Case BriefsTribunals/Commissions/Regulatory Bodies

Odisha Real Estate Regulatory Authority, Bhubaneswar: Siddhanta Das, Chairperson, Pradeep Kumar Biswal, Member – I and Ramanath Panda, Member – II held that the present matter was not maintainable as the project which was the subject matter of the present case was completed before the commencement of The Real Estate (Regulation and Development) Act, 2016.

Respondent was developing a project and the complainant and her son applied for allotment of a flat in their favour in the project. Respondent was allotted a flat, and later an agreement was executed between both the parties for the sale of flat. Total consideration amount of the house was Rs 58,26,500 which included parking charges.

As per the above-mentioned agreement, the house in completed form should have been delivered within 40 months, i.e., by end of February 2016. Complainant continued to pay the amount as per the payment schedule of the agreement. Later in the year, 2015 the complainant requested another flat instead of the one which was already allotted. The said request was accepted. But the respondent could not complete the project before February 2016 as agreed upon by him in the agreement.

Complainant requested time and to hand over possession and to execute a sale deed.

Respondent in March 2016 requested the complainant to pay the final payment and to take possession of the unit. In September 2016, the complainant paid the rest of the amount towards full and final payment. Inspite of this, the respondent could not complete the flat.

In the year 2017, the flat was handed over to the complainant but the respondent before execution of the sale deed did not obtain an occupancy certificate from the local authority which was in violation of the provisions of the Act.

It was stated that the parking charges were covered under common area, hence the amount for the same should have been refunded. Respondent also took an extra amount towards VAT charges. Further, the complainant also sent a notice to the respondent for payment of Rs 4,59, 360 for delay in delivery of possession.

But the respondent did not make any payment.

In view of the above-stated reasons, the complainant approached the Authority.

Analysis, Law and Decision

Authority opined that delay in getting approval and non-availability of the building material required for construction are no ground to avoid the responsibility of payment of interest for the delay in delivery of possession.

Coram stated that it could not understand as to why the respondent started the project and collected money from buyers before getting sanctioned plan. Therefore, the respondent was held liable to pay interest on the whole amount for a period of 10 months provided the Act has application to the present project.

Further, from the recitals of the sale deed, it could not be established that the complainant paid separately for the parking cost. Hence, the complainant was not entitled to claim a refund of the parking cost.

VAT is collected as per the statutory provisions and paid t the Government. Hence it is only recoverable from Authority if sufficient reason is provided regarding payment made wrongly. Therefore, the complainant was not entitled to recover the VAT charges collected.

The Act of 2016 has application only to the project which are ongoing and the projects which are to be developed after commencement of the Act.

In the present matter, a completion certificate had been issued to the promoter by the empanelled architect of the BDA (local authority) in February 2016. The promoter presented the completion certificate before the local authority on the same day for the purpose of obtaining occupancy certificate. Therefore, for this project completion certificate was already issue prior to commencement of the Act.

It was observed that, The Real Estate (Regulation and Development) Act, 2016 got Presidential assent on 25-3-2016 and published in the Gazette of India on 26-3-2016. Therefore, the project was complete in all respect before the Act came into operation.

Hence, it was held that the Act had no application to the present project and that in view of the matter the case of complainant was not maintainable and complainant had no cause of action to file the case. [Ranjita Pati v. D.N. Homes (P) Ltd., Complaint Case No. 4 of 2021, decide don 2-12-2021]

Advocates before the Authority:

Advocate for the complaint: C. Ray and associates

Advocate for the respondents: P.C. Mohapatra and associates

Case BriefsDistrict Court

Saket Courts, New Delhi: Swati Gupta, Metropolitan Magistrate reiterated what is expected of an accused to rebut the statutory presumption against him in cases of cheque dishonour under Section 138 of the Negotiable Instruments Act, 1881.

Brief facts

Complainant and accused had entered into an agreement to sell the property owned by the wife of accused for a total sale consideration of Rs 58 lakhs. The said property was to be purchased in the name of the wife of the complainant.

For the above said purchase complainant made an advance payment of Rs 24 lakhs to the accused. Later, the accused backed out of the deal and was liable to return the amount paid by the complainant as advance. Further, to discharge his liability, in part, the accused issued the cheque for a sum of Rs 5 lakhs in favour of the complainant.

