M/S PALVIT DEVELOPERS LLP vs SRI B G RAMAIAH

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU



RD
DATED THIS THE 3 DAY OF NOVEMBER, 2026

BEFORE

THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI

WRIT PETITION NO. 24513 OF 2026 (GM-CPC)

BETWEEN:

M/S PALVIT DEVELOPERS LLP.,
A LIMITED LIABILITY PARTNERSHIP
FIRM OFFICE AT NO. 108,
TH
4 FLOOR, MAXWORTH MANSION,
LALBAGH FORT ROAD,
NEAR MINERVA CIRCLE,
BENGALURU -560 004
REPRESENTED BY ITS DESIGNATED
PARTNER SRI. BHERUMAL JAIN
…PETITIONER
(BY SRI.D.R.RAVISHANKAR, SENIOR COUNSEL FOR
SRI.SAGAR G. NAHAR, ADVOCATE)

AND:

1. SRI B.G.RAMAIAH
S/O LATE GANGAIAH
AGED ABOUT 79 YEARS,
R/A BEECHANAHALLI VILLAGE,
TIPPASANDRA HOBLI, MAGADI TALUK,
RAMANAGARA DISTRICT

2. SMT. REVAMMA
W/O K.B.VISHWESHWARAIAH
AGED ABOUT 79 YEARS,
ALURU
ND
R/A 2 CROSS, MIDDLE
CLASS COLONY,
S. S. PURAM, TUMKUR












Digitally signed
by SUVARNA T
Location: HIGH
COURT OF
KARNATAKA

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3. SRI. K. B. SRIKANTAIAH
S/O LATE K. BASAVAIAH
AGED ABOUT 79 YEARS,
R/A KENKEREPALYA, KUDUR HOBLI,
MAGADI TALUK,
RAMANAGARA DISTRICT
4. SMT. GURUSIDDAMMA
W/O K. B. SRIKANTAIAH
AGED ABOUT 64 YEARS,
R/A KENKEREPALYA,
KUDUR HOBLI, MAGADI TALUK,
RAMANAGARA DISTRICT
5. SRI. K. B. YATHIRAJU
S/O LATE K. BASAVAIAH
AGED ABOUT 72 YEARS,
WORKING IN SIDDAGANGA MUTT,
KYATSANDRA,
TUMKUR
6. SRI. M.R.SHIVAMMA
W/O K.B.YATHIRAJU
AGED ABOUT 64 YEARS,
C/O SRI. SIDDAGANGA MUTT,
KYATSANDRA,
TUMKUR

7. SRI. AMOGHVARSHA. K. V
S/O LATE K.V. VISHWESHWARAIAH
AGED ABOUT 77 YEARS

8. SMT. T.S. KALPALA
W/O AMOGHVARSHA. K. V
AGED ABOUT 72 YEARS

9. SRI. PRAJWAL VARSHA
S/O AMOGHVARSHA. K. V
AGED ABOUT 43 YEARS

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RESPONDENTS T TO 9 ARE
RESIDING AT SHIVA NIVAS,
ND
2 BLOCK, KUVEMPUNAGARA MAIN ROAD,
TUMKUR -572 103

10. SMT. K. V. AMRUTHAMATHI HOSAMANE
W/O SUBRAMANYAN,
AGED ABOUT 64 YEARS,
R/A NO.D2 QUARTERS,
TELEPHONE EXCHANGE, NANDINI LAYOUT,
BENGALURU -560 096

11. SMT. K.V.SUCHETHA HOSAMANE
W/O K. M. JAGADEESH,
AGED ABOUT 61 YEARS,
R/A NO.5/83, 4 (TH) CROSS,
OPP. WARD OFFICE NO. 37
AMAR JYOTHI NAGAR
BENGALURU- 560 040

12. SRI. BASAVARAJU. K. V
S/O LATE K.V. VISHWESHWARAIAH
AGED ABOUT 68 YEARS
13. SMT. BHAGYA. H. R
W/O BASAVARAJU. K.V.,
AGED ABOUT 57 YEARS

14. SRI. VISHWAS. B. KAUTILYA
S/O BASAVARAJU. K. V.,
AGED ABOUT 43 YEARS

RESPONDENTS 12 TO 14 ARE
RESIDING AT NO. 3/1
VISHWAS, 2ND CROSS,
M. C. COLONY, S. S. PURAM,
TUMKUR -572 103

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15. SRI. DILIP. S. RAJ
S/O K.B.YATHIRAJU
AGED ABOUT 56 YEARS

16. SRI. NAVEEN. S. RAJ
S/O K. B. YATHIRAJU
AGED ABOUT 51 YEARS

RESPONDENTS 15 TO 16 ARE
RESIDING AT NO. 585,
SIDDAGANGA MUTT ROAD,
BANDE PALYA,
DEVARAYANDURGA POST
TUMKUR -572 104

17. THE SPECIAL LAND ACQUISITION OFFICER
OFFICE OF THE SPECIAL LAND ACQUISITION
OFFICER-2, NO14/3, 1ST FLOOR,
MAHARSHI ARAVIND BHAVAN,
NRUPATHUNGA RD, AMBEDKAR VEEDHI,
SAMPANGI RAMA NAGAR, BENGALURU,
KARNATAKA -560 001
…RESPONDENTS
(BY SRI.SUNIL S. RAO, ADVOCATE FOR
SRI.T.SHESHAGIRI RAO, ADVOCATE FOR C/R1)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
QUASHING THE ORDER DATED 22.07.2026 PASSED ON IA NO.
53 IN OS NO. 187/2012 BY THE LEARNED SENIOR CIVIL
JUDGE AND JMFC, DODDABALLAPURA, VIDE ANNEXURE-A.

THIS WRIT PETITION HAVING BEEN HEARD AND
RESERVED ON 12.08.2026, COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:

CORAM: HON'BLE SMT. JUSTICE LALITHA KANNEGANTI

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CAV ORDER
Aggrieved by the order dated 22.07.2026, passed in
I.A.No.53 in O.S.No.187/2012, by the Senior Civil Judge and
JMFC, Doddaballapura, the petitioner/defendant No.16 is before
this Court.
2. The respondent No.1 herein, who is the plaintiff, filed
O.S.No.187/2012 seeking specific performance. In the said
suit, the plaintiff filed I.A.No.53 under Section 151 of the CPC
to direct defendant No.16 to deposit the compensation amount
of Rs.7,50,00,000/- from defendant No.17 in respect of the suit
schedule property. That application was allowed by the
impugned order, and defendant No.16 was directed to deposit
the compensation received from defendant No.17 in respect of
the suit schedule property within 20 days.
3. While allowing the application, the trial Court observed
that, on perusal of the entire records, it prima facie appears
that, when an order of temporary injunction was operating
against defendant Nos.1 to 15 from alienating the suit schedule
property until further orders, they alienated the suit schedule

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property in favor of defendant No.16 under a Registered Sale
Deed dated 26.03.2022, thereby violating the Court order.
Thereafter, defendant No.17 disbursed compensation in favor
of defendant No.16, which he has not denied in his written
objections. He has only contended that, since a writ petition is
pending, the plaintiff cannot seek the same relief in this Court,
that the plaintiff has not led his evidence, and that the
defendants have denied their agreement. Since the matter is
pending before this Court for specific performance of the
contract, and during the pendency of the suit the defendants
alienated the suit schedule property in favor of defendant
No.16, and later defendant No.17 acquired the suit schedule
property and awarded compensation, the plaintiff has a right to
seek appropriate relief in this Court. Merely because the writ
petition is pending, the plaintiff is not precluded from seeking
the reliefs. Under such circumstances, I.A.No.53 deserved to be
allowed in the interest of justice and equity. Accordingly, the
trial Court allowed the application. Aggrieved thereby, the
petitioner/defendant No.16 is before this Court.

