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Dharmabiri Rana v. Pramod Kumar Sharma (D) Thr. LRs. & Anr.

Civil Appeal · 2017 INSC 1005Decided 5 Oct 2017
Civil Appeal No. 9906 of 2010
Justice A.K. Sikri · Justice Ashok Bhushan

Background

The plaintiff (appellant) sued in 1990 for specific performance of a 1987 agreement to sell a 150 sq. yd. plot, claiming the defendant's brother had executed the agreement as his power-of-attorney holder and that earnest money had been paid. The defendants denied ownership of the property and denied that any valid power of attorney or agreement existed. The trial court decreed specific performance in the plaintiff's favour, but the First Appellate Court reversed this, and the Delhi High Court upheld that reversal in second appeal, prompting this further appeal to the Supreme Court.

Decision Breakdown

The Supreme Court held that specific performance can only be ordered where it is proved that the person who executed the agreement actually had the right to transfer the property. Since neither defendant was shown to be the owner, and the alleged power of attorney authorising defendant No. 2 to sell was an unregistered document never relied upon or considered by the lower courts, the essential foundation for a decree of specific performance was missing. The Court agreed with the First Appellate Court and the High Court that the agreements were unenforceable, and found no substantial question of law warranting interference. The civil appeal was accordingly dismissed.

Lesson Learnt

A court cannot order specific performance of a sale agreement unless it is first established that the person who signed it actually had legal authority (ownership or a valid, provable power of attorney) to transfer the property: proof of the agreement alone is not enough.

Official source (sci.gov.in)View Judgment (PDF)

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