When the complainant presented the cheque in question for encashment at his bank, the said cheque was returned unpaid with remarks “payment stopped by drawer”.

Thereafter, the complainant issued a legal demand notice to the accused, demanding payment of the dishonoured cheque amount. Despite the notice, the amount was not paid within 15 days mandatory payment.

In view of the above background, the present complaint under Section 138 of the Negotiable Instruments Act, 1881 was moved before the Court.

Settled Legal Position of Law

Under Section 138 of the NI Act against the accused, the complainant must prove the following:

(i) the accused issued a cheque on an account maintained by him with a bank.

(ii) the said cheque has been issued in discharge, in whole or in part, of any legal debt or other liability, which is legally enforceable.

(iii) the said cheque has been presented to the bank within a period of three months from the date of cheque or within the period of its validity.

(iv) the aforesaid cheque, when presented for encashment, was returned unpaid/dishonoured.

(v) the payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque.

(vi) the drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.

The Court noted that the complainant discharged its initial burden and successfully established the above-stated ingredients of offence under Section 138 of the NI Act against the accused.

Rebuttal of the Mandatory Presumption

It is settled law that the presumptions may be rebutted by the accused either by leading direct evidence and in exceptional cases from the case set out by the complainant himself. The burden of proof was to be discharged by the accused on a preponderance of probabilities.

Further, the presumption under Section 139 of the NI Act cannot be rebutted upon a mere denial. The same can be rebutted by the accused only by leading cogent evidence.

The Court found that admittedly, Rs 24 lakhs were paid by the complainant to the accused towards advance payment for purchase of the subject property, The cancellation agreement specifying the details of the cheque in question was also admittedly, executed between the accused and the complainant.

The cheque in question was issued by the accused to the complainant in discharge of part liability in pursuance of the cancellation agreement.

In the Court’s opinion, the accused miserably failed to rebut the mandatory presumptions under Section 118(a) and 139 of the NI Act even on a preponderance of probabilities, while the complainant succeeded in proving his case beyond reasonable doubt.

Therefore, accused was held guilty and convicted of the offence under Section 138 of the NI Act. [Ramesh Kumar v. Balwant Singh, CT No. 466077 of 2016, decided on 12-10-2021]

Case BriefsSupreme Court

Supreme Court: Stating that readiness and willingness are necessary for the purpose of passing a decree of specific performance, Division Bench of M.R. Shah and A.S. Bopanna, JJ., expressed that,

Straightaway to rely upon the affidavit without amending the plaint and the pleadings is wholly impermissible under the law.

Factual Background

Plaintiff and the defendant entered into a sale agreement wherein the defendant agreed to sell the same for a sale consideration of Rs 16.20 lakhs to the plaintiff. A part sale consideration of Rs 3,60,001 was paid at the time of execution of the agreement to sell.

Amongst the number of conditions stipulated in the agreement to sell, one of the conditions was that the defendant as original owner was required to evict the tenants from the property in question thereafter to execute the sale deed on receipt of the full sale consideration.

In view of the above condition, plaintiff sent a legal notice to defendant asking to evict the tenants from the property in question and to execute the sale deed on receipt of balance sale consideration vide a notice.

Plaintiff approached the Trial Court for specific performance of the contract.

Plaintiff’s case was that he was ready and willing to perform his part of the contract, but the defendant did not evict the tenants and come forward to execute the sale deed.

Trial Court held that the plaintiff was not willing to get the sale deed executed as it is, and, therefore, held the issue of willingness against the plaintiff. Court also added that the defendant failed to prove that tenants had vacated the suit property as claimed, however, the Trial Court held on willingness against the plaintiff by observing that the plaintiff had not shown the willingness to purchase the property with the tenants.

In an appeal filed before the High Court under Section 96 read with Order XLI by the impugned judgment and order, High Court allowed the said appeal and quashed and set aside the decree passed by the Trial Court dismissing the suit and consequently had decreed the suit for specific performance.

On being aggrieved and dissatisfied with the decisions of the lower courts, defendant approached this Court.

Analysis, Law and Decision

Supreme Court noted the non-compliance of the Order XLI Rule 31 CPC passed by the High Court Order.

High Court disposed of the appeal preferred under Order XLI CPC read with Section 96 in a most casual and perfunctory manner. Court neither re-appreciated the entire evidence on record nor had given any specific findings on the issues which were even raised before the Trial Court.