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4. Learned Senior counsel representing the learned
counsel for the petitioner argued at length and the written
arguments are also placed before this Court. In the written
submissions, it is stated that the suit filed by respondent No. 1
is founded upon an unregistered Agreement of Sale dated
05.10.2007, the execution and enforceability of which remain
the subject of controversy and are presently sub-judice . No
decree has been passed; no right of respondent No. 1,
contractual or otherwise, has been adjudicated; and no
compensation stands determined in his favor under Section 21
of the Specific Relief Act, 1963. The petitioner derives title
under a registered Sale Deed dated 26.03.2022, executed for
valuable consideration, pursuant to which possession was also
delivered. That conveyance has neither been abrogated nor
declared void by any competent Court and continues to remain
valid and operative. The suit schedule property was
subsequently acquired under statutory proceedings, and the
compensation payable was determined and distributed in
accordance with law. The trial Court, by the impugned order,
directed payment of the entire compensation, notwithstanding

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that respondent No.1's underlying claim remains wholly
unadjudicated. It is submitted that the plaintiff had already
filed WP.No.8875/2025 concerning the very compensation, and
no relief was granted. In spite of the same, I.A.No.53 is filed by
the plaintiff. The trial Court ought to have declined to exercise
its inherent jurisdiction in aid of such successive and
impermissible pursuit. To permit such conduct would erode
judicial discipline and comity and enable a litigant to migrate
from one forum to another. It is submitted that an unregistered
Agreement of Sale is no conveyance; it does not, of itself, pass
title. Respondent No. 1 possesses neither a registered
instrument of transfer nor a decree for specific performance,
and the execution, validity, and enforceability of the 2007
agreement remain squarely at large before the trial Court. Until
the contest is resolved, his right is at best inchoate; he cannot,
in one breath, describe his contractual right as yet to be
adjudicated and, in the next, assert a present entitlement to
the compensation that now stands in the property' s stead nor
does the acquisition improve his position. It does not transfer
or affix the compensation to a disputed agreement, nor does it

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conjure any charge or lien in respondent No. 1' s favor; the
compensation could take on the character he ascribes to it only
once the contractual right stands established and not before.
5. It is further submitted that the impugned relief finds
no basis in the pleadings or in Section 21 of the Specific Relief
Act. It is submitted that Section 21 of the Specific Relief Act
governs compensation in a suit for specific performance. Sub-
section (5) mandates that such a claim be made in the plaint,
subject only to amendment under its proviso. Respondent No.1
has pleaded no claim for compensation or damages, nor has he
sought amendment under Order VI Rule 17 of the CPC or the
proviso to Section 21(5) of the Specific Relief Act. This is not a
mere technicality but the absence of any pleaded foundation for
the relief granted. The Court must adjudicate according to what
is alleged and proved-admits of no departure, even at the
interlocutory stage. Respondent No.1 could not, by invoking the
inherent jurisdiction under Section 151 of CPC, secure at the
interlocutory stage substantive monetary relief that was never
pleaded or claimed in the first place. Equally, the Court could
not have and ought not to have invoked its inherent jurisdiction

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under Section 151 of CPC to grant substantive relief that falls
wholly outside the pleadings and the reliefs sought in the suit.
The inherent powers under Section 151 of CPC cannot be
employed for introducing into the suit a relief foreign to the
case as instituted.
6. It is submitted that the interim order granted travels
beyond the final relief. The inherent jurisdiction under Section
151 CPC cannot be invoked to circumvent a specific statutory
mechanism. Where a claim is sought to be secured pending
judgment, Order XXXVIII Rule 5 of the CPC entails the
provisions with safeguards that cannot be rendered otiose by a
mere invocation of Section 151 CPC. No finding records any
intent on the petitioner's part to dissipate or remove the
compensation, or any imminent threat warranting such
extraordinary protection. In its absence, the direction to deposit
is, in substance, security in advance of an unadjudicated claim,
an attachment before judgment clothed in the language of
inherent power. What the Code forbids directly cannot be
permitted obliquely. The stark disparity between the alleged
advance and the disputed agreement, and the amount directed

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to be deposited, makes the basis for the impugned direction all
the more untenable. The consideration under the disputed
unregistered agreement is Rs.54,75,000/-, against which
respondent No.1 claims an advance of Rs.15,00,000/-. Yet the
directed deposit exceeds that advance by more than fiftyfold
without any adjudication or determination under Section 21 of
the Specific Relief Act. It is submitted that the petitioner is
protected as a bonafide purchaser for value.
7. Learned counsel further submits that the impugned
order is bereft of reasons. The issue is not one of re-
appreciating evidence or choosing between competing plausible
views. It is whether, in the absence of a pleaded claim, an
adjudicated right, or any statutory foundation, the trial Court
could compel the petitioner to deposit Rs.7,50,00,000/-. The
impugned order is vitiated by jurisdictional error; it travels
beyond the pleadings; it circumvents the safeguards in Order
XXXVIII Rule 5 CPC; it disregards the provisions under Section
21 of the Specific Relief Act; and it discloses no reasoned basis
for the relief granted. The matter is further aggravated by
respondent No.1 having previously approached this Court

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seeking the very same relief and thereafter pursuing it before
the trial Court, an impermissible exercise in forum shopping
and bench hunting. The impugned order, being thus
fundamentally infirm, warrants interference in exercise of the
jurisdiction under Articles 226 and 227 of the Constitution of
India.
8. Learned Senior counsel had relied on the judgment of
the Apex Court in the case of Jagadish Singh Vs. Nathhu
1
Singh , at para 19, 20 and 24 which reads as follows:
“19. In Mohamad Abdul Jabbar v. Lalmia [AIR
1947 Nag 254 : 1947 NLJ 253 : ILR 1947 Nag
328] specific performance of an agreement of
sale dated January 16, 1934, was sought by the
institution of a suit on January 15, 1937. During
the pendency of the suit, on April 20, 1937, the
provincial government started land acquisition
proceedings respecting the subject matter of the
suit and the same was acquired. The High Court
upheld the dismissal of the suit for specific
performance and referred an amendment for
award of damages. On the obvious
impermissibility of specific performance the
Nagpur High Court said: (AIR p. 256, para 14)
“We accordingly conclude that specific
performance is now impossible and we cannot
decree it for ‘equity like nature does nothing in
vain’. We cannot hold the plaintiffs-appellants
entitled to the compensation money into which
the property was converted because they had no
right nor interest in that property….”

1
(1992) 1 SCC 647

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20. Refusing the amendment for the relief for
payment of money the High Court held: (AIR p.
256, para 14)
“We would not allow amendment also because on
the facts found by the trial court (with which we
see no reason, whatever, to differ) we would
have refused specific performance, and the claim
for damages on this account would also have
been negatived because damages could have
been awarded only if specific performance could
rightly have been claimed. The appeal, therefore,
fails and is dismissed with costs.”
24. When the plaintiff by his option has made
specific performance impossible, Section 21 does
not entitle him to seek damages. That position is
common to both Section 2 of Lord Cairn's Act,
1858 and Section 21 of the Specific Relief Act,
1963. But in Indian law where the contract, for no
fault of the plaintiff, becomes impossible of
performance Section 21 enables award of
compensation in lieu and substitution of specific
performance.”

a) He relied on the judgment of the Co-ordinate Bench of
2
this Court in the case of Pillamma Vs. Rangaraju , at
paragraph Nos.11 and 13 which reads as follows:
“11. On the basis of the dictum in the aforesaid
Decision, learned Counsel for the Respondent
persuaded me to take the view that the Supreme
Court has taken the view that, when the subject
matter of the suit for specific performance is
acquired under the Land Acquisition Act, during
the pendency of the proceedings, the agreement
holder is entitled to the compensation that is
awarded under the Land Acquisition Act. I am
afraid that, that is not the dictum laid down in the
aforesaid Decision. The Supreme Court proceeds

