Court clarifies that suits under Section 31 of the Specific Relief Act can be filed by persons deriving title from the executant; rules appellant failed to prove bona fide purchaser status.
In a landmark judgment dated March 27, 2026, the Delhi High Court dismissed the appeal filed by Rajeev Miglani challenging the trial court's decree which declared null and void an Agreement to Sell dated August 18, 2006, executed by the late Shri Som Nath in favor of Miglani. The suit had been filed by Urmil Gujral under Section 31 of the Specific Relief Act, 1963, to cancel the 2006 Agreement on grounds that it was executed without authority, as Gujral had earlier acquired rights over the same property through documents dated April 7, 1988.
The property in dispute, situated at 10/64, Tihar-I, Subhash Nagar, New Delhi, was originally leased to Shri Kanshi Ram, father of respondent no. 2 (late Som Nath). Upon Kanshi Ram's death in 1977, his legal heirs, including Som Nath and his mother Smt. Bassi Devi, were recorded as lessees by the Land and Development Office (L&DO). In 1988, Bassi Devi and Som Nath executed a set of documents in favor of Urmil Gujral, including an Agreement to Sell, registered Wills, a General Power of Attorney (GPA), and an affidavit, transferring their interest in the property to Gujral. Gujral paid Rs. 48,000/- as consideration, acknowledged by a receipt.
Despite this, after Bassi Devi's death in 1995, Som Nath in 2006 executed another Agreement to Sell, GPA, SPA, and Will in favor of Rajeev Miglani for Rs. 4.9 lakhs, claiming ownership. Urmil Gujral filed a suit to cancel the 2006 Agreement on the grounds that she had valid prior title and possession based on the 1988 documents.
The trial court decreed in favor of Gujral, and the High Court upheld the decision after detailed analysis, covering various legal aspects:
1. Maintainability of Suit under Section 31 of Specific Relief Act: The Court clarified that Section 31 is not restricted to executants of an instrument alone but includes any person deriving title from the executant whose rights may be adversely affected by the instrument. The Court relied on Supreme Court precedents, including Md. Noorul Hoda v. Bibi Raifunnisa and Deccan Paper Mills v. Regency Mahavir Properties, to emphasize that cancellation proceedings under Section 31 are inter partes (in personam) and protective in nature. Gujral, deriving title through Som Nath (the executant), was entitled to file the suit.
2. Validity and Execution of Documents: The Court found that the 1988 documents executed in favor of Gujral, including two registered Wills and GPA, were duly proved through attesting witnesses and sub-registrar office records. The appellant failed to prove forgery or invalidity of these documents.
3. Superior Right Over the Property: Although neither party had a registered Sale Deed, the Court held that the registered Wills and prior Agreement to Sell of 1988 conferred a better right and interest in the property to Gujral than the subsequent 2006 Agreement. The principle of qui prior est tempore potior est jure (he who is earlier in time is stronger in right) under Section 48 of the Transfer of Property Act was applied.
4. Possession: Evidence including water bills, house tax receipts in Gujral's name, and testimony of neighbors established that Gujral had uninterrupted possession since 1988, including constructive possession through her son. The appellant admitted tenants were in possession at the time of his purchase and failed to prove actual possession or rent receipts.
5. Bona Fide Purchaser Status: The appellant claimed protection as a bona fide purchaser for value without notice. However, the Court held that he failed to exercise due diligence by not verifying official records or making inquiries into the tenancy and prior title. Reliance on oral assurances from Som Nath was insufficient. The appellant was held to have constructive notice of Gujral's rights and was not protected under Section 53-A of the Transfer of Property Act or Section 19(1) of the Specific Relief Act.
6. Legal Effect of Agreements to Sell, GPA, and Wills: The Court reiterated settled law that an Agreement to Sell or GPA does not itself transfer ownership unless accompanied by registered sale deed. However, registered Wills come into effect upon the death of the testator. Since both Som Nath and Bassi Devi had executed Wills in favor of Gujral, and both had died, these Wills became operative, vesting ownership rights in Gujral.
7. Non-appearance and Ex-parte Proceedings: The appellant's co-respondent, Som Nath, was proceeded against ex-parte at trial and did not appear before the High Court. The Court proceeded with the appeal in his absence.
The High Court thus dismissed the appeal, upheld cancellation of the 2006 Agreement, and directed the Registry to inform the Sub-Registrar to note cancellation of the registered 2006 Agreement. The judgment affirms that persons deriving title from an executant of an instrument have locus standi to seek cancellation of subsequent conflicting instruments executed by the same executant.
This decision underscores the protective nature of Section 31 of the Specific Relief Act and reinforces the importance of due diligence and notice in property transactions. It also clarifies the hierarchy of rights where competing Agreements to Sell and Wills exist without registered sale deeds.
Summary for Legal Practitioners and Property Buyers:
- - A suit under Section 31 of the Specific Relief Act can be filed not only by executants but also by persons deriving title from executants if their rights are prejudiced by a subsequent instrument.
- - Registered Wills executed by the original owners in favor of a party become operative upon death, conferring ownership rights.
- - Agreements to Sell and GPAs do not confer title unless registered and executed as sale deeds.
- - Due diligence and inquiry into possession and title are mandatory for purchasers to claim bona fide purchaser status without notice.
- - Constructive possession and payment of property taxes in one's name support claims of ownership and possession.
- - Priority in conflicting transfers is determined by the principle of prior in time, stronger in right.
Bottom Line:
Suit under Section 31 of the Specific Relief Act, 1963, can be filed not only by the executant of an instrument but also by any person who derives their title from the executant and whose rights may be adversely affected by the instrument if left outstanding.
Statutory provision(s):
Specific Relief Act, 1963 Section 31, 34; Transfer of Property Act, 1882 Sections 3, 48, 53-A, 54; Indian Evidence Act, 1872 Sections 68, 91, 92; Civil Procedure Code, 1908; Indian Contract Act, 1872 Section 202; Indian Succession Act, 1925.
Rajeev Miglani v. Urmil Gujral, (Delhi) : Law Finder Doc Id # 2873476