In Court’s opinion, High Court failed to exercise the jurisdiction vested in it as a First Appellate Court. Hence, High Court’s decision was unsustainable.

As per the case of the original plaintiff, the defendant was required to evict the tenants and hand over the physical and vacant possession at the time of execution of the sale deed on payment of full sale consideration.

Procedure adopted by the High Court relying upon the affidavit in a First Appeal by which virtually without submitting any application for amendment of plaint under Order VI Rule 17 CPC, High Court as a First Appellate Court had taken on record the affidavit and as such relied upon the same, but the said procedure is untenable and unknown to law.

It was also observed that, there were no pleadings in the plaint that he was ready and willing to purchase the property and get the sale deed executed of the property with tenants and the specific pleadings were to hand over the peaceful and vacant possession after getting the tenants evicted and to execute the sale deed.

Bench also opined that the plaintiff was never ready and willing to purchase the property and/or get the sale deed executed of the property with tenants.

It was for the first time before the High Court in the affidavit filed before the High Court and subsequently when the learned Trial Court held the issue of willingness against the plaintiff, the plaintiff came out with a case that he is ready and willing to purchase the property with tenants. 

Further, the Court held that once it is found on appreciation of evidence that there was no willingness on the part of the plaintiff, the plaintiff was not entitled to the decree of specific performance.

Therefore, Trial Court’s decision was upheld.

Submission on behalf of the plaintiff that, in the agreement, a duty was cast upon the defendant to evict the tenants and to handover the vacant and peaceful possession, which the defendant failed and, therefore, in such a situation, not to pass a decree for specific performance in favour of the plaintiff would be giving a premium to the defendant despite he having failed to perform his part of the contract.

Defendant not refunding the amount of part sale consideration with 18% interest as ordered by the Trial Court cannot be a ground to confirm impugned judgment and order passed by the High Court.

The Court directed the appellant to refund the amount of Rs 3,60,001 with 18% interest from the date of agreement till the date of realization. [K. Karuppuraj v. M. Ganesan, 2021 SCC OnLine SC 857, decided on 4-10-2021]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Coram of C. Viswanath (Presiding Member) and Justice Ram Surat Ram Maurya (Member) decided an issue with regard to handing over of possession of flat and cancellation of sale agreement in a builder — buyer dispute.

Arun Kedia (HUF), Arun Kedia and Sabita Kedia (Husband and Wife), members of HUF filed the present complaint.

What led to the filing of the complaint?

OP 1 made advertisements from time to time, inviting applications from prospective buyers for the purchase of the flats.

In 2013, complainants approached the OP and booked a residential flat for purchase and deposited booking charges, in the office of the OP. In June, 2013, a registered sale agreement was executed between the parties. By that time the complainant had deposited an amount of Rs 73,51,426 in the office of the OP. The balance amount was to be paid in instalments.

Complainants paid the amount of instalments as mentioned in the agreement as and when it was demanded by the OP. According to the complainants, thereafter they neither received any demand letter nor possession of the allotted flat was handed to them till March, 2016. They received a demand letter but as in this letter no date of delivery of possession was mentioned as such, they did not deposit the amount demanded in it, rather wrote letters requesting to handover possession over the flat allotted to them.

It was also stated that the complainants were not allowed to go to the site and verify the progress in construction. OP assured the complainants that they would be given possession within a short time.

When the registered notice was served to the OP, they unilaterally cancelled the agreement, mentioning therein that in spite of the demand letter, they had not deposited the instalment as fixed in the agreement.

Complainants requested and sent registered notices to OP to cancel the agreement and hand over the possession, but since the notices were not complied with, the present complaint was filed.

Analysis, Law and Decision

Whether the complainants were defaulter in payment of instalments as fixed in the agreement in spite of the notice given by the OP, they failed to pay it within 7 days and hence the OP exercised its power under the agreement and revoked the agreement?


OP had failed to complete the construction till March 2016 and in order to cover its default, the agreement was cancelled in a high-handed manner, to harass the complainants and divert their mind from asking possession?

Bench noted that the agreement fixed reciprocal liabilities upon both parties.

Further, it was added that if the opposite party has not abided by the terms of the agreement and committed a serious breach then it cannot blame the complainants that they have not deposited the instalments well within time or within seven days issue of the letter of demand.

