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  • Section 54 and 55 of the Transfer of Property Act, 1882
  • Order 39 Rule 2A
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
  • Section 54 and 55 of the Transfer of Property Act, 1882
  • Order 39 Rule 2A
Smart Summary

Factual and Procedural Background

The Respondent (Plaintiff) filed a suit seeking declaration, pre-emption, permanent injunction, partition, and possession, claiming to be a co-owner of the suit property to the extent of 1/6th undivided share. The suit is still pending. On 11.05.2010, the learned Single Judge issued a status quo order directing the Defendants to maintain the title and possession of the suit property without alteration, noting the Respondent's contention that the Defendants were contemplating selling the property. Subsequently, the Respondent filed an application under Order 39 Rule 2A alleging that the Appellants, despite being aware of the status quo order, executed an Agreement to Sell and a General Power of Attorney dated 16.09.2010 transferring a 1/3rd share of the property and possession to other parties. The learned Single Judge held the Appellants guilty of breaching the status quo order by these actions. The Appellants challenged this finding, admitting the execution of the Agreement and Power of Attorney but denying breach of the status quo order.

Legal Issues Presented

  1. Whether the execution of an Agreement to Sell and General Power of Attorney, along with handing over possession and receipt of sale consideration, constitutes a breach of the status quo order dated 11.05.2010?
  2. Whether the mere execution of an Agreement to Sell, without transfer of physical possession or registration of a deed of conveyance, violates the status quo order?
  3. Whether the principles laid down in Suraj Lamp and Industries Private Limited v. State of Haryana, regarding the non-transfer of title by an unregistered Agreement to Sell, apply to the question of breach of a status quo order?

Arguments of the Parties

Appellants' Arguments

  • The Appellants admitted executing the Agreement to Sell and General Power of Attorney dated 16.09.2010.
  • They contended that physical possession was not transferred and only an Agreement to Sell was executed.
  • They argued that the mere execution of an Agreement to Sell does not violate the status quo order as it does not create any right or title in the property.
  • Reliance was placed on the Supreme Court judgment in Suraj Lamp and Industries Private Limited v. State of Haryana, which held that an unregistered Agreement to Sell does not confer title or transfer interest in immovable property except limited rights under Section 53-A of the Transfer of Property Act, 1882.
  • They also argued that the Agreement to Sell dated 16.09.2010 was in furtherance of an earlier agreement and part of the sale consideration was received prior to the status quo order.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Suraj Lamp and Industries Private Limited v. State of Haryana and Another, 2012 (1) SCC 656 Held that a transfer of immovable property by way of sale requires a deed of conveyance duly stamped and registered under Sections 54 and 55 of the Transfer of Property Act, 1882; an unregistered Agreement to Sell does not transfer title but only confers limited rights under Section 53-A. The Court found the reliance on this precedent misplaced because the issue was not about the completion of sale or transfer of title but about violation of the status quo order by steps taken towards transfer, including execution of Agreement to Sell, receipt of consideration, handing over possession, and execution of a registered General Power of Attorney.

Court's Reasoning and Analysis

The Court analyzed the scope and effect of the status quo order dated 11.05.2010, which directed the parties to maintain the title and possession of the suit property unchanged. It held that maintaining status quo implies that the injuncted party cannot take any steps or enter into transactions affecting the title or possession, not only completed transactions but also every step towards such transactions. The Court found that the Appellants executed the Agreement to Sell and General Power of Attorney dated 16.09.2010 while being aware of the status quo order. The Agreement recorded that the entire sale consideration was paid, and vacant possession of portions of the property was handed over. The General Power of Attorney granted extensive powers, including the power to sell the share. Thus, the Court concluded that these acts amounted to violation of the status quo order. The Court rejected the Appellants' contention that mere execution of an Agreement to Sell without transfer of physical possession or registered conveyance does not breach the status quo order, distinguishing the present facts from the Suraj Lamp precedent. The Court also dismissed the argument concerning an earlier agreement and prior receipt of consideration due to lack of evidence in the Agreement to Sell dated 16.09.2010.

Holding and Implications

The appeal is dismissed.

The Court upheld the finding that the Appellants were guilty of breaching the status quo order dated 11.05.2010 by executing the Agreement to Sell, receiving sale consideration, handing over possession, and executing a registered General Power of Attorney. The direct effect is that the impugned order holding the Appellants guilty of contempt is affirmed. The opinion does not establish any new legal precedent beyond the factual determination of breach of the status quo order in this case.

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    Vinay Chhabra & Ors. v. Ms. Vera Ruth Rego Gonsalves

    SANJEEV SACHDEVA, J.

    1. The Appellants impugn order dated 19.12.2014 whereby the learned Single Judge has been pleased to hold the Appellants guilty of disobeying/committing breach of status quo order dated 11.05.2010. ===============================================================

    2. The Respondent (Plaintiff) has filed a Suit for declaration, pre- emption, permanent injunction, partition and possession claiming amongst other reliefs a decree of declaration that she is the co-owner of the suit property to the extent of 1/6th undivided share. The said Suit is still pending.

