale deed dated 19-4-1996 and

therefore, the limitation period is required to be considered with

respect to the substantive relief claimed and not the consequential

relief. When a composite suit is filed for cancellation of the sale

deed as well as for recovery of the possession, the limitation

period is required to be considered with respect to the substantive

relief of cancellation of the sale deed, which would be three years

from the date of the knowledge of the sale deed sought to be

cancelled. Therefore, the suit, which was filed by the original

plaintiff for cancellation of the sale deed, can be said to be

substantive therefore the same was clearly barred by limitation.

Hence, the learned trial court ought to have dismissed the suit on

the ground that the suit was barred by limitation. As such the

learned first appellate court was justified and right in setting

aside the judgment and decree passed by the learned trial court

and consequently dismissing the suit. The High Court has

committed a grave error in quashing and setting aside a well-

reasoned and a detailed judgment and order passed by the first

appellate court dismissing the suit and consequently restoring the

judgment and decree passed by the trial court.‖

36. Thus, it appears that two reliefs were prayed for. One for

cancellation of the Sale Deed and the second for recovery of

possession. The Court treated the relief for possession as

consequential prayer and the relief for cancellation of Sale Deed as

the substantive prayer.

37. In such circumstances referred to above, the Court held that

if a composite suit is filed for cancellation of Sale Deed as well as for

recovery of possession, the limitation period should be considered

with respect to the substantive relief of cancellation of Sale Deed

RFA 70/2019 Page 112 of 117

which would be three years from the date of knowledge of Sale Deed

sought to be cancelled.

38. The dictum as laid in Rajpal Singh (supra) cannot be made

applicable to the facts and circumstances of the case on hand. The

reason is simple. Ordinarily when, a suit is filed for cancellation of

Sale Deed and recovery of possession, the same would suggest that

the title of the plaintiff has already been lost. By seeking to get the

Sale Deed set aside on the grounds as may have been urged in the

plaint, the plaintiff could be said to be trying to regain his title over

the suit property and recover the possession. In such circumstances,

the period of limitation would be three years and not twelve years.

39. In view of the aforesaid discussion, this appeal fails and is

hereby dismissed.

xxx xxx xxx‖

(Emphasis Supplied)

150. At this stage, it would also be fruitful to refer to the judgment passed

by the Division Bench of this Court in the case of Inderjeet Singh Bindra

Versus Ramesh Kumari and Others

25

, where in the facts of the said case, a

sale deed had been executed on the basis of a registered GPA, and

cancellation of only sale deed was sought in the plaint. Subsequent

application for amendment for seeking prayer for cancellation of GPA was

rejected by the Single Judge. The same was upheld by the Division Bench on

the ground that seeking the relief of cancellation of GPA would be barred by

limitation. Thus, the Division Bench, held as follows:

―xxx xxx xxx

16. The crux of the issue is whether it is Article 59 or Article 65,

which would apply to the present facts in hand. The aforesaid

Articles are reproduced as under:

59. To cancel or set aside an

instrument or decree or for the

rescission of a contract.

Three

years.

When the facts

entitling the plaintiff

to have the instrument

or decree cancelled

or set aside or the

25

2025 SCC OnLine Del 7100.

RFA 70/2019 Page 113 of 117

contract rescinded

first become known to

him.

65. For possession of immovable

property or any interest therein

based on title. Explanation.—

For the purposes of this

article— (a)where the suit is by

a remainderman, a reversioner

(other than a landlord) or a

devisee, the possession of the

defendant shall be deemed to

become adverse only when the

estate of the remainderman,

reversioner or devisee, as the

case may be, falls into

possession; (b) where the suit is

by a Hindu or Muslim entitled to

the possession of immovable

property on the death of a Hindu

or Muslim female, the

possession of the defendant shall

be deemed to become adverse

only when the female dies;

(c)where the suit is by a

purchaser at a sale in execution

of a decree when the judgment-

debtor was out of possession at

the date of the sale, the

purchaser shall be deemed to be

a representative of the judgment

debtor who was out of

possession.