Commission held that there was nothing on record to prove that the demand letters were actually issued to the complainants. Therefore, the allegation that the complainants committed default in payment on instalment for which the agreement was cancelled was not proved.

Adding to the above reasoning, Clause-14 of the agreement requires service of 30 days prior notice in writing of its intension to terminate the agreement. No such notice was issued by the opposite party to the complainants. Cancellation of agreement, of which the intimation was given through letter, was illegal. 

Coram held that there was nothing on record to show that till March, 2016, the construction was completed and a completion certificate was obtained from the competent authority.

According to Section 8 of the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, if the builder is not able to hand over the possession over the building/flat within the time specified in the agreement then the builder is liable to pay interest to the purchaser of the flat for the period for which the possession has not been handed over.

Due to latches on the party of the OP, the complainants suffered a loss. The agreement for sale had been cancelled illegally and malafide, in a high handed manner and the complainants were forced into litigation.

Commission directed the OP to handover the possession to the Complainants after taking balance sale consideration within 2 months and execute the final deed of transfer. OP shall also pay simple interest @6% the complainants on the amount deposited by them from the due date of possession to the offer of possession after obtaining the Occupancy Certificate.  [Arun Kedia (HUF) v. Runwal Homes (P) Ltd., 2021 SCC OnLine NCDRC 189, decided on 24-06-2021]

Advocates before the Commission:

For the Complainant: Mr. R.M. Kedia, Advocate

Ms. Sabita Kedia, Complainant in person

For the Opp. Party: Ms. Anita Marathe, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

Rajasthan Real Estate Regulatory Authority, Jaipur: Coram of Nihal Chand Goel (Chairman) and Shailendra Agarwal, Salvinder Singh Sohata (Members) decides the matter in light of Section 13 of Real Estate (Regulation and Development) Act, 2016 and the significance of sale agreement.

Factual Matrix

Instant matter was with regard to a project of Jaipur Development Authority registered with RERA.

Complainant had participated in an auction organized by respondent 1 and has been successful, he had been allotted a plot in the above-stated project, being implemented by respondent 1 under an MoU with respondent 2.

Though the 15% amount was deposited with respondent 1 , but without executing an agreement for sale, the respondent had issued a further demand note of 35% amount, which was due to be deposited. Respondent included a warning in its demand note.

Complainant stated that respondent 1 had not executed an agreement for sale as envisaged under Section 13 of the RERA and was asking for further amounts to be deposited.

Complainant prayed that respondent 1 should be directed to execute an agreement for sale in terms of Section 13 of the Act and be restrained from asking for a deposit of the remaining amount until such an agreement is executed and registered.


Bench stated that all the provisions of RERA including Section 13 which apply to any advertisement, promotion, booking offer of sale, or sale of any plots in a registered project would apply to the project mentioned in the present matter.

The auction had been conducted by announcing that the project in question was a project registered with RERA and thereby informing and promising to the potential buyers that the provisions of the Act and the rules and regulations made thereunder would apply to this project and determine their relationship with Respondent 1 in respect of any plot purchased at the auction.

In view of the above, Authority directed as under:

  • Respondent 1 shall execute an agreement for sale with complainant and get it registered before demanding or accepting any further amount beyond 15% amount which was already deposited.
  • Complainant shall pay the balance amount by 30-09-2020 or within 3 days from the date of sale agreement as per the payment schedule given in the agreement for sale to be executed, whichever is earlier.
  • Respondent 1 to align its land disposal rule and terms and conditions of auction with provisions of the Act.

[Vinod Kumar Agarwal v. Jaipur Development Authority, Complaint No. RAJ-RERA-C-2020-3622, decided on 22-09-2020]

Advocates before the Authority:

For the Complainant: Advocate Pranjul Chopra

For Respondent 1: CA Mitesh Rathore 

 Additional Information

Section 13 (1) of the Act provides for an agreement to be executed and registered before the promoter accepts an amount exceeding 10 per cent of the total cost of the plot. This is a mandatory requirement of the Act and cannot be dispensed or compromised with.

Case BriefsTribunals/Commissions/Regulatory Bodies

National Disputes Redressal Commission (NCDRC): C. Viswanath (Presiding Member) addressed an issue wherein an allottee after the purchase of the Shed could not get electricity connected due to pending dues of the previous allottee.

