In a recent judgment, the Delhi High Court observed that it is permissible to grant the relief of specific performance to execute a sale document against an unregistered agreement to sell when possession of the property is not handed over.
The judgment was passed by the Delhi High Court in the matter of Rishi Raj vs. Rakesh Yadav, RFA 700/2016 & CM APPL. 44927/2017 decided on 22.05.2018.
|The appeal arose out of a judgment whereby the Trial Court rejected the relief of specific performance, but granted the alternate relief of recovery of Rs.8,00,000/- in favour of the Plaintiff.
A set of documents including a General Power of Attorney, Agreement to Sell, Receipt and Will were executed between Mr. Rishi Raj and the Plaintiff on 06.08.2013 in respect of the suit property. The said documents were signed by Mr. Rishi Raj and the Plaintiff and two witnesses. The execution of these documents is not disputed by either of the parties. The Trial Court refused the grant of specific performance relying upon the judgment of Supreme Court in Suraj Lamp and Industries Pvt. Ltd. vs. State of Haryana & Anr for want of registration. The case in the plaint was that despite the Agreement dated 06.08.2013 having been executed, Defendant No.4, who was in possession, as a caretaker of Mr. Rishi Raj, did not handover the suit property to the Plaintiff. This led to filing of the present suit.
The question before this Court was whether the said set of documents required registration and if so, as to whether plaintiff is entitled to specific performance
The Delhi High Court held succinctly stated the position of law as follows: There is a fundamental difference where a sale is to be recognized merely on the basis of an Agreement to Sell, Power of Attorney, Will etc., and a case where specific performance is sought based on an unregistered Agreement to Sell. In the latter case, the party is seeking the Court’s intervention to conclude the sale transaction, which had commenced with the Agreement to Sell. The Sale is yet to take place. In the case of an Agreement to Sell there are two categories viz., one wherein simultaneously with the execution of the agreement, possession of the property is handed over and one in which no possession is handed over. If the agreement to sell is not accompanied with possession of the property, then the same does not require registration. If the agreement is accompanied with possession, and is not registered, then possession is capable of being protected under Section 53A of the TP Act. However, for the same to be recognized as a sale, it would have to be registered, in view of the amendments carried out in Sections 17(1A) of the Registration Act and 53A of the TP Act. Based on the above position, the Court held that it is permissible in law to seek specific performance of an unregistered agreement to sell, when possession of the property has not been handed over.
Applying the law to the facts of the present case, the Court held that it is clear that physical possession of the property was not handed over to the Plaintiff at the time of the execution of the documents dated 06.08.2013 therefore, the same did not require registration. Therefore, the Court was pleased to grant the relief of specific performance to the Plaintiff against an unregistered Agreement to Sell and directed both parties to execute the documents of sale within four weeks.