Unregistered Sale Deeds Based On Revoked Power Of Attorney Cannot Confer Title | Supreme Court Restores Suit Over Disputed Land Transfer
Kiran Raj
The Supreme Court of India Division Bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan allowed a civil appeal challenging the rejection of a civil suit at the threshold. The appeal arose from a judgment of the High Court of Judicature for Rajasthan at Jodhpur, which had allowed a revision petition and rejected the plaint filed by a corporate appellant under Order VII Rule 11 of the Code of Civil Procedure, 1908. The Supreme Court held that the High Court committed a jurisdictional error in summarily rejecting the suit without permitting adjudication on triable issues related to title and the validity of impugned sale deeds.
The apex court stated that the revocation of a power of attorney and board resolution prior to the execution of the disputed sale deeds rendered those deeds legally invalid. Furthermore, the Court found that the suit disclosed two separate causes of action and could not be dismissed in its entirety merely on the alleged insufficiency of one claim. Consequently, the Supreme Court set aside the High Court's order and reinstated the trial court’s direction to retain the plaint for adjudication on merits.
The appellant, a private limited company, claimed ownership of agricultural land located in Village Pal, District Jodhpur, comprising Khasra Nos. 175, 175/2, 175/4, 175/5, 175/6, and 175/7, collectively measuring 18 bighas and 15 biswas. This property was reportedly acquired in 2013. In May 2014, the appellant secured a loan of Rs. 7.5 crores from one of the respondents.
On May 23, 2014, the Board of Directors of the appellant passed a resolution authorising their Managing Director and one Mahaveer Lunia (Respondent No. 1) to sell the subject land. Pursuant to this resolution, an unregistered power of attorney and an agreement to sell were executed on May 24, 2014 in favour of Respondent No. 1.
Subsequently, on August 12, 2015, the original sale deeds through which the appellant had acquired the land were impounded for insufficient stamp duty. Though the appellant challenged the impounding action before the Rajasthan Tax Board and obtained a favourable order remanding the matter to the Collector of Stamps, they handed over the original documents to the private respondents as security for the loan.
In April 2022, the appellant sought to redeem the documents and settle the loan, but received no response. On May 24, 2022, the appellant’s Board of Directors passed a resolution revoking the earlier authorisation. The power of attorney was formally revoked on May 27, 2022.
Despite these revocations, Respondent No. 1 executed two sale deeds dated July 13 and July 14, 2022, which were registered on July 19, 2022, in favour of himself and Respondent Nos. 2 to 4. Based on these deeds, the names of the respondents were mutated in the revenue records.
The appellant filed a suit for declaration, possession, and permanent injunction in Original Civil Suit No. 122 of 2022 before the District Court, Jodhpur, seeking invalidation of the sale deeds and other reliefs. In response, Respondent Nos. 1 to 4 filed an application under Order VII Rule 11 CPC for rejection of the plaint.
The trial court dismissed the application, holding that the plaint raised triable issues. However, on revision, the High Court allowed the respondents' plea and rejected the entire plaint, prompting the appellant to file the present appeal before the Supreme Court.
The Supreme Court, after reviewing the pleadings, records, and arguments, set aside the High Court’s decision. It recorded “Execution of sale deeds thereafter is non-est in law and raises serious questions of validity, which must be tried by a civil court.”
It further observed that under Sections 17, 23, and 49 of the Registration Act, 1908, and Section 54 of the Transfer of Property Act, 1882, an unregistered agreement to sell does not create or transfer any right, title, or interest in immovable property.
Citing Suraj Lamp & Industries (P) Ltd. v. State of Haryana, the Court stated: “Transactions of the nature of GPA sales or SA/GPA/WILL transfers do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immoveable property.”
The Court stated that Respondent No. 1 had not instituted any suit for specific performance and noted: “In the absence of a suit for specific performance, the agreement to sell cannot be relied upon to claim ownership or to assert any transferable interest in the property.”
The Bench noted that the revocation of the Board Resolution and Power of Attorney prior to the execution of the impugned sale deeds rendered those transactions invalid.
With respect to the trial court’s jurisdiction, the Supreme Court stated: “Issues relating to title of immovable property fall exclusively within the jurisdiction of civil courts and not revenue authorities.” It rejected the respondents’ reliance on Section 207 of the Rajasthan Tenancy Act, stating that the suit pertained to ownership and title, not khatedari rights.
Addressing the issue of court fees, the Court held: “The law mandates that the plaintiff be afforded an opportunity to rectify such deficiency. Only upon failure to comply, can the plaint be rejected.” The Court relied on Tajender Singh Ghambhir v. Gurpreet Singh, wherein the necessity for granting time to cure deficiencies in court fee was stated.
On the broader issue of rejection under Order VII Rule 11 CPC, the Court reiterated: “Rejection of a plaint is permissible only when the plaint, on its face and without considering the defence, fails to disclose a cause of action, is barred by any law, is undervalued, or is insufficiently stamped.”
Quoting Central Bank of India v. Prabha Jain, the Court held: “Even if one cause of action in a plaint survives, the entire plaint must be tried. The doctrine of severance does not apply to reject an entire plaint based on a partial defect.”
The Supreme Court issued the following directions: “The appeal is allowed. The impugned order of the High Court is set aside, and the order of the Additional District Judge is restored.”
It directed that:“The plaint is directed to be taken on the file of the trial Court, which shall proceed with the suit in accordance with law, uninfluenced by any observations made in this judgment.”
The Court concluded: “The parties shall bear their own costs.”
It also recorded: “Connected Miscellaneous Application(s), if any, shall stand closed.”
Advocates Representing the Parties:
For the Petitioners: Dr. Manish Singhvi, Advocate; Mr. Apurv Singhvi, Advocate; Ms. Shalini Haldar, Advocate; Mr. D. K. Devesh, Advocate-on-Record
For the Respondents: Mr. Sumit Chander, Advocate; Mr. Gurdeep Chauhan, Advocate; Mr. Nitin Mishra, Advocate-on-Record
Case Title: Vinod Infra Developers Ltd. v. Mahaveer Lunia & Ors.
Neutral Citation: 2025 INSC 772
Case Number: Civil Appeal No. 7109 of 2025
Bench: Justice J.B. Pardiwala and Justice R. Mahadevan
[Read/Download order]