2
ILR 1996 KAR 706

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on the basis that when the land is acquired during
the pendency of the suit for specific performance,
the agreement becomes incapable of
performance. But Their Lordships have
considered the position of law under the English
Law and under the Indian Law as to what is the
relief that can be granted to the plaintiff in such
circumstances. Their Lordships held that, inspite
of the land being acquired, the plaintiff is entitled
to compensation as provided for under Section 21
of the Specific Relief Act, for, the contract became
unenforceable not due to any fault of the plaintiff.
As stated earlier, Their Lordships further held
that unlike the English law, under Indian Law,
even in such circumstances, Section 21 of the
Specific Relief Act enables awarding of
compensation in lieu of and substitution of
specific performance; the mere fact that Their
Lordships took into account the compensation
due under the land acquisition compensation as
the measure of damages for fixing the
compensation, does not mean that the plaintiff, in
such a suit, is entitled to all the benefits which
accrued under the Land Acquisition Proceedings.
The agreement holder cannot be substituted in
the place of an owner. The Agreement - holder,
when his contract becomes unenforceable, is only
entitled to compensation as provided for under
Section 21 of the Specific Relief Act which the
Court is entitled to determine taking into account
the facts and circumstances of the case. No
doubt, in considering the measure of damages,
the compensation awarded under the Land
Acquisition Act for the land may be a relevant
factor. The aforesaid Decision has not laid down
the law that the plaintiff in such a suit is to be
substituted in the place of the land owner in
regard to the compensation payable under the
Land Acquisition Act. In that view of the matter,
the aforesaid Decision cannot help the
respondent-plaintiff in contending that he is
entitled to all the benefits arising under the Land
Acquisition Proceedings.
13. It is made clear that, if the plaintiff is entitled
to specific performance of the contract and if the

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land is acquired during the pendency of the
proceedings, he may be entitled to claim
compensation under Section 21 of the Specific
Relief Act. The Proviso to sub-section 5 of Section
21 provides that, where the plaintiff has not
claimed any such compensation in the plaint, the
Court shall, at any stage of the proceedings, allow
him to amend the plaint on such terms as may be
just to include such claim for compensation. The
plaintiff may be entitled to get the plaint
amended in accordance with Section 21 of the
Specific Relief Act, if he so chooses to do, but,
certainly a plaint cannot be amended by claiming
the entire benefits arising out of the Land
Acquisition Proceedings. Accordingly, I make it
clear that the Decision in this Revision will not
stand in the way of the respondent-plaintiff
seeking appropriate amendment of the plaint in
accordance with Section 21 of the Specific Relief
Act.”

b) Learned Senior counsel had relied on the judgment of
the Co-ordinate Bench of this Court in the case of Rajamma
3
Vs. Munigiddamma and others , at paragraph Nos.9 and 10
which reads thus:
“9. A perusal of these decisions of Their Lordships
of the Supreme Court, in the context of Section 54
which deals with the contract of agreement or
agreement to sale as defined, clearly declare the
law and legal position that an agreement to sell
does not create nor confers any title or interest in
favour of the person mentioned therein as a
prospective vendee. This being the position, the
agreement to sell cannot be held to have
conferred any title with respect to the property
i.e., Sy.No.6 in favour of the present appellant
even if the plot No.6 is taken or assumed for a

3
MFA.No.4803/1999 (LAC)

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while to be mentioned in the agreement. That
even if it is taken to be included in the
agreement, no right did pass on in favour of the
appellant under the aforesaid agreement. The
land had been acquired, no doubt, after the
agreement for sale had been entered into. The
land had been acquired vide preliminary
notification in the year 1991 and published in the
year 1994. When the land had been acquired, the
right to compensation under law did fall on the
heir or heirs of the owner of the land namely Smt.
Narayanamma, widow of late Sri. Venkatappa.
The learned counsel for the appellant contends
that when the Power of Attorney had been
executed by Smt. Narayanamma in favour of Smt.
Rajamma, thereunder interest had been
transferred in favour of the present appellant.
Ordinarily, Power of Attorney authorizes a person
to act for and on behalf of the donor of the Power
of Attorney. Whether an interest had been
conferred thereunder in favour of the appellant is
a doubtful question and on that point we do not
want to express any final opinion at this stage
because expressing of an opinion in favour of one
or another may damage the interest of either of
the parties. But, even if interest is to be
transferred in the property by a Power of
Attorney, then for transferring an interest in the
property, the Power of Attorney would require its
registration. Ordinarily Power of Attorney may
not require registration, but under the Power of
Attorney if interest in the property valuing more
than Rs.100-00 is conferred or given, then it will
not only amount to be Power of Attorney, but
transfer and that transfer had to be made by
execution of registered deed of transfer.
When we so observe, we find support for our view
from the decision of Calcutta High Court in the
case of INDRA BIBI V. JAIN SIRDAR AHIRI
reported in I.L.R. Volume XXXV (1908) Calcutta
845, Hon'ble Maclean, C.J., observed at page
No.848 as under: -
"I will, however, assume in favour of the
appellant that the document did constitute an

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equitable charge in favour of the person, to whom
the power was given, but even then, the want of
registration in compliance with the provisions of
the Registration Act is fatal to the plaintiff's case.
It is quite clear under Section 17 of that Act, that
if the document was one, which purported to
affect, or to create any interest in immoveable
property, it was bound to be registered. Section
49 says that "No document required by section 17
to be registered shall affect any immoveable
property comprised therein unless it has been
registered in accordance with the provisions of
this Act."
When we look into the circumstances of this case
it appears that the document in question has not
been registered in compliance with the provisions
of the Act. It was admittedly stamped only with
the stamp required for a power-of-attorney and
not for a document creating an equitable charge,
and it was apparently so presented to the
Registering Officer. If it was an equitable charge,
it is quite clear that it ought to have been entered
in Book I, and certain particulars, which are
compulsorily required by section 21 of the Act
relating to immoveable property, ought to have
been furnished. Section 21 says that: "No non-
testamentary document relating to immoveable
property shall be accepted for registration, unless
it contains a description of such property
sufficient to identify the same." That was not the
case here-there was no such description-and in
point of fact the document was entered, not in
Book I, which is a register of non-testamentary
documents relating to immoveable property, but
was entered in Book IV, which is a "Miscellaneous
Register". The case of NAJIBULLA MULLA v.
NASIR MISTRI (1) is akin to the present. But, to
my mind, it is sufficient to say that the document
was not registered in accordance with the
provisions of the Act and, therefore, under section
49, it could not affect any immoveable property
comprised therein."

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Harington, J., and Fletcher, J., expressed their
complete agreement with the view expressed by
Maclean, C.J., in this case.
10. In view of the above, we are of the view that
even if it be assumed that any equitable interest
has been created in favour of the appellant, but
as the document has not been registered, no
equitable interest could and did pass on in favour
of the appellant under that deed for want of
registration. In this view of the matter, in our
opinion, no right did pass on to the or in favour of
the appellant with respect to the property,
whether it is subject matter of agreement to sell
or subject matter of Power of Attorney. No doubt,
right to manage might have been there. But it
cannot be said that thereunder the appellant
became entitled to claim compensation in the
land acquisition proceedings from the
Government with respect to the land acquired and
it is not such that a person who alleges to have
paid entire sale consideration has no remedy. The
law is very clear on this aspect of the matter and
the remedy of the appellant is to file a suit for
compensation as the decree for specific
performance of contract of sale cannot be granted
as the property had already been acquired by the
Government. The contract might have become
impossible of performance, but it could not be
said that it is because of the fault of the
appellant, instead it could be said that it became
impossible of performance because of the change
of position and on account of acquisition of the
plot by the Government in the land acquisition
proceedings. In such cases, Section 21 of the
Specific Relief Act read with other provision will
come to the rescue of the appellant. This question
has been considered in greater detail by Their
Lordships of the Supreme Court in the case of
JAGDISH SINGH v. NATTHU SINGH reported in
A.I.R. 1992 Supreme Court 1604, where Their
Lordships of the Supreme Court, after
examination of the case law, have been pleased
to lay it down as under:-

