Himachal Pradesh High Court Quashes HIMUDA's Payment Withholding over Land Title Dispute

Court Rules Shortfall in Land Area Does Not Constitute Defect in Title; Orders Release of Rs.3.76 Crores to Petitioners

In a significant judgment, the Himachal Pradesh High Court has quashed the communication from the Himachal Pradesh Housing and Urban Development Authority (HIMUDA) that withheld a substantial payment from Sachin Shridhar and others due to alleged defects in the title of land sold. The court ruled that the shortfall in land area does not equate to a defect in the title, thereby entitling the petitioners to receive the balance payment of Rs.3,76,77,000 along with interest.

The case revolved around a sale deed executed between the petitioners and HIMUDA for 570 bighas of land. HIMUDA withheld the balance payment, citing a shortfall of 60 to 70 bighas, claiming it was a breach of Clauses 4 and 5 of the sale deed regarding defects in the title. However, the petitioners argued that possession of the entire land was duly handed over to the respondent, thus negating any defect in title.

Justice Ajay Mohan Goel, who presided over the case, emphasized that defect in title refers to the legal ownership and not discrepancies in the physical measurement of land. The court observed that the sale deed confirmed the peaceful and vacant possession of the land to HIMUDA, which acknowledged the transfer without dispute at the time of execution.

The court's decision highlighted the distinction between a defect in title and shortfall in land area, clarifying that the latter does not constitute a breach of the sale deed's clauses regarding title defects. Consequently, the court ordered the immediate release of the withheld payment to the petitioners, restoring financial fairness and contractual integrity.

This ruling sets a precedent in contract law, particularly concerning land transactions, reinforcing that discrepancies in land measurement should not be misconstrued as legal defects in title. The judgment underscores the importance of adhering to contractual obligations and ensuring equitable transactions.

The petitioners were represented by Senior Advocate Mr. Suneet Goel, while HIMUDA's case was argued by Mr. Roop Lal Sharma. The judgment is likely to impact future land sale disputes, providing clarity on the legal interpretation of title defects versus physical discrepancies in land transactions.

Bottom Line:

Sale deed executed between petitioners and respondent - Alleged shortfall in area sold does not amount to defect in title of land under Clauses 4 and 5 of the sale deed - Petitioners entitled to balance payment withheld by respondent.

Statutory provision(s): Contract Law, Clauses 4 and 5 of the Sale Deed.

Sachin Shridhar v. Himachal Pradesh Housing and Urban Development Authority, (Himachal Pradesh) : Law Finder Doc Id # 2804950