DATE: 28/07/2025
COURT: High Court of Bombay
BENCH: Justice S.G. Chapalgaonkar
FACTS:
The dispute arises from a property
transaction between the petitioner (original defendant), the owner of the suit
land, and the respondent (original plaintiff), who agreed to purchase the land
for a total consideration of Rs.92,50,000. A notarised agreement (tabe-isar-pavti) was
executed, under which the plaintiff initially paid Rs.2,00,000 as earnest
money, followed by additional payments of Rs.20,00,000 on 8th July 2020 and
11th November 2020, making a total payment of Rs.22,00,000. The
agreement allowed the plaintiff to develop the land into saleable plots and pay
the remaining amount in installments from the proceeds. The defendant was to
cooperate by executing necessary documents and clearing
any encumbrances on the land. The final sale deed for the remaining land was to
be executed by 25th June 2022 upon full payment.
The plaintiff alleged that he was willing
to fulfil his obligations and requested the defendant to clear the existing
loans on the property to enable the sale deed’s execution, but the defendant
failed to comply. The defendant, on the other hand, admitted receiving Rs.22,00,000 but
claimed that the plaintiff did not develop or sell the plots within the
stipulated time. Consequently, the plaintiff sought a
temporary injunction to protect his possession and interest in the land. The
Trial Court granted the injunction, restraining the defendant from alienating
the suit property or disturbing the plaintiff’s possession except through due
legal process. This order was upheld by the District Judge in an appeal,
leading the defendant to approach the High Court in the present writ petition.
ISSUES:
The central issues in this case were
whether an unregistered and insufficiently stamped document titled
tabe-isar-pavti could be considered as a valid agreement to sell and form the
basis for granting a temporary injunction, and whether the plaintiff was
entitled to protection of possession over the suit property despite the legal
deficiencies in the agreement. The Court had to determine the admissibility of
the document and whether the plaintiff was in lawful possession of the
property.
JUDGEMENT WITH REASONING:
The High Court partly allowed the writ
petition. It upheld the temporary injunction restraining the plaintiff from
alienating the suit property but quashed the injunction that restrained the
defendant from disturbing the plaintiff’s possession. The Court found that the
plaintiff’s possession could not be presumed based on the inadmissible and
unregistered agreement and modified the lower courts’ orders accordingly.
The Court noted that the document dated
26.06.2020 was neither registered nor sufficiently stamped, being executed on a
Rs.100
bond paper and merely notarised. Under Section 35 of the Indian Stamp Act, such
an instrument cannot be admitted in evidence or relied upon for any purpose including
even for collateral purposes, unless it is duly stamped
and impounded in accordance with the law. The Court cited several precedents,
including Avinash Kumar Chauhan v. Vijay Krishna Mishra and Yellapu Uma
Maheswari v. Buddha Jagadheeswararao, to reinforce the principle that the bar under
Section 35 is absolute. The Karnataka High Court’s view in Dyavamma v. Balamma
was also referred to, supporting the proposition that even for granting interim
relief such as a temporary injunction, an insufficiently stamped document
cannot be relied upon unless duty and penalty are paid.
Despite the legal inadmissibility of the
agreement, the Court acknowledged that both parties admitted the execution of
the document and the payment of Rs.22,00,000 as part consideration. However, the Court
emphasized that the defendant clearly denied having
handed over possession of the suit land to the plaintiff. Since the lower
courts had wrongly presumed possession based on the inadmissible document, the
Court held that there was no independent or reliable evidence to prove that the
plaintiff was in possession. As such, the injunction preventing the defendant
from disturbing the plaintiff’s possession was legally unsustainable and was
therefore set aside. Only the injunction against alienation of the property was
allowed to continue, to protect the subject matter of the suit until final
adjudication.
ANALYSIS:
This case highlights the crucial role of
legal formalities in property transactions, particularly the enforceability and
evidentiary value of agreements that are neither registered nor properly
stamped. The High Court emphasized that under Section 35 of the Indian Stamp
Act, any instrument chargeable with duty must be duly stamped to be admissible
in evidence or relied upon by courts, even for interim relief such as a
temporary injunction. The petitioner’s argument that the so-called agreement to
sell was essentially a development agreement and lacked legal validity due to
improper stamping and registration was accepted. The Court made it clear that
possession cannot be presumed merely on the basis of an inadmissible document,
even if the transaction itself and part-payment are undisputed. Thus, the
principle of legal compliance in documentation was given precedence over
equitable claims or inferred possession.
At the same time, the Court adopted a
balanced approach by continuing the injunction against alienation of the suit
property. This demonstrates judicial caution in preventing irreversible harm to
the subject matter of the dispute pending trial. Although the plaintiff could
not substantiate lawful possession, the fact that both parties admitted the
transaction and part payment prompted the Court to protect the property from
third-party interference. This case therefore underscores the dual importance
of strict adherence to legal requirements for documentation and the courts’
discretion in preserving the status quo until final adjudication. The decision
reinforces that rights arising from informal or deficient agreements are
subject to procedural compliance and evidentiary rules, and any interim relief
must be based on admissible and valid evidence.
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