    3. By order dated 11.05.2010, the learned Single Judge, noting the contention of the Respondent that the Defendants were contemplating to sell the suit property, directed the Defendants to maintain status quo with regard to the title and possession of the suit property.

    4. The Respondent filed an application under Order 39 Rule 2A contending that the Appellant No. 2 (Respondent No. 1 in the application) by Agreement to Sell and Purchase and General Power of Attorney both dated 16.09.2010 had transferred her 1/3 rd share and also handed over possession of various portions of the suit property in favour of Appellant No. 1 (Respondent No. 2 in the application) and Appellant No. 3 (Respondent No. 3 in the application), in spite of =============================================================== being aware of the order dated 11.05.2010, agreed to be a witness to the said transaction.

    5. The impugned order held the Appellants guilty of disobeying/committing breach of status quo order dated 11.05.2010.

    6. The Appellants while admitting the execution of the Agreement to Sell and Purchase and General Power of Attorney dated 16.09.2010, deny that they are in breach of the status quo order dated 11.05.2010.

    7. Learned Counsel for the Appellants has contended that the Appellants have merely executed an Agreement to Sell and Purchase and the physical possession has not been transferred. It is further contended that mere execution of the Agreement to Sell does not violate the status quo order as the Agreement to Sell does not create any right or title in the property. Reliance is placed on the judgment of the Supreme Court in the case of Suraj Lamp and Industries Private Limited Vs. State of Haryana and Another, 2012 (1) SCC 656. ===============================================================

    8. We find no merit in the contention of the learned Counsel for the Appellants that by execution of the Agreement to Sell the status quo order has not been violated.

    9. The Appellants have not denied that at the time of the execution of the Agreement to Sell and the General Power of Attorney dated 16.09.2010 the Appellants were aware of the status quo order dated 11.05.2010.

    10. The Agreement to Sell dated 16.09.2010 records that the total sale consideration agreed upon for sale of the 1/3rd share of the Appellant No. 2 is Rs. 22,00,000/-. The entire sale consideration is recorded to have been paid, it further records that the vacant and peaceful possession of the portion of the basement floor and ground floor and terrace roof rights of first floor out of the said property has been handed over and the proprietary/symbolic/ownership possession of the first floor which is occupied by tenants has also been handed over and the purchaser is empowered to collect the rents, etc. ===============================================================

    11. Along with the Agreement to Sell, the Appellant No. 2 has also executed, in favour of the son of the Appellant No. 1, a registered General Power of Attorney dated 16.09.2010 giving all sorts of powers including the power to sell the 1/3rd share of the Appellant No.

    12. Direction to maintain status quo with regard to title and possession of the property implies that the injuncted party cannot thereafter take any steps or enter into any transaction whereby the status of the title or possession of the property are affected. It is not that only a completed transaction of sale or parting with possession would violate the status quo order but every step taken towards the completion of the transaction of sale or parting with possession would also amount to a violation/breach of the status quo order.

    13. In the present case, the Appellants have not only executed the Agreement to Sell but the entire sale consideration has been paid and received. The vacant physical possession of a part of the property has =============================================================== also been delivered and received. The contention of the Appellants that the physical possession has not been delivered cannot be believed in view of the contrary fact recorded in the Agreement to Sell and also the fact that a General Power of Attorney giving various powers including a power of sale has been executed and registered with the sub-registrar.

    14. The contention of the learned Counsel for the Appellants, that the Agreement to Sell dated 16.09.2010 was in furtherance to an earlier agreement and part of the sale consideration was received prior to the passing of the status quo order, holds no water in as much as there is no reference of a prior agreement to sell in the Agreement to Sell dated 16.09.2010 and also the fact that substantial sale consideration has been received, Agreement to Sell executed, vacant possession handed over and General Power of Attorney executed and registered after the status quo order.

    ===============================================================

    15. The reliance of the learned counsel on the decision of the Supreme Court in Suraj Lamps (supra) is misplaced as the same is not applicable in the facts of the present case. In the said judgment, the Supreme Court has laid down that a transfer of immoveable property by way of sale can only be by a deed of conveyance duly stamped and registered and any contract of sale, which is not a registered deed of conveyance, would fall short of the requirements of Section 54 and 55 of the Transfer of Property Act, 1882 and will not confer any title or transfer any interest in an immovable property except to the limited right granted by Section 53-A of the said Act.

    16. In the present case, the issue is not with regard to the completion of the transaction of sale but with regard to violation of the status quo order with regard to the title and possession of the property in suit. The execution of the Agreement to Sell, receipt of the sale consideration, handing over of the physical possession, execution and registration of the General Power of Attorney are steps taken =============================================================== towards the transfer of title and possession of the property and clearly amount to violation of the status quo order dated 11.05.2010.

    17. In our opinion, there is no infirmity in the impugned order and we find no merit in the appeal. The same is accordingly dismissed.

    SANJEEV SACHDEVA, J.

    ===============================================================

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    Comments

    Vinay Chhabra & Ors. v. Ms. Vera Ruth Rego Gonsalves
    (Jan 22, 2015)