An unregistered Agreement to Sell, not even along with the proper stamp duty, cannot be accepted as a complete sale.

The Hon’ble Supreme Court of India rejected the contention of the Appellant/ Original Plaintiff that the agreement to sell was a complete sale and it was to be considered as a sale deed because the substantial amount was paid at the time of the execution of the said agreement to sell to the respondent no. 1/ defendant No. 1.

The same was held in the matter of Rakesh Malhotra Vs. Kamaljit Singh Sindhu and Others Civil Appeal No. 110070 of 2018 on 16.11.2018.

Challenge

The Appellant/ Original Plaintiff, feeling aggrieved and dissatisfied with the impugned judgment dated 29.02.2016 (RSA 4015/2011) of Hon’ble High Court of Punjab and Haryana, preferred the above-mentioned appeal.

The limited issue before this Hon’ble Court was whether the High Court of Punjab and Haryana, vide the second appeal, was justified in allowing the contentions of the original defendant Nos. 2 and 3 by setting aside the judgment dated 10.08.2011 passed by the Ld. ADJ.

Brief facts of the said matter were that the Original Plaintiff instituted a suit for possession and seeking declaration that he is the owner of the subject property as he entered into an Agreement to Sell dated 20.04.1987 with the Defendant No.1.

It was further alleged by the Original Plaintiff that the sale deed executed between the Defendant No.1 and Defendant No. 2 & 3 dated 28.01.2002 with respect to the subject property is null, illegal and void in the light of subsisting Agreement to Sell between the Original Plaintiff and the Defendant No.1.

Held

The High Court after analysing the contentions of the parties, upheld the decision of the High Court and held that the High Court was justified in not granting the reliefs prayed in the suit by the original plaintiff, namely, the declaration that he is the owner of the subject property on the basis of an unregistered agreement to sell dated 20.04.1987, which lacked proper stamp duty also.

The Apex Court observed that the alleged agreement to sell, upon which the original plaintiff is placing reliance upon is neither registered nor properly stamped, hence the same cannot be admitted in evidence and can be used only for the collateral purpose. It was concluded on the lines of the same, that the said agreement was only to be considered as agreement to sell and not as a sale deed.

The subsequent observation by the Apex court was that, the above-mentioned suit was instituted after ten years from the date of the title deed/ sale deed executed and registered in favour of Defendant No. 2 and 3, making it further barred by limitation.