Ownership can not be claimed merely based on agreements to sell and payment of sale consideration

Punjab and Haryana High Court Overturns Lower Appellate Court's Decision in Property Ownership Case. Plaintiff's Suit for Ownership and Rectification of Sale Deed Dismissed; Court Upholds Trial Court's Decision

In a significant judgment, the Punjab and Haryana High Court has overturned a decision by the lower appellate court, thereby dismissing the suit filed by Jeon Singh, who claimed ownership of a property based on agreements to sell and payment of sale consideration. The judgment, delivered by Justice Mandeep Pannu on August 19, 2025, reinstates the original decision of the trial court, which had rejected Jeon Singh's claims.

The case revolves around a dispute concerning a piece of land originally owned by Sadhu Ram, who had agreed to sell it to Jeon Singh. The sale deed executed on June 9, 1978, was in favor of Jeon Singh's sons, including Gurpal Singh, now deceased. Jeon Singh argued that he had paid the entire sale consideration and sought rectification of the sale deed to reflect his ownership, claiming his sons held the land in a fiduciary capacity.

The trial court dismissed the suit, noting that Jeon Singh failed to prove any mistake or fraud in the inclusion of his sons' names in the sale deed. Furthermore, the trial court emphasized that the Benami Transactions (Prohibition) Act, 1988, barred any claim to property held benami, effectively nullifying Jeon Singh's assertions of ownership.

The lower appellate court, however, reversed this decision, declaring Jeon Singh the rightful owner of the property, citing that the Benami Act's prospective application did not affect transactions predating 1988. This led to the appeal by Amarjeet Kaur and another, defendants No. 5 and 6, the widow and daughter of Gurpal Singh, who argued that the suit was filed beyond the limitation period and aimed to undermine their lawful inheritance.

Justice Pannu, in his judgment, highlighted critical errors in the appellate court's reasoning, reaffirming that agreements to sell do not confer title and rectification of the sale deed was untenable without evidence of mutual mistake or fraud. The judgment underscored the appellate court's contradictory stance in acknowledging the impossibility of rectification while declaring Jeon Singh as the owner.

Moreover, the High Court recognized the suit's untimeliness, filed over a decade after the sale deed's execution, with no justification for the delay. Justice Pannu concluded that the appellate court's decision was without jurisdiction, as the title must remain with the recorded vendees.

This judgment reaffirms the trial court's findings, preserving the legal rights of Gurpal Singh's heirs and emphasizing the importance of statutory limitations and clear title in property disputes.

Bottom Line:

Rectification of sale deed - Agreement to sell does not confer title - Suit for declaration of ownership based on agreement to sell and payment of sale consideration cannot succeed when sale deed stands in the name of recorded vendees, and rectification is declined.

Statutory provision(s): Specific Relief Act, 1963 Section 26, Limitation Act, 1963, Benami Transactions (Prohibition) Act, 1988

Amarjeet Kaur v. Jeon Singh (Since Deceased) through LRs, (Punjab And Haryana) : Law Finder Doc Id # 2765822