The instant revision was filed against the Order passed by the State Consumer Disputes Redressal Commission, Gujarat.

Complainant had applied for allotment of shed pursuant to the advertisement of OP 1. The Complainant paid an amount of Rs 1,76,000 towards the allotment of the shed as initial payment and was informed that he would get electricity connection from the Gujarat Electricity Board in due course.

Further, OP-3 informed the complainant that the previous allottee of the shed was due Rs 1,26,479 to the Gujarat Electricity Board towards electricity charges. The Complainant intimated OP-2 that dues were also pending towards municipal tax of Surat Municipal Corporation. OP 1 requested the Complainant to clear both the outstanding dues and issue clear title of the Shed.

On no action being taken by the OP 1 and 2, Complainant filed a complaint before the District Forum.

Following was the District Forum’s Order:

OP No.1 and OP No.2 herein jointly and /or severally should pay to the complainant in the present case, with reference to the industrial shed in question the amount of Rs.1,76,000/-(Rupees one lakh seventy-six thousand only) paid to the opponent along with simple interest at the rate of 9% per annum on the said amount from the date of complaint till its realization.

State Commission set aside the District Forum’s Order stating that it did not discuss the agreement for sale.

Analysis and Decision

Commission on going through the allotment letter and the agreement found that there was no express provision which mentioned that the purchaser of the premises had to pay the electricity dues of the previous allottee.

Therefore in the absence of there being any specific statutory provision or clause in the Sale Agreement, the allottee could not have been compelled to clear the dues of the previous allottee.

Hence, dues relating to electricity charges cannot be enforced against the next allottee.

Commission cited the Supreme Court decision in Haryana State Electricity Board v. Hamuman Rice Mills Dhanauri, Civil Appeal No. 6817 of 2010, decided on 20-08-2010, held that “electricity arrears do not constitute a charge over the property. Therefore in general law, a transferee of a premises cannot be made liable for the dues of the previous owner/ occupier. Where the statutory rules or terms and conditions of supply which are statutory in character, authorize the supplier of electricity, to demand from the purchaser of a property claiming re-connection or fresh connection of electricity, the arrears due by the previous owner/occupier in regard to supply of electricity to such premises, the supplier can recover the arrears from a purchaser.”

In view of the above discussion, State Commission’s Order was set aside and District Forum’s decision was upheld. [Madhuben Rameshchandra Shah v. Gujarat Industrial Development Corpn., 2021 SCC OnLine NCDRC 17, decided on 28-01-2021]

Advocates for the parties:

Petitioner: Varshal Pancholi, Advocate

Respondents: R1 and R1: Chirag M. Shroff, Advocate

Respondent 3: Jesal Wahi, Advocate

Respondent 4: Ex-parte

Case BriefsSupreme Court

Supreme Court: The 3-judge bench of Sanjay Kishan Kaul, Dinesh Maheshwari and Hrishikesh Roy, JJ., has set aside the order of High Court of Judicature for Andhra Pradesh at Hyderabad and, thereby restored the findings of Trial Court.


 In the instant case, a claim for partition and division was made by the appellant in four equal shares amongst herself and her three siblings, who were arrayed as defendants 1, 2 and 3. The property was left by deceased step-mother of the appellant. Defendant 4, brother of step-mother of the appellant, alleged that his sister had sold Item 1 of Schedule A of the plaint to Defendant 15 under an agreement for sale dated 05-11-1976; and that she had also executed a Will dated 15-06-1978 in favour of her mother and an attendant, defendants 14 and 13 respectively. The appellant denied and disputed the alleged agreement for sale as also the alleged Will.

Findings of the Courts below

 The Trial Court held that both the documents, of the alleged agreement for sale and of the alleged Will, were false and fabricated. The Court observed that the deceased, who was only 45 years of age at the time of her death, would never choose to bequeath the major part of property to her mother, who was about 80 years of age. It was observed that suggestions about the deceased being in her high level of indebtedness were not correct as the defendant could not point out the names of creditors and could not say as to how much was discharged. On contrary, the High Court had affirmed the findings of the Trial Court in relation to Will in question and has held that the Will was not valid. However, it had reversed the findings of the Trial Court in relation to alleged agreement for sale and held that the same was binding on the appellant. It was also ordered that the property forming the subject matter of the said agreement would not be available for partition.

