Supreme Court Half Yearly Digest 2025: Property Law

Code of Civil Procedure, 1908; Order VII Rule 11 - Locus Standi of Proposed Purchaser under Agreement to Sell in Suit for Permanent Injunction against Third Party - Held, a proposed purchaser under an agreement to sell lacks locus standi to file a suit for a permanent injunction against a third party claiming independent title and possession of the property, as such an agreement does not confer proprietary rights. The rights under an agreement to sell are personal, enforceable only against the vendor or, in limited cases under Section 53A of the Transfer of Property Act, 1882, against a subsequent transferee with notice, but not against third parties with no privity of contract. The suit by the respondent (proposed purchaser) was not maintainable due to the absence of the vendor as a party and lack of enforceable rights against the appellant (third party). The Supreme Court set aside the trial court and High Court's dismissal of the appellant's application under Order VII Rule 11, allowed the appeal, and held the suit for permanent injunction unsustainable due to the respondent's lack of locus standi and absence of privity with the appellant. (Paras 15, 16) Correspondence RBANMS Educational Institution v. B. Gunashekar, 2025 LiveLaw (SC) 429 : 2025 INSC 490 : AIR 2025 SC 2065 Code of Civil Procedure, 1908; Order XX Rule 12A - Decree for specific performance of contract for the sale or lease of immovable property - Where an appeal is filed against the decree passed by the trial court and the appeal is disposed of, the appellate court should specify time to deposit the balance sale consideration. (Para 50) Ram Lal v. Jarnail Singh, 2025 LiveLaw (SC) 283 : 2025 INSC 301 Code of Civil Procedure, 1908 - Section 11 - Res Judicata and Findings on Title in Injunction Suits - In a suit for injunction, where the question of title is directly and substantially in issue and a finding on title is necessary to grant the injunction, with a specific issue on title framed, a separate prayer for declaration of title is not mandatory. A subsequent suit on title will be barred by res judicata if title-related facts were pleaded and adjudicated by the Trial Court, as findings on possession may depend solely on title. However, if a finding on title is not essential for deciding possession or granting an injunction, or no specific issue on title is framed, any observations on title are incidental and do not attract res judicata. Findings on title in an earlier suit will operate as res judicata in a later suit only if title was directly and substantially in issue. (Para 58, 59) M.S. Ananthamurthy v. J. Manjula, 2025 LiveLaw (SC) 257 : 2025 INSC 273 Code of Civil Procedure, 1908 - Suit for Injunction Simpliciter - Effect of NonChallenge to Validity of Documents - The appellants' argument that the respondent did not challenge the validity of the General Power of Attorney (GPA) and agreement to sell dated 04.04.1986 or the registered sale deed dated 01.04.1998 does not alter the legal position of the parties. In a suit for injunction simpliciter, the absence of a specific challenge to the validity of these documents or a separate prayer for declaration of title does not impact the legal standing of the parties when no direct challenge to the instruments' validity is raised. (Para 57) M.S. Ananthamurthy v. J. Manjula, 2025 LiveLaw (SC) 257 : 2025 INSC 273 Contract Act, 1872, Section 202 - Transfer of Property Act, 1882, Sections 54, 55 - Registration Act, 1908, Section 17(1)(b) - A General Power of Attorney (POA) without a proprietary interest in favor of the agent is revocable and terminates on the principal's death under Section 202 of the Contract Act, 1872. The use of the term "irrevocable" in a POA does not render it irrevocable unless coupled with a proprietary interest in the subject matter. An unregistered agreement to sell, even when executed with a POA, does not confer title or ownership to the agent, as a registered sale deed is mandatory for transferring immovable property under Sections 54 and 55 of the Transfer of Property Act, 1882. A POA and agreement to sell, even read together, do not create a proprietary interest unless registered under Section 17(1)(b) of the Registration Act, 1908. A sale executed by a POA holder after the principal's death is invalid due to termination of the agency. The Supreme Court upheld the High Court's grant of a permanent injunction in favor of the respondent, affirming the legal heirs' title to the property. (Paras 45-48, 55) M.S. Ananthamurthy v. J. Manjula, 2025 LiveLaw (SC) 257 : 2025 INSC 273 Contract Act, 1872; Section 74 - Whether forfeiture of earnest money under an Advance Sale Agreement (ATS) is penal in nature - The Supreme Court upheld the forfeiture of Rs. 20 lakhs paid as earnest money under the ATS, dismissing the purchaser's claim that it could not be forfeited as part of...

Supreme Court Half Yearly Digest 2025: Property Law

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Supreme Court Half Yearly Digest 2025: Property Law

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