Twelve

years.

When the possession

of the defendant

becomes adverse to

the plaintiff

xxx xxx xxx

18. Before determining the applicability of the aforesaid Articles to the

present case, a perusal of the difference between Sections 31 and 34 of

the Specific Relief Act, 1963 [hereinafter referred to as ‗SRA‘] is

required. Section 31 of the SRA empowers a person who is a party to

the written instrument to seek cancellation of the instrument, which is

void or voidable, to protect himself from the injury which such

instrument may cause. On the other hand, Section 34 of the SRA

provides that a person entitled to any legal character or to any right

as to any property may seek a declaration of such legal character or

right, when the same is denied or is likely to be denied by another

RFA 70/2019 Page 114 of 117

person. The distinction between the two provisions lies in the nature of

relief sought- Section 31 of the SRA pertains to the annulment of a

particular document, whereas Section 34 of the SRA pertains to the

declaration and establishment of a legal right or status as against a

claimant.

xxx xxx xxx

21. In the case in hand, the GPA is prima facie valid unless it is

proved that there was a revocation of the same. On a perusal of the

13 Sale Deeds, it is evident that they were executed by Mr. Bhullar in

the capacity of an agent of the Appellant, through the GPA executed

by the Appellant. Further, the Appellant has stated in Para 7 of the

plaint that he asked Mr. Bhullar to bring back the GPA, and

thereafter, he revoked the GPA. However, no written document

signifying the revocation of the GPA has been filed by the Appellant.

22. It is pertinent to note that a duly registered GPA can only be

revoked by a registered Deed of Revocation. Thus, in the absence of

a Deed of Revocation, this Court is prima facie of the view that the

GPA has not been revoked in accordance with the law. Accordingly,

Article 59 would be attracted as the fraud, which the Appellant

asserts is required to be proved.

23. Further, learned counsel representing the Appellant has placed

reliance on the judgment rendered by the Supreme Court in Shanti

Devi (supra), whereby in the absence of sale consideration being

tendered, the sale deed was made. Thus, in the eyes of law, the sale

deed cannot be said to be executed, and therefore, the plaintiff would

not be required to seek the cancellation of the said instrument.

However, in the case in hand, the instrument, i.e., the GPA prima facie

is a valid document. Hence, the aforesaid judgment is distinguishable

and not applicable to the present case.

24. Further, reliance is placed upon the judgment rendered in Life

Insurance Corporation of India (supra), whereby an amendment of

the plaint was sought, for the purpose of enhancing the amount

towards damages in a suit for specific performance of an agreement.

The issue, herein, was with regard to Sections 21(5) and 22(2) of the

SRA i.e., specific provisos permitting amendment of a plaint for

including a claim in cases where the plaintiff had not claimed

compensation earlier. The Court, herein, allowed the amendment.

However, the ratio of the aforesaid judgment is not applicable in the

case in hand as the same is different from the peculiar facts of the

present case.

25. Therefore, this Court is of the considered view that Article 59 is

attracted in the present case. Though the present suit is one for

possession, but the substantive relief is for cancellation/annulment

RFA 70/2019 Page 115 of 117

of the various Sale Deeds executed by the Appellant through his

GPA. By the proposed amendment, the prayer that was sought to be

introduced was for cancellation of the GPA after a period of eight

years after the Appellant came to know of the Sale Deeds executed

on the strength of GPA and after seven years of filing of the suit.

Thus, the relief sought to be added by the Amendment Application is

barred under Article 59.

xxx xxx xxx‖

(Emphasis Supplied)

151. As a sequitur to the aforesaid, it is manifest that where the principal

relief is barred by limitation, the consequential relief would also be time

barred. In the present facts, the principal relief of declaration/cancellation of

the Agreement to Sell and the GPA, would be governed under Article 58 of

the Limitation Act, and the same stands expired on 24

th

January, 1992 and

03

rd

August, 1992, respectively. Since the suit was filed in the year 1999, this

Court concurs with the finding of the Trial Court that the suit was barred by

limitation.