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"When the plaintiff by his option has made
specific performance impossible, S.21 does not
entitle him to seek damages. This position is
common to both S.2 of Lord Cairn's Act, 1858 and
S.21 of the Specific Relief Act, 1963. But in Indian
Law that contract, for no fault of the plaintiff,
becomes impossible of performance. S.21 enables
award of compensation in lieu and substitution of
specific performance."
This decision of Their Lordships has been followed
in a Single Judge's decision of this Court and the
law to the effect has been laid down by this Court
as well in the case of Smt. PILLAMMA & OTHERS
v. P. RANGARAJU reported in 1996(1) Karnataka
Law Journal 447. In that case, after having placed
reliance on the above Supreme Court's decision,
this Court laid it down that the plaintiff may be
entitled to get the plaint amended and seek for
compensation to be determined under Section 21
of the Specific Relief Act and therefore, it is
permissible to the appellant to seek for
amendment of the plaint of suit No.172/98. No
doubt, plaintiff may have to pay the Court-fee.
But, he is entitled to seek decree for damages or
compensation for breach of contract which has
become impossible of performance for no act or
fault of the present appellant.
Thus considered, we are of the opinion that the
present appeal deserves to be dismissed, but
making it clear that any observation made about
the proof of execution of agreement will not be
binding on the Civil Court. The appeal having been
dismissed, it is open to the respondents to take
the compensation amount. But, they have to
furnish an undertaking before the Civil Court that
they will abide by the decree passed by the Civil
Court.”

c) He relied on the judgment of the Co-ordinate Bench of
this Court in the case of Raghavendra R.A. Vs. State of

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4
Karnataka and Others , at paragraph Nos.13 and 33 which
reads as follows:
“13. Having heard the learned counsel for the
parties, the questions that arise for consideration
are:
"i. Whether the petitioner, being an agreement
holder, can challenge the acquisition proceedings
or claim compensation?
ii. Whether the parties may seek a reference for
adjudication under Section 30 of the Land
Acquisition Act, 1894 ('LA Act' for short) and seek
deposit of the compensation amount before the
competent Court?"
33. The Apex Court in the case of G.H. Grant held
that a 'person interested includes anyone who
claims to be entitled to compensation whether as
a owner, mortgagee, lessee or any other person
having interest in the land or its compensation'.
The right to receive compensation may devolve by
operation of law. Agreement holder, whose
contract of sale has not culminated in a registered
conveyance, whose title or possession has not
been judicially recognized, cannot automatically
be treated as 'a person interested', in the
acquired property. The mere existence of an
unperformed or disputed agreement does not
confer a proprietary or compensatory right in the
land or its value. Recognition under Section 30
arises only when the claimant demonstrates an
existing legal or equitable entitlement capable of
judicial determination. Unless the agreement is
proven to be valid, substituted and supported by
consideration, the holder cannot maintain a claim
for compensation, as his right has not yet
established in law. Accordingly, the points framed
for consideration are answered.”

4
WP.No.15159/2025 (LA-KIADB)

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d) He relied on the judgment of the Co-ordinate Bench of this
Court in the case of Rudramma Vs. Suresh Kumar and
5
others , at paragraph Nos.3 and 5 which reads thus:
“3. The trial court had discussed the case of the
plaintiff and observed that the notification which
is issued by the defendant No. 11, statutory body
is not in dispute. Without challenging any of the
acquisition proceedings, the present suit is filed
for bare injunction and the court had relied on the
judgment of the Hon'ble Apex Court in the case of
Commissioner, Bangalore Development Authority
1
v. Brijesh Reddy that the Land Acquisition Act is
a complete code in itself and is meant to serve
public purpose. By necessary implication, the
power of the civil court to take cognizance of the
case under Section 9 of CPC stands excluded and
a civil court has no jurisdiction to go into the
question of the validity or legality of the
notification under Section 4, declaration under
section 6 and subsequent proceedings except by
the High Court in a proceeding under Article 226
of the Constitution. It is thus clear that, the civil
court is devoid of jurisdiction to give declaration
or even bare injunction being granted on the
invalidity of the procedure contemplated under
the Act. It is observed that the only right
available for the aggrieved person is to approach
the High Court under Article 226 or Hon'ble Apex
Court under Article 136 with self-imposed
restrictions on their exercise of extraordinary
power. Relying on the said judgment, the court
had held that the suit is not maintainable.
Aggrieved thereby the petitioner/plaintiff is
before this court.
5. Having heard the learned counsel for the
petitioner, perused the entire material on record.
The relief that is sought in the suit is granting an
injunction restraining the Land Acquisition Officer
from taking steps to disperse compensation

5
2024 SCC OnLine Kar 8856

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amount in respect of the schedule property on the
basis of the final Gazette Notification. The Land
Acquisition Act is a complete code in itself which
contains all the provisions right from the issuance
of 4(1) notification till the disbursement of the
amount. The intervention of the courts when the
land acquisition proceedings are initiated which
are in the larger interest of the public is very
limited. There are several steps under the Land
Acquisition Act, whereby the parties who are the
owners of the property will get an opportunity to
present their case before the Land Acquisition
Officer. In case there is genuine dispute with
regard to the title of the property, the same has
to be brought to the notice of the Land
Acquisition Officer and on such a reference would
be made to the Civil Court, even if they are not
happy with the compensation that is fixed,
reference lies to the Civil Court. In between on
any of the procedural regularities if a person is
aggrieved, only remedy available to them is to
come before this court under Article 226 of the
Constitution of India and the Civil Court except on
the said two issues will not have jurisdiction to
entertain any petition in whatever form and
whatever nomenclature a suit is filed. The court
below had rightly considered the judgment of the
Bangalore Development Authority, Bangalore
referred to Supra and held that the suit is not
maintainable. This court finds no reasons to
interfere with the well explained order.”

e) He relied on the judgment of the Co-ordinate Bench of
this Court in the case of Mohammad Zaheer Vs. BDA and
6
others , at paragraph No.10 which reads as follows:
“10. This Court was following the
judgment of the Apex Court wherein the Apex
Court holds that an agreement holder registered

6
WP.No.10028/2024 (LA-BDA)

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or unregistered would not get any right
whatsoever, as the instrument of conveyance
requires the agreement of sale to be taken to its
logical conclusion, which has not happened
therein and which did not happen in the case at
hand as well. Therefore, the agreements of sale
have remained as agreements. Thus, the
petitioner has no right to claim compensation,
plainly on the observation of the Apex Court on
his impleading application, as quoted
hereinabove.”

f) He relied on the judgment of the Apex Court in the
case of Sant Lal Gupta and others Vs. Modern Cooperative
7
Housing Society and Others , at paragraph Nos.16 and 19
which reads thus:
“16. Be that as it may, the High Court has
referred to its Division Bench judgment in B.B.
Chibber v. Anand Lok Co-operative Group Housing
Society Ltd. & Ors., 90 (2001) DLT 652, wherein
the same provision has been considered and it
had categorically been held that deeming
approval was not legally permissible. In view of
the above, it was neither desirable nor
permissible by the Co-ordinate Bench to
disapprove the earlier judgment and take view
contrary to it. More so, extension of the period
from 6 months to 1 year amounts to legislation.
19. In the instant case, the position before us is
worse as the latter bench has taken a divergent
view from an earlier coordinate bench,
particularly taking note of the earlier decision
holding otherwise, without explaining why it
could not follow the said precedent even while
extensively quoting the same. Judicial propriety
and discipline are not served by such conduct on

7
(2010) 13 SCC 336

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the part of the division bench. Thus, in view of the
above, it was not permissible for the High Court
to take the course which it has adopted and such
a course cannot be approved.”

