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Purushottam Bagh Sahkari Awas Samiti Ltd. vs Sri Shobhan Pal Singh and Anr. Etc.

Civil Appeal · 2023 INSC 789Decided 4 Sept 2023
Civil Appeal Nos. 5380-5382 of 2015
Abhay S. Oka · Pankaj Mithal

Background

A cooperative housing society in Agra had allotted a residential plot to one Krishna Pal Singh in 1983 and executed a sale deed in his favour. Under the society's bye-laws, a plot could only be allotted to a member who did not already own a house or plot in the society's area. About 26 years later, in 2010, the society referred the matter to an arbitrator alleging that Krishna Pal Singh had falsely declared he owned no other property and had bought the plot only to resell it at a profit. The arbitrator declared the 1983 sale deed void, and an appeal against that award also failed. Krishna Pal Singh's successors (his sons) then challenged both the award and the appellate order in the High Court, which ruled in their favour, prompting the society's appeal to the Supreme Court.

Decision Breakdown

The Supreme Court upheld the High Court's judgment and dismissed the society's appeals. It held that the society, having alleged a violation of its bye-laws, bore the burden of proving that Krishna Pal Singh or his family owned another house or plot in the area, and it produced no evidence to substantiate this. The only fact the arbitrator had actually found was that Krishna Pal Singh gave a particular residential address at the time of allotment, which by itself does not prove ownership of that property. Since there was no proof of a bye-law violation, the Court found no merit in cancelling the sale deed decades after it was executed.

Lesson Learnt

A cooperative society (or any party) seeking to cancel an allotment or sale deed on the ground of a false declaration must actually prove the falsity with evidence: merely alleging that someone lived at an address is not proof that they owned property there, and unsubstantiated suspicion cannot undo a decades-old transaction.

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

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