2022 (9) TMI 1643 - SC - Indian Laws

Reversal of judgment and decree of dismissal of suit passed by the learned trial Court, the original Defendant - refusal to grant permanent injunction - unregistered agreement to sell - HELD THAT - Having conscious of the fact that the Plaintiff might not succeed in getting the relief of specific performance of such agreement to sell as the same was unregistered, the Plaintiff filed a suit simplicitor for permanent injunction only. It may be true that in a given case, an unregistered document can be used and/or considered for collateral purpose. However, at the same time, the Plaintiff cannot get the relief indirectly which otherwise he/she cannot get in a suit for substantive relief, namely, in the present case the relief for specific performance. Therefore, the Plaintiff cannot get the relief even for permanent injunction on the basis of such an unregistered document/agreement to sell, more particularly when the Defendant specifically filed the counter-claim for getting back the possession which was allowed by the learned trial Court. The Plaintiff cleverly prayed for a relief of permanent injunction only and did not seek for the substantive relief of specific performance of the agreement to sell as the agreement to sell was an unregistered document and therefore on such unregistered document/agreement to sell, no decree for specific performance could have been passed. The Plaintiff cannot get the relief by clever drafting. Both, the learned first appellate Court and the High Court have committed a grave error in passing a decree for permanent injunction in favour of the Plaintiff as against the Defendant and dismissing the counter-claim filed by the original Defendant - The impugned judgment and order passed by the High Court, confirming the judgment and decree passed by the first appellate Court and the judgment and decree passed by the first appellate Court decreeing the suit for permanent injunction and dismissing the counter-claim of the Defendant are unsustainable and the same deserve to be quashed and set aside and the judgment and decree passed by the learned trial Court dismissing the suit filed by the Plaintiff for permanent injunction and allowing the counter-claim of the Defendant deserves to be restored. The impugned judgment and order dated 10.12.2019 passed by the High Court dismissing Second Appeal No. 330/2001, confirming the judgment and decree passed by the first appellate Court and the judgment and decree dated 29.01.2001 passed by the first appellate Court decreeing the suit for permanent injunction in favour of the original Plaintiff and dismissing the counter-claim of the Defendant are hereby quashed and set aside - Appeal allowed.

Summary

Issues:
Validity of decree for permanent injunction based on unregistered agreement to sell.

Analysis:
The judgment revolves around the validity of a decree for permanent injunction based on an unregistered agreement to sell. The original Plaintiff filed a suit for permanent injunction solely relying on an unregistered agreement to sell dated 23.03.1996. The trial Court dismissed the suit, stating that the Plaintiff failed to prove the agreement and was in unauthorized possession. However, the first appellate Court reversed this decision, granting the permanent injunction and rejecting the Defendant's counter-claim.

The Appellant argued that an unregistered agreement is not admissible as evidence, and thus, the decrees were erroneous. The Plaintiff cleverly sought only permanent injunction, knowing specific performance would fail due to the unregistered agreement. The Court acknowledged that unregistered documents can be used for collateral purposes but emphasized that indirect relief cannot be granted when a substantive claim would fail. Consequently, the Court found the decrees unsustainable and restored the trial Court's decision.

The Court held that the Plaintiff could not obtain permanent injunction based on an unregistered agreement and dismissed the Plaintiff's suit while allowing the Defendant's counter-claim. The appellate Court's decrees were quashed, and the trial Court's judgment was reinstated. The judgment highlights the importance of registering agreements for enforceability and the limitations of seeking relief based on unregistered documents.