g) He relied on the judgment of the Delhi High Court in
the case of Black Diamond Track Parts Private Limtied and
8
Others Vs. Black Diamond Motors Private Limited , at
paragraph Nos.24, 25 and 29 which reads thus:
“24. The counsel for the appellants/defendants in
his written arguments, in this context has made
apposite reference to, (a) Union of India Vs. Cipla
Ltd. (2017) 5 SCC 262. The same unequivocally
holds, "A classic example of forum shopping is
when a litigant approaches one Court for relief
but does not get the desired relief and then
approaches another Court for the same relief"
and "Another form of forum shopping is taking
advantage of a view held by a particular High
Court in contrast to a different view held by
another High Court" and "Another category of
forum shopping is approaching different Courts
for the same relief by making a minor change in
the prayer clause of the petition"; and, (b) Allied
Blenders and Distillers Pvt. Ltd. Vs. Amit
Dahanukar 2019 SCC OnLine Del 8898 where the
suit filed in Delhi, after the subsidiary of the
plaintiff had failed to get the interim relief in a
suit earlier filed at Bombay, was held to be by
way of forum shopping and in abuse of the
process of the Court.
25. Mention may also be made of the fact that the
decision in Sarguja Transport Service supra was
referred to in a latter decision in Sarva Shramik
Sanghatana (K.V), Mumbai Vs. State of
Maharashtra (2008) 1 SCC 494 and it was held

8
FOA (COMM) 41/2021 & CM No.6428/2021

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that Sarguja Transport Service supra would apply
only where the first petition was withdrawn in
order to do bench hunting or for some other mala
fide purpose. Mention may yet further be made of
Shridhar Gupta Vs. NDMC AIR 2015 Delhi 48 (DB),
where finding that the petitioner, after failing to
satisfy the Court in an earlier writ petition, had
withdrawn the same, the second writ petition was
held to be by way of re- litigation and in abuse of
the process of the Court.
29. We are thus of the view that the
respondent/plaintiff was/is not entitled to
interim injunction and the appeal is entitled to be
allowed, on this ground alone.”
h) He relied on the judgment of the Co-ordinate Bench of
this Court in the case of Frances and Ors Vs. Arogyamma
9
and Ors , at paragraph Nos.20 and 21 which read thus:
“20. The learned counsel for the
respondents/defendants relying upon the
judgment in the case of DASAPPA v. SEETHARAM
reported in ILR 1995 KAR 1683 contended that
the plaintiffs are not bound to seek decree for
declaration. Decision on question of title,
possessory title or title otherwise, ancillary in the
proceedings and unless proved not entitled to
decree for possession or injunction. Plaintiff to
stand on own legs not on weakness of
defendant's case.
21. The learned counsel for the respondents
relied upon the judgment of this Court in the case
of K. GOPALA REDDY (DECEASED) BY LRS. v.
SURYANARAYANA AND OTHERS reported in 2004
(1) KCCR 662, wherein it is held that whenever a
party approaches the Court for a relief, based on
the pleadings and issues, he has to prove his
case. A suit has to be decided based on merits
and demerits of the party who approaches the

9
RFA No.573/2010

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Court. Weakness of the defendant cannot be
considered as a trump card for the plaintiff. Mere
entries in the revenue records cannot be a basis
to declare title of a person in respect of any
immovable property. Hence, prayed this Court to
dismiss the appeal.”

i) He relied on the judgment of the Apex Court in the
10
case of State of Orissa Vs. Madan Gopal Rungta , at
paragraph No.15 which reads thus:
“ In our opinion, Article 226 cannot be used for
the purpose of giving interim relief as the only
and final relief on the application as the High
Court has purported to do. The directions have
been given here only to circumvent the provisions
of section 80 of the Civil Procedure Code, and in
our opinion that is not within the scope of Article
226. An interim relief can be granted only in aid
of and as ancil- lary to the main relief which may
be available to the party on final determination of
his rights in a suit or proceed- ing. If the Court
was of opinion that there' was no other
convenient or adequate remedy open to the
petitioners, it might have proceeded to
investigate the case on its merits and come to a
decision as to whether the petitioners suc-
ceeded in establishing that there was an
infringement of any of their legal rights which
entitled them to a writ of mandamus or any other
directions of a like nature; and pending such
determination it might have made a suitable
interim order for maintaining the status quo ante.
But when the Court declined to decide on the
rights of the parties and expressly held that they
should be investigated more properly in a civil
suit, it could not, for the purpose of facilitating
the institution of such suit, issue directions in the
nature of temporary injunctions, under Article

10
1951 SCC 1024

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226 of the Constitution. In our opinion, the
language of article 226 does not permit such an
action. On that short ground the judgment of the
Orissa High Court under appeal cannot be
upheld.”

j) He relied on the judgment of the Apex Court in the
11
case of Shamsu Suhara Beevi Vs. G Alex and Another , at
paragraph No.11 which reads thus:
“11. It is admitted position before us that in the
original plaint the respondents did not claim
compensation for the breach of agreement of sale
either in addition to or in substitution of the
performance of the agreement. Further, the
respondents did not amend their plaint and ask
for compensation either in addition to or in
substitution of the performance of the agreement
of sale. Sub-section (5) of Section 21
emphatically provides that no compensation shall
be awarded under Section 21(5) unless the relief
for compensation has been claimed either in the
plaint or included later on by amending the plaint
at any stage of the proceedings. The need to file
an execution petition did not arise as the
appellant executed the sale deed on 17-8-1999.
We have perused the application filed by the
respondents. It is a simple application filed under
Section 28(3) of the Act seeking permission to
ascertain the extent of plaint schedule property
by measuring the same with the help of village
officer or by deputing an Advocate Commissioner
and directing the defendant-appellant to obtain a
“no-objection certificate” from the Department of
Income Tax. In addition, the respondents prayed
that they be permitted to recover interest @ 12%
towards loss of income on the sale amount of Rs
45,66,385 from 23-10-1997 i.e. the date of
deposit till delivery of the possession of the
property. Permission seeking to amend the plaint

11
(2004) 8 SCC 569

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to include the relief of compensation for breach of
the contract in addition to the specific
performance has not been made. The relief was
claimed under Section 28 and not under Section
21 of the Act. The High Court came to the
conclusion that Section 28 would not be
applicable to the facts of the case but granted the
relief under Section 21 of the Act. In our view, the
High Court has clearly erred in granting the
compensation under Section 21 in addition to the
relief of specific performance in the absence of
prayer made to that effect either in the plaint or
amending the same at any later stage of the
proceedings to include the relief of compensation
in addition to the relief of specific performance.
Grant of such a relief in the teeth of express
provisions of the statute to the contrary is not
permissible. On equitable considerations court
cannot ignore or overlook the provisions of the
statute. Equity must yield to law.”
k) He relied on the judgment of the Apex Court in the
12
case of Desh Raj and Others Vs. Rohtash Singh , at
paragraph Nos.9, 44 and 45 which reads thus:
“9. The situation remained dormant until January
2006 when the Respondent, the original plaintiff,
initiated a suit seeking relief of specific
performance of Sale Agreements and other
consequential reliefs. However, during the
pendency of the suit before the Trial Court, State
of Haryana initiated acquisition proceedings vide
notification dated 12.12.2008 issued under
Section 4 of Land Acquisition Act, 1894.
Consequently, the subject land was acquired by
the State vide award dated 23.11.2011. Due to
this subsequent event, the Respondent sought
and was permitted by the trial court to amend the
plaint.