 Observations and Considerations

 In the backdrop of the aforementioned facts, the Court formed three points for determination in the instant appeal:

Whether suit for partition filed was not maintainable for want of relief of declaration against the agreement for sale deed?

The Court clarified that the expression “declaration”, for the purpose of a suit for partition, refers to the declaration of the plaintiff’s share in the suit properties. It was observed that the appellant had not shown awareness about any agreement for sale initially, and later on, the appellant did raise a claim for sale deed being frivolous.

It was also observed that, as per Section 54 of the Transfer of Property Act, 1882, an agreement for sale of immoveable property does not, of itself, create any interest in or charge on such property. A person having an agreement for sale in his favour did not get any right in the property, except the right of obtaining sale deed on that basis and the alleged agreement for sale did not invest the vendee with any such right that the appellant could not have maintained her claim for partition in respect of the properties left by her deceased mother without seeking declaration against the agreement.

What is the effect and consequence of not bringing the legal representatives of defendant who expired during the pendency of appeal in the High Court on record?

Order XXII, Rule 1 of CPC lays down that the death of an appellant or respondent shall not cause the appeal to abate if the right to sue survives. The Court clarified that the same procedure would apply in appeal where one of the several appellants or respondents dies and right to sue survives to the surviving parties alone. Reliance was placed on State of Punjab v. Nathu Ram,(1962) 2 SCR 636, wherein it was held that,  “if the court can deal with the matter in controversy so far as regards the rights and interests of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it. It is only when it is not possible for the court to deal with such matters, that it will have to refuse to proceed further with the appeal and therefore dismiss it.” The Court held that, the instant case could definitely proceed even in the absence of the legal representatives of defendant 2 because in case of success of this appeal, there would be no likelihood of any inconsistent decree vis-à-vis defendant 2 coming into existence. The decree of the Trial Court had been in favour of the plaintiff and defendants 1 to 3 and the result of success of this appeal would only be of restoration of the decree of the Trial Court, which would be of no adverse effect on the estate of the deceased defendant 2.

Whether the High Court was justified in reversing the findings of the Trial Court in relation to the said agreement for sale?

The Court noticed that the two documents were intrinsically intertwined, particularly

because it was suggested by the contesting defendants that in the Will, apart from making bequest, the deceased also directed her mother (legatee) to execute a registered sale deed in favour of defendant 15 after receiving the balance sale consideration from him as per the agreement executed in his favour; and that the deceased also directed her mother to discharge the debts. This unmistakable inter-mixing of the two documents had been the primary reason that the Trial Court examined the matters related with them together, while indicating that to give a colour of reality to the Will and to show that the deceased was highly indebted to others which compelled her to sell the property, the suggestions were made about sale to the husband of the deceased’s sister. The High Court had missed out this fundamental feature of the case that two documents, Will and agreement for sale, as put forward by the contesting defendants could not be analysed independent of each other.

When the Will was found surrounded by suspicious circumstances, the agreement must also be rejected as a necessary corollary.

While examining preponderance of probabilities about the existence of such an agreement for sale, the overall relationship of the parties, the beneficiaries of the alleged agreement and their conduct could not be kept at bay. The Court stated, “If the story of indebtedness of the deceased goes in doubt, the suspicions surround not only the Will but agreement too.” Trial Court was right in questioning that if at all any such agreement was executed on 05-11-1976, there was no reason that the vendee did not get the sale document registered for a long length of time because the deceased expired 1½ years later.


It was held that the Trial Court had examined the matter in its correct perspective and had rightly come to the conclusion that the agreement for sale was as invalid and untrustworthy as was the Will. The findings of Trial Court, based on proper analysis and sound reasoning, called for no interference. On the other hand, the High Court had been clearly in error in interfering with the findings of the Trial Court in relation to the agreement in. Therefore, the Court restored the decree of the Trial Court with further directions that the appellant should be entitled to the costs of the litigation in the High Court and in this Court from the contesting respondents. [Venigalla Koteswaramma v. Malampati Suryamba, 2021 SCC OnLine SC 26, decided on 19-01-2021]

Case BriefsHigh Courts

A very efficacious, substantive and procedural mechanism to facilitate the realisation of deserving and intrinsic value of encumbered estates and other immovable properties – within the annals of the Transfer of Property Act, 1882 — strangely appears very rarely to have been invoked in Courts, which impression is inevitable because the case law on it is scarce, if not, none.

— Kerala High Court

Kerala High Court: Devan Ramachandran, J., addressed matter surrounding Section 57 of the Transfer of Property Act, which has attracted very little or no reported Judgments in India.

Section 57 of the Transfer of Property Act, 1882 enables any party to the sale of immovable property burdened by an encumbrance, to apply to Court for a declaration that the said property is freed from such encumbrance on deposit of sums to be adjudged by it; and for the issuance of a conveyance order or vesting order, proper for giving effect to the sale.

Bench examined the above-stated Section of the TP Act vigilantly from both academic and practical ambit.

Purpose of Section 57 of the TP Act

Intended to assist any party to the sale of immovable property, which is subject to an encumbrance, to fructify the sale for its fair value after receiving in deposit — for payment to the incumbrancer — the capitalised value of the periodical charge, or capital sum charged on the property, together with incidental charges.

Thus, the said Section enables the parties to a sale to invoke the jurisdiction of the Court for the purpose of fulfilling their contracts, notwithstanding the encumbrances on the property.

Section 57 of TP affirmatively provides that on the application of a party to a sale, the Court may, if it thinks fit, direct or allow payment into Court.

This section is intended to facilitate sale out of court, as much as it is for sale by a court or in execution of a decree.

When can Section 57 of TP Act not be applied? | Golden Rule 

In the Madras High Court decision of  Mallikarjuna Sastri v. Narasimha Rao, (1901) ILR 24 Mad 412, held that the said Section,

cannot be applied when it comes to a charge or encumbrance already adjudicated by a court and which has become part of a decree or even in a case of adjustment of a decree out of court.

Facts of the Case

Appellant and Respondents are siblings and their father’s property was partitioned in the year 1980, through a partition deed.

Partition Deed consisted of a covenant that both he and his brother must pay Rs 500 each to their sister within a year, failing which she can recover it, for which the said amounts would stand charged on the respective properties.


The Sister, who is also the first respondent in the present matter refused to accept the stated amount when offered by the appellant, due to which he is still obligated and burdened with the same.

Appellant due the stated obligation has been unable to execute the sale deed and in view of the circumstances, he approached the District Court under Section 57 of the TP Act volunteering to deposit the amount of Rs 500 in favour of the first respondent in order to obtain the declaration that the property is free from any encumbrance.

Though, the above-stated application to the District Court was dismissed on grounds of maintainability.

By the present appeal, the appellant has assailed the District Court’s Order.

Developments in the present appeal

Bench in an earlier order had directed the first respondent to file an affidavit stating that she is unwilling to take the money from the appellant with reasons.

The first respondent filed the affidavit stating that she is unwilling to take the said amount but the reasons placed by her were that due to personal issues with appellant along with the said amount not being offered within the stipulated time as stated in the Partition Deed she refused the said amount.

Counsels for Appellant and First Respondent are P. Thomas Geeverghese and Shiju Varghese, respectively.


On perusal of the facts and circumstances of the matter, Court stated that when the amount of Rs 500 alone stands charged on the property as a capital sum, without any further obligation on the appellant towards interests or other incidental expenses, it is irrefragible that if the appellant pays it to the first respondent or deposits it in the Court, the said encumbrance would stand extinguished.

In the affidavit filed by the first respondent, she only asserted that her refusal for the payment is for personal reasons.

Looking at the above stated, Court determined whether the appellant was justified in invoking Section 57 of the TP Act or not?

Bench stated that in light of the circumstances of the present case, there can be little divergence that the provisions of Section 57 of the TP Act would come to play.

Court noted that the first respondent only says that ‘her conscience is not willing to accept the money’ without showing any cause against its tender or deposit by the appellant.

Hence, in view of the above circumstances, Court finds the decision of District Court erring, since the appellant has clearly averred that he intends to sell his property as per the sale agreement submitted by him.

Since the first respondent failed to show any legally acceptable cause, the appellant is entitled to a declaration under Section 57 of the TP Act.

Therefore, the District Court’s decision is set aside and the appeal is allowed while permitting the appellant to tender the amount of Rs 500 to the first respondent by depositing it in the District Court.

In view of the above, the property will stand free from any charge, created by the Partition Deed. [M.P. Varghese v. Annamma Yacob, 2020 SCC OnLine Ker 3321, decided on 05-08-2020]