152. Even otherwise, where challenge to the Agreement to Sell and GPA

stands time barred, the appellant cannot be allowed to evade the laws of

limitation and use clever drafting to portray the suit as being simpliciter suit

for possession, injunction and mesne profit. What cannot be done directly,

cannot be allowed to be done indirectly. Reliance is placed in this regard on

the case of Basavraj Versus Indira and Others

26

, wherein, the Supreme

Court held as follows:

―xxx xxx xxx

16. In the case in hand, the compromise decree was passed on 14-10-

2004 in which the plaintiffs were party. The application for

amendment of the plaint was filed on 8-2-2010 i.e. 5 years and 03

months after passing of the compromise decree, which is sought to be

challenged by way of amendment. The limitation for challenging any

26

(2024) 3 SCC 705.

RFA 70/2019 Page 116 of 117

decree is three years (reference can be made to Article 59 in Part IV

of the Schedule attached to the Limitation Act, 1963). A fresh suit to

challenge the same may not be maintainable. Meaning thereby, the

relief sought by way of amendment was time-barred. As with the

passage of time, right had accrued in favour of the appellant with

reference to challenge to the compromise decree, the same cannot be

taken away. In case the amendment in the plaint is allowed, this will

certainly cause prejudice to the appellant. What cannot be done

directly, cannot be allowed to be done indirectly.

xxx xxx xxx‖

(Emphasis Supplied)

153. In view of the detailed discussed hereinabove, this Court finds no

infirmity with the finding of the Trial Court that the suit was barred by

limitation.

f. Appellant has approached this Court with unclean hands on account of

deliberate and intentional mis-statement before this Court

154. There is yet another aspect of the present matter which has to be

considered by this Court with regard to statements made by the plaintiffs in

the suit, i.e., the appellant and her brother, respondent no. 11 herein.

155. It is pertinent to note that when the issue of limitation was raised by

the contesting respondents in their written statement, the plaintiffs made an

assertion in the replication filed before the Trial Court that the plaintiffs,

have been living abroad most of the time, and thereby, were not able to

initiate any action with respect to the suit property earlier. However, during

the cross-examination before the Trial Court, the appellant categorically

stated that ―she has never resided in any country other than India‖.

156. Thus, clearly, the appellant made false statements on oath and

approached the Court with unclean hands.

RFA 70/2019 Page 117 of 117

g. Present litigation being a proxy litigation

157. Furthermore, the present litigation is nothing but a proxy litigation,

since the appellant is stated to have already sold her interest in the suit

property in favour of third parties, being Shri Mahesh Kapoor and Smt. Usha

Kapoor, for a sum of Rs. 77.50 Lacs, vide an Agreement to Sell dated 05

th

December, 2005. The appellant has admitted in her cross-examination that

after she gets possession of the suit property, she will sell it to one Shri

Mahesh Kapoor.

158. It is to be noted that upon the demise of the appellant on 07

th

September, 2020, an impleadment application was filed by the LRs of the

deceased appellant, as well as third parties, namely, Shri Mahesh Kapoor and

Smt. Usha Kapoor, seeking to assert their rights under the Agreement to Sell

dated 05

th

December, 2005. However, the said application for impleadment

qua the third parties, was dismissed by this Court vide order dated 05

th

May,

2022. Thus, it is manifest that the present proceedings are being pursued by

a speculative litigant who has invested in a disputed property.

CONCLUSION

159. On the basis of the detailed discussion hereinabove, this Court does

not find any error in the findings of the learned Trial Court. No merit is

found in the present appeal. The same is accordingly dismissed.

160. The pending applications also stand disposed of.

MINI PUSHKARNA

(JUDGE)

APRIL 17, 2026

Kr/Au/Ak/Sk