12
2022 SCC Online SC 1719

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44. The Respondent in the instant case has
neither pleaded for refund of the earnest money
nor has he claimed any damages or penalty from
the Appellants. From the perusal of the records, it
is conspicuous that Respondent never raised any
concern that the pre estimated amount was
‘penal’ in nature and instead his sole objective
was to gain titular rights over the Concerned
Property on the strength of Sale Agreements.
45. In light of the above discussion, we must
conclude that the decree granted by the courts
below was hinged on a logical fallacy wherein the
Appellants were held to be unjustly enriched on
the premise that the contract was rendered
impossible to perform due to acquisition
proceedings. On the contrary, the contract
automatically stood terminated as per the
stipulated contractual terms. The Sale
Agreements should have been rightly held to be
terminated instead of being declared impossible
to perform.”

l) He relied on the judgment of the Allahabad High Court
13
in the case of Hamid Vs. Kailash , at paragraph Nos.28, 32
and 34 which reads thus:
“28. Learned counsel for the respondent has
rightly contended that though such relief can be
granted in a suit for specific performance but the
same cannot be granted while considering an
application under Section 76 of the Act of 2013.
Learned counsel for the respondent further
contended that no such relief can be granted
under Section 76 of the Act of 2013 as the scope
of enquiry is very limited. The authority while
exercising the power under Section 76 of the Act
of 2013 has to consider the rival claim of the
parties on the basis of right which has accrued to
the either of the parties and not on the basis of a

13
Writ-C No.26340/2025

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right which is yet not decided by a competent
court of law. It has also been contended by
learned counsel for the respondent that right to
claim compensation in a suit for specific
performance of an agreement is dependent on
various factors such as that the fault was on the
part of the defendant i.e. executor of the
agreement and not on the part of the plaintiff. In
case, such findings are recorded by the court
while deciding the suit for specific performance
and after holding the plaintiff to be entitled for a
decree for specific performance, relief can be
moulded by the court while deciding the suit, if it
comes to the conclusion that though the plaintiff
is entitled for a decree for specific performance
but for a intervening circumstance, such as
compulsory acquisition of land which was subject
matter of the suit, by the State, for no fault of the
plaintiff, the said relief cannot be granted. It has
been pointed out by the learned counsel for the
respondent that all the cases relied upon by the
learned counsel for the petitioners, wherein the
principle of grant of damages in lieu of decree for
specific performance of contract, the orders were
passed in proceedings arising out of suit for
specific performance and not in proceedings
under Section 76 of the Act of 2013 or under
Section 30 of the Land Acquisition Act, 1894.
There is no dispute to the proposition that
damages can be awarded in a suit for specific
performance. In case, an agreement is not
capable of specifically enforcing for no fault of the
plaintiff. But said relief cannot be granted in a
proceedings under Section 76 of the Act of 2013
while deciding the claim of apportionment of the
compensation between the rival claimants.
32.The Supreme Court in the said circumstances,
held that there are serious disputed question of
fact such as, whether earnest money was rightly
forfeited by the land owners due to failure of the
agreement holder to obtain sale deed executed
within a specified time fixed under the agreement
where the respondents were ready and willing to
purchase the property and had arrangement of
consideration for payment to the land owners.

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Relevant paragraph no. 8 & 9 of the judgment in
case of Ramesh Chand and others (supra) are
quoted as under:
“8. In the instant case, there were serious
disputed questions as to whether earnest money
had been rightly forfeited by the land owners due
to the failure of the respondent No. 1 to obtain
the sale deeds executed within stipulated time
fixed under the agreements, whether respondents
were ready and willing to purchase the property
and had arrangement of balance consideration for
payment to land owner. Whether the power of
forfeiture was rightly exercised by the land
owners as claimed by them. The Civil Court was
already in seisin of the matter as such reference
court had rightly rejected the reference made
under Section 30 of the Act and rightly asked
parties to await outcome of the regular civil suits.
9. The High Court in the impugned judgment has
not decided aforesaid objections raised by the
appellants/land owners without examining facts
and circumstances of the case and due to
pendency of civil suits, it was not open to the
High Court to order refund of the earnest money.”

9. Relying on the above judgments the learned counsel
for the petitioner submits that the impugned order needs to be
set aside.
10. Learned counsel appearing for respondent
No.1/plaintiff has also filed written submissions. It is submitted
that the pendente lite purchaser, having acquired the suit
property in deliberate violation of an injunction order after
nearly 10 years of the lis, cannot withdraw the acquisition
compensation representing the very suit property and thereby

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convert disobedience into an irreversible advantage, partaking
in the nature of a full decree dismissing suits for specific
performance. It is submitted that the trial court's direction to
re-deposit merely preserves the substituted res; it decides no
title and awards no compensation. It is submitted that the
petitioner intends to argue that the impugned order is bad on
the ground that respondent No. 1/plaintiff has not pleaded for
compensation under Section 21(5) of the Specific Relief Act,
that the nature of the interim order goes beyond the nature of
a decree, and that the right to compensation is inchoate. It is
submitted that the Hon'ble Apex Court in Jagdish Singh ’s case
referred supra has categorically held that in case of the
pendente lite acquisition, there is no necessity of amendment.
It is submitted that the arguments made by the petitioner
before this Court are based on an overruled proposition
observed by the Apex Court. It is submitted that defendant
Nos. 1 to 5 executed an Agreement of Sale in favor of the
plaintiff on 05.10.2007, and the plaintiff instituted the suit for
specific performance on 26.07.2012. Noting the prima facie
genuineness of the claim, the property was safeguarded until

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completion of the lis by way of an interim injunction, which
operated until further orders. The petitioner, a notorious
realtor, purchased the property by way of a Sale Deed dated
26.03.2022, nearly 10 years into the suit, while the restraint
against alienation remained operative. The petitioner therefore
entered the existing lis. It did not acquire an interest outside it.
Its claim is necessarily subordinate to the eventual decree
under Section 52 of the Transfer of Property Act, 1882, and
Section 19(b) of the Specific Relief Act, 1963, read with Section
40 of the Transfer of Property Act and Section 91 of the Indian
Trusts Act.
11. It is submitted that an agreement of sale is
undoubtedly not a complet transfer of ownership but an
equitable right leading to it. Decisively, the prior contract
creates an enforceable obligation attached to ownership.
Section 40 of the Transfer of Property Act and Section 91 of the
Indian Trusts Act recognize that obligation against a transferee
with notice. Going one step further, such agreements are not
even affected by court or judicial attachments, in view of the
statutory interplay. In this regard, he relied on the judgment of

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the Apex Court in Lala Durga Prasad and Another Vs. Lala
14
Deep Chand and Others , paragraph No.39 which reads
thus:
“39. section 91 of the Indian Trusts Act, 1882,
section 3 of the Specific Relief Act, 1877,
illustration (g), and section 27 of that Act, and
section 40 of the Transfer of Property Act. Section
91 of the Trusts Act, does not make the
subsequent purchaser with notice a trustee
properly so called but saddles him with an
obligation in the nature of a trust (because of
section 80) and directs that he must hold the
property for the benefit of the prior "contractor",
if we may so describe the plaintiff,. "to the extent
necessary to give effect to the contract." Section
3 illustration (g) of the Specific Relief Act makes
him a trustee for the plaintiff but only for ’the 368
purposes of that Act. Section 40 of the Transfer of
Property Act enacts that this obligation can be
enforced against a subsequent transferee with
notice but not against one who holds for
consideration and without notice. Section 27 of
the Specific Relief Act does not carry the matter
any further. All it says is that specific
performance may be enforced against "
"(a) either party thereto;
(b)any other person claiming under him by a title
arising subsequently to the contract, except a
transferee for value who has paid his money in
good faith and without notice of the original
contract".
None of this helps because none of these
provisions directly relate to the form of the
decree. It will therefore be necessary to analyse
each form in the light of other provisions of law.”


14
AIR 1954 SC 75

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a) Learned counsel had relied on the judgment in case of
Soni Lalji Jetha and Others Vs. Soni Kalidas Devchand
15
and Others at paragraph No.9 which reads thus:
“9. But paragraph 2 of s. 40 of the Transfer of
Property Act, 1882 in clear terms lays down that
where a third. person is entitled to the benefit of
an obligation arising out of contract and annexed
to the ownership of immovable property, but not
amounting to an interest therein, such right or
obligation may be enforced against a transferee
of the property affected thereby, but not against a
transferee for consideration and without notice of
the right or obligation nor against such property
in his hands. It is a right no doubt arising from
contract and the person agreeing to purchase the
property thereunder does not acquire any interest
in the property. Section 54 of the Transfer of
Property Act in terms provides that such a
contract of sale does not create as in English law
any equitable estate in the immovable property
which is the subject matter of the contract. But as
aforesaid, the contract creates an obligation
which is recognised by section 3 of the Specific
Relief Act, 1877 and section 91 of the Indian
Trusts Act, 1882. Section 3 of the Specific Relief
Act defines an "obligation" as including every
duty enforceable by law and a "trustee" as
including every person holding expressly, by
implication or constructively
a fiduciary character. Illustration (g) to that
section reads as follows :
"A buys certain land from B, with notice that B
has already contracted to buy it. A is a trustee,
within the meaning of this Act for B, of the land
so bought."
This principle is embodied in section 91 of the
Indian Trusts Act which lays down that where a

15
AIR 1967 SC 978

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person acquires property with notice that another
person has entered into an existing contract
affecting that property, of which specific
performance could be enforced, the former must
hold the property for the benefit of the latter to
the extent necessary to give effect to the
contract.”

b) Learned counsel had relied on the judgment in the
case of Bai Dosabai Vs. Mathurdas Govinddas and
16
Others , at paragraph Nos.7 to 9 which reads thus:
“7. We do not wish to go in any detail into the
question whether the English Equitable doctrine
of conversion of reality into personalty is
applicable in India. However, we do wish to say
that the Enghish doctrine of conversion of reality
into personalty cannot be bodily lifted from its
native English soil and transplanted in statute-
bound Indian law. But, we have to notice that
many of the principles of English Equity have
taken statutory form in India and have been
incorporated in occasional provisions of various
Indian statutes such as the Indian Trusts Act, the
Specific Relief Act, Transfer of Property Act etc.
and where a question of interpretation of such
Equity based statutory provisions arises we will
be well justified in seeking aid from the Equity
source. The concept and creation of duality of
ownership, legal and equitable, on the execution
of an agreement to convey immovable property,
as understood in England is alien to Indian Law
which recognises one owner i.e. the legal owner :
vide, Ramboran Prasad v. Ram Mohit Hazra & Ors.
and Narandas Karsondas v. S. A. Kamtam & Anr.
The ultimate paragraph of s. 54 of the Transfer of
Property Act, expressly enunciates that a contract
for the sale of immovable property does not, of
itself, create any interest in or charge on such
property. But the ultimate and penultimate

16
(1980) 3 SCC 545

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paragraphs of s. 40 of the Transfer of Property
Act make it clear that such a contract creates an
obligation annexed to the ownership of
immovable property, not amounting to an interest
in the property, but which obligation may be
enforced against a transferee with notice or the
contract or a gratuitous transferee of the
property. Thus the Equitable ownership in
property recognised by Equity in England is
translated into Indian law as an obligation
annexed to the ownership of property, not
amounting to an interest in the property, but an
obligation which may be enforced against a
transferee with notice or a gratuitous transferee.
8. If we now turn to the Indian Trusts Act, we
find "trust" defined as
"an obligation annexed to the ownership of
property, and arising out of a confidence reposed
in and accepted by the owner, or declared and
accepted by him, for the benefit of another, or of
another and the owner", and "beneficial interest"
defined as the interest of the beneficiary against
the trustee as owner of the trust- property.
Chapter IX of the Trusts Act enumerates in
section after section cases where obligations in
the nature of trust are created. S. 94 finally
provides:
In any case not coming within the scope of
any of the preceding sections, where there is no
trust, but the person having possession of
property has not the whole beneficial interest
therein, he must hold the property for the benefit
of the persons having such interest, or the
residue thereof (as the case may be), to the
extent necessary to satisfy their just demands".

9. We may now examine some of the provisions of
the Specific Relief Act, 1877, which though
repealed and replaced by Act 47 of 1963. is the
statute with which we are concerned. "Trust" was
defined in Section 3 of the 1877 Act as having
"the same meaning as in Section 3 of the Indian
Trusts Act" and as "including an obligation in the
nature of a trust within the meaning of Chapter IX

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of that Act". Section 12(a) of the Act of 1877
provided, "Except as otherwise provided in this
Act, specific performance of contract may, in the
discretion of the Court, be enforced when the act
agreed to be done is in the performance wholly or
partly of a trust". The other clauses of Section 12
and Sections 13 to 18 enumerated the other
contracts which might be specifically enforced. S.
21 specified when contracts were not specifically
enforceable. S. 16 is of some relevance. It said:
"when part of a contract which, taken by
itself can and ought to be specifically performed,
stands on a separate and independent footing
from another part of the same contract which
cannot or ought not to be specifically performed,
the Court may direct specific performance of the
former part"

c) He relied on the judgment in Vannarakkal
Kallalathil Sreedharan Vs. Chandramaath Balakrishnan
17
and Another , at paragraph No.5 which reads as follows:
“5. We may first draw attention to some of the
relevant statutory provisions bearing on the
question. Order 38 Rule 10 of the Code of Civil
Procedure provides that attachment before
judgment shall not affect the rights existing prior
to the attachment of persons not parties to the
suit. Under Section 40 of the Transfer of Property
Act, a purchaser under a contract of sale of land is
entitled to the benefit of an obligation arising out
of that contract and it pro- vides that that
obligation may be enforced inter alia against a
transferee with notice. Section 91 of the Trusts
Act also recognises this principle that the
transferee with notice of an existing contract of
which specific performance can be enforced must
hold the property for the benefit of the party to
the contract. These are equitable rights though
not amounting to interest in immovable property
within the meaning of Section 54 of the Transfer

17
(1990) 3 SCC 291

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of Property Act which declares that a contract of
sale does not create an interest in the property.
On this line of reasoning it has been held by the
Madras High Court that the purchaser of an
antecedent agreement gets good title despite
attachment. See Paparaju Veeraraghavayya v.
Killaru Kamala Devi & Ors., AIR 1935 Mad. 193,
Veerappa Thevar & Ors. v.C.S. Venkataramma
Aiyar & Ors., AIR 1935 Mad. 872 and Angu Pillai
v.M.S.M. Kasiviswa- nathan Chettiar, [AIR 1974
Mad. 16].”

12. It is submitted that the above judgments, which form
the common fabric of Sections 40 and 52 of the TP Act and
Section 91 of the Indian Trusts Act, preserve the distinction
between title and the antecedent equitable obligation of the
nature of the Agreement for Sale. A later claimant can obtain
only the transferor’s right, title, and interest, which may also be
saddled by the pre-existing contractual obligation. If that
obligation follows the land, it cannot be defeated merely
because compulsory acquisition has changed the form of the
subject matter from land into money. It is submitted that the
acquisition did not retrospectively legitimize the prohibited
transfer or extinguish the plaintiff's pending claim. It changed
the form of the subject matter. The land became unavailable
for conveyance; the acquisition compensation becomes
identifiable monetary substitute. The penultimate question

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would therefore not be who first obtained possession of the
money, but whether the funds should remain available to
answer the decree ultimately passed in the suit in terms of
Section 94 of the CPC. In Jagdish Singh’s case referred supra,
acquisition makes specific performance impossible without the
fault of the plaintiff, Section 21 of the Specific Relief Act
permits substituted performance or compensation in
substitution, measured with reference to the acquisition
compensation. The decision is of pivotal importance.
13. It is submitted that the Apex Court in Sukhbir Singh
18
Vs. Ajit Singh , treated the successful agreement holder is
entitled to acquisition compensation on the facts as adjudicated
and concluded that the acquisition compensation, solatium, and
statutory interest altogether notionally itself represented the
compensation under Section 73 and 74 of the Indian Contract
Act, as a measure of substituted performance. Similarly, the
Apex Court in the case of Urmila Devi Vs. Deity, Mandir
19
Shree Chamunda Devi similarly measures a substituted
relief by the acquisition award and directs restoration from a

18
(2021) 6 SCC 54
19
(2018) 2 SCC 284

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recipient found disentitled. These decisions do not determine
the respondent's final entitlement; they establish that the
compensation is the very fund against which the eventual
decree may operate. It is submitted that, as a matter of
abundant caution and clarification, the respondent does not
contend that every agreement holder automatically becomes a
‘person interested’ in acquisition proceedings, nor does the
respondent advance the fallacious proposition that acquisition
automatically ends the suit. The submission is that a Civil Court
already seized off the specific performance claim may preserve
the identifiable monetary substitute pending proof and final
adjudication. It is submitted that the order under challenge
does not finally award damages. Section 21(5) of the Specific
relief Act ordinarily requires compensation to be claimed, while
its proviso permits amendment at any stage on just terms. He
relied on the judgment in the case of Universal
20
Petrochemicals Ltd. Vs. BP PLC , and submits that it
restrains a final award made without the statutory pleading. It
does not compel the Court to permit the dissipation of the fund
before the pleadings and entitlement are adjudicated. It is

20
2022 INSC 200

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further submitted that the petitioner is not only a pendente lite
purchaser but also a perpetrator of contempt and a claimant
under a contumacious transaction. It is submitted that the
Hon'ble Apex Court in the case of Surjit Singh Vs. Harbans
21
Singh , at paragraph No.4 answered the ill-attempted
advantage:
“4. As said before, the assignment is by means of
a registered deed. The assignment had taken
place after the passing of the preliminary decree
in which Pritam Singh has been allotted 1/3rd
share. His right to property to that extent stood
established. A decree relating to immovable
property worth more than hundred rupees, if
being assigned, was required to be registered.
That has instantly been done. It is per se
property, for it relates to the immovable property
involved in the suit. It clearly and squarely fell
within the ambit of the restraint order. In sum, it
did not make any appreciable difference whether
property per se had been alienated or a decree
pertaining to that property. In defiance of the
restraint order, the alienation/assignment was
made. If we were to let it go as such, it would
defeat the ends of justice and the prevalent public
policy. When the Court intends a particular state
of affairs to exist while it is in seisin of a lis, that
state of affairs is not only required to be
maintained, but it is presumed to exist till the
Court orders otherwise. The Court, in these
circumstances has the duty, as also the right, to
treat the alienation/assignment as having not
taken place at all for its purposes. Once that is so,
Pritam Singh and his assignees, respondents
herein, cannot claim to be impleaded as parties
on the basis of assignment. Therefore, the
assignees-respondents could not have been

21
(1995) 6 SCC 50

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impleaded by the trial court as parties to the suit,
in disobedience of its orders. The principles of lis
pendens are altogether on a different footing. We
do not propose to examine their involvement
presently. All what is emphasised is that the
assignees in the present facts and circumstances
had no cause to be impleaded as parties to the
suit. On that basis, there was no cause for going
into the question of interpretation of paragraphs
13 and 14 of the settlement deed. The path
treaded by the courts below was, in our view, out
of their bounds. Unhesitatingly, we upset all the
three orders of the courts below and reject the
application of the assignees for impleadment
under Order 22 Rule 10 CPC.”


14. The Apex Court in the case of Vidur Impex and
22
Traders (P) Ltd. Vs. Tosh Apartments (P) Ltd. , identifies
the precise vice present in the current case, i.e., that a
beneficiary of a clandestine transaction made in violation of a
restraint order acquires no claim to discretionary indulgence.
The petitioner cannot derive an equity from its vendors’
disobedience and employ that equity to defeat the plaintiff's
prior claim. It is submitted that the Apex Court in Delhi
Development Authority Vs. Skipper Construction Co. (P)
23
Ltd. , at paragraph Nos.17 to 21 which reads thus:
“17. The principle that a contemner ought not to
be permitted to enjoy and/or keep the fruits of

22
(2012) 8 SCC 384
23
(1996) 4 SCC 622

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his contempt is well settled. In Mohd. Idris v.
Rustam Jehangir Babuji [(1984) 4 SCC 216 : 1984
SCC (Cri) 587 : (1985) 1 SCR 598] this Court held
clearly that undergoing the punishment for
contempt does not mean that the court is not
entitled to give appropriate directions for
remedying and rectifying the things done in
violation of its orders. The petitioners therein had
given an undertaking to the Bombay High Court.
They acted in breach of it. A learned Single Judge
held them guilty of contempt and imposed a
sentence of one month's imprisonment. In
addition thereto, the learned Single Judge made
appropriate directions to remedy the breach of
undertaking. It was contended before this Court
that the learned Judge was not justified in giving
the aforesaid directions in addition to punishing
the petitioners for contempt of court. The
argument was rejected holding that “the Single
Judge was quite right in giving appropriate
directions to close the breach (of undertaking)”.
18. The above principle has been applied even in
the case of violation of orders of injunction issued
by civil courts. In Clarke v. Chadburn [(1985) 1
All ER 211] Sir Robert Megarry V-C observed:
“I need not cite authority for the proposition
that it is of high importance that orders of the
court should be obeyed. Wilful disobedience to an
order of the court is punishable as a contempt of
court, and I feel no doubt that such disobedience
may properly be described as being illegal. If by
such disobedience the persons enjoined claim
that they have validly effected some charge in the
rights and liabilities of others, I cannot see why it
should be said that although they are liable to
penalties for contempt of court for doing what
they did, nevertheless those acts were validly
done. Of course, if an act is done, it is not undone
merely by pointing out that it was done in breach
of the law. If a meeting is held in breach of an
injunction, it cannot be said that the meeting has
not been held. But the legal consequences of
what has been done in breach of the law may
plainly be very much affected by the illegality. It
seems to me on principle that those who defy a

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prohibition ought not to be able to claim that the
fruits of their defiance are good, and not tainted
by the illegality that produced them.”

19. To the same effect are the decisions of the
Madras and Calcutta High Courts in Century Flour
Mills Ltd. v. S. Suppiah [AIR 1975 Mad 270 :
(1975) 2 MLJ 54] and Sujit Pal v. Prabir Kumar
Sun [AIR 1986 Cal 220 : (1986) 90 CWN 342] . In
Century Flour Mills Ltd. [AIR 1975 Mad 270 :
(1975) 2 MLJ 54] it was held by a Full Bench of
the Madras High Court that where an act is done
in violation of an order of stay or injunction, it is
the duty of the court, as a policy, to set the wrong
right and not allow the perpetuation of the
wrongdoing. The inherent power of the court, it
was held, is not only available in such a case, but
it is bound to exercise it to undo the wrong in the
interest of justice. That was a case where a
meeting was held contrary to an order of
injunction. The Court refused to recognise that
the holding of the meeting is a legal one. It put
back the parties in the same position as they
stood immediately prior to the service of the
interim order.
20. In Sujit Pal [AIR 1986 Cal 220 : (1986) 90
CWN 342] a Division Bench of the Calcutta High
Court has taken the same view. There, the
defendant forcibly dispossessed the plaintiff in
violation of the order of injunction and took
possession of the property. The Court directed the
restoration of possession to the plaintiff with the
aid of police. The Court observed that no
technicality can prevent the court from doing
justice in exercise of its inherent powers. It held
that the object of Rule 2-A of Order 39 will be
fulfilled only where such mandatory direction is
given for restoration of possession to the
aggrieved party. This was necessary, it observed,
to prevent the abuse of process of law.
21. There is no doubt that this salutary rule has to
be applied and given effect to by this Court, if
necessary, by overruling any procedural or other

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technical objections. Article 129 is a
constitutional power and when exercised in
tandem with Article 142, all such objections
should give way. The court must ensure full
justice between the parties before it.”

15. It carries the principle from condemnation to remedy.
A Court is not confined to punishing disobedience. It may set
the wrong right, undo the consequences of the breach, and
prevent the contemnor from retaining its fruits. The respondent
submits that redeposit is exactly such a restorative measure. It
is submitted that the Apex Court in the case of Balwantbhai
24
Somabhai Bhandari Vs. Hiralal Somabhai Contractor ,
supplies both the rule and its