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DAGGUMATI DASARADHA RAMI REDDY, GUNTUR. v. SECY., DLSA, GUNTUR & 8 OTHERS
Factual and Procedural Background
Respondent No. 7 filed O.S. No. 288 of 1996 before the I Additional Senior Civil Judge, Guntur, seeking partition of the plaint schedule property. After the original defendant died, his legal representatives were brought on record. At the request of the parties, the suit was referred to the Lok Adalat, which passed an award on 30.07.2008 in terms of their settlement. [1][2][3]
The petitioner, who was not a party to the suit, a member of the relevant family, or a party to the award, filed the writ petition challenging the award. [4]
Legal Issues Presented
- Whether the petitioner’s alleged agreement to sell dated 30.09.2005 provided a valid legal ground to challenge and set aside the Lok Adalat award. [4][5]
- Whether the petitioner acquired any legal right or interest in the property through the agreement to sell without obtaining a registered sale deed or filing a suit for specific performance. [6][7][8]
Arguments of the Parties
Petitioner's Arguments
- The petitioner contended that respondents 7 and 8 had executed an agreement to sell the property in his favour on 30.09.2005 and that the Lok Adalat settlement and award were obtained by suppressing that agreement. [4]
- The petitioner’s counsel submitted that the agreement of sale-cum-General Power of Attorney fixed no time limit for registration of the sale deed. [8]
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Meghmala v. G. Narasimha Reddy, (2010) 8 SCC 383 | An agreement to sell does not create any right or title in favour of the intending buyer. [9][10] | The Court applied this principle to hold that the petitioner, having only an agreement to sell and no registered sale deed, had no legal right enabling him to impeach the Lok Adalat award. [6][9][8] |
Court's Reasoning and Analysis
The Court held that the petitioner’s status under the alleged agreement to sell was only that of a prospective vendee. Since he had not obtained a registered sale deed, he had acquired no title to the property. [5][6]
The Court noted that the partition suit had been filed in 1996, whereas the alleged agreement to sell was executed in 2005. If the petitioner considered that agreement to confer rights upon him, his proper remedy was to seek specific performance rather than challenge the Lok Adalat award. [6]
Relying on Section 54 of the Transfer of Property Act and Meghmala v. G. Narasimha Reddy, the Court explained that a contract for sale by itself does not create any interest or charge in immovable property. [11][7][9][10]
The Court further reasoned that, under Article 54 of the Limitation Act, 1963, where no date for performance is fixed, a suit for specific performance must be filed within three years from the date when the plaintiff receives notice that performance has been refused. The Court considered that the petitioner had notice of the alleged denial of his rights when the partition suit was filed in 1996, yet he had not filed a specific-performance suit. [12][8]
The Court found that no fraud had been proved in obtaining the award and concluded that no valid legal ground existed for interference with it. [8]
Holding and Implications
The writ petition was dismissed. The Court imposed no costs, and any pending miscellaneous applications were closed. [13][14]
The petitioner was left to pursue a suit for specific performance if otherwise entitled, but could not use the alleged agreement to sell as a basis to invalidate the Lok Adalat award. [8] No broader implication was discussed, and no new precedent was set.
THE HON'BLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY
AND
THE HON'BLE SRI JUSTICE TARLADA RAJASEKHAR RAO WRIT PETITION No.18934 of 2010
ORDER:- (Per Hon'ble Sri Justice Cheekati Manavendranath Roy)
This Writ Petition is filed challenging the legal validity of the Award, dated 30.07.2008, passed by the Lok Adalath Bench, Guntur.
2. Heard learned counsel for the petitioner, Sri S. Lakshminarayana Reddy, learned Standing Counsel for respondent No.1 and learned counsel for respondents 2 to 6 and 9. None appeared for respondents 7 and 8.
3. Facts of the case lie in a narrow compass and may be stated as follows:
Respondent No.7 filed Suit in O.S. No.288 of 1996 on the file of the learned I Additional Senior Civil Judge, Guntur, against Chittepu Narayana Reddy for partition of the plaint schedule property. During the pendency of the Suit, the sole defendant Chittepu Narayana Reddy died. Thereafter, his legal representatives were brought on record, who are respondents 2 to 4 herein. During the pendency of the said Suit in the trial Court, on the request made by both the plaintiff and defendants therein, the matter was referred to Lok Adalath for settlement. Thereafter, the District Legal Services
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Authority, Guntur, passed the impugned Award in terms of the settlement that was arrived by both the plaintiff and the defendants therein.
4. The Award was passed in terms of the settlement that was arrived by both the plaintiff and the defendants on 30.07.2008.
5. Thereafter, the petitioner herein, who is not a party to the said Suit and who is also not a member of the family of the plaintiff and the defendant therein and who is also not a party to the Award, filed this Writ Petition questioning the legal validity of the said Award on the sole ground that respondents 7 and 8 herein, who are the family members of the plaintiff in the said Suit, executed an agreement to sell in respect of the property in question in favour of the petitioner on 30.09.2005. The Award is questioned mainly on the ground that suppressing the fact that respondents 7 and 8 herein have executed an agreement to sell, dated 30.09.2005, in favour of the petitioner that the said settlement was arrived at and the Award was obtained by the parties to the said Suit.
6. The said ground on which the petitioner, being a stranger to the said family and the property, sought to set aside the impugned Award is not a valid ground to consider and to set aside the impugned Award. The petitioner is only claiming his right in respect of the property in question on the basis of the agreement to sell,
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dated 30.09.2005, said to have been executed only by respondents 7 and 8. When that be the case, even though any such agreement to sell is executed by respondents 7 and 8, his status is only that of a prospective vendee. He did not acquire any title to the said property by obtaining a registered sale deed in respect of the said property. Admittedly, till now, the petitioner did not file any Suit for specific performance to enforce the said agreement to sell which was allegedly executed long back in the year 2005. The Suit for partition was filed in the year 1996. So, obviously the said agreement to sell is long after date of filing of the Suit. If really the petitioner got any right in respect of the said property on the basis of the said agreement to sell, he ought to have pursued his right and seek redressal of his grievance by way of filing a Suit for specific performance of the said agreement.
7. It is settled law that an agreement to sell or contract for sale by itself will not create any right or interest in respect of the prospective vendee in respect of the immovable property. The said legal position is made clear from the definition of 'sale' under Section 54 of the Transfer of Property Act. Section 54 of the Transfer of Property Act reads thus:
"54. "Sale" defined.—''Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
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Sale how made.—Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
Contract for sale.—A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property."
8. So, it is clear that Section 54 mandates that the contract for sale by itself will not create any interest or charge on such property. The said legal position is also made very clear by the Apex Court in the case of Meghmala v. G. Narasimha Reddy1wherein it is stated that an agreement to sell does not create any right or title in favour of the intending buyer. In para.16 of the said judgment, the Apex Court held as follows:
"….. It is settled legal proposition that an agreement to sell does not create any right, or title in favour of the intending buyer. The Society did not file suit for specific performance against the vendors…."
9. As noticed supra, till now, he did not file any Suit for specific performance. To a pointed question, as to what is the time fixed for
1 (201 0) 8 SCC 383
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registration of the sale deed in the said agreement, learned counsel for the petitioner would submit that there is no time limit fixed for registration of sale deed in the agreement of sale - cum - General Power of Attorney. If that be the case, as per Article 54 of the Limitation Act, 1963, the period of limitation is three years from the date when the petitioner got notice that performance of the said agreement to sell is refused. When the Suit was filed in the year 1996 itself, certainly he got knowledge that his right in respect of the said property on the basis of said agreement to sell is denied and performance is refused. So, he has to bring the Suit for specific performance within three years at least from that date. Even till today, he did not file any such Suit for specific performance. Therefore, he has no legal right in respect of the said property in question. Even now, if he is so advised and entitled, he has to seek his remedy by way of filing a Suit for specific performance and he cannot seek to impeach the validity of the Award passed by the Lok Adalat on that ground. No fraud is proved in this case in obtaining the said Award. Therefore, in the facts and circumstances of the case, there are no valid legal grounds warranting interference of this Court with the Award that was passed by the Lok Adalat.
9. Therefore, the Writ Petition is dismissed. No costs.
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As a sequel, miscellaneous applications, if any pending, shall stand closed.
______________________________________________
JUSTICE CHEEKATI MANAVENDRANATH ROY
_____________________________________
JUSTICE TARLADA RAJASEKHAR RAO
Date: 31.07.2023 AKN/DSV
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THE HON'BLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY
AND
THE HON'BLE SRI JUSTICE TARLADA RAJASEKHAR RAO WRIT PETITION No. 18934 of 2010
Date: 31-07-2023
AKN/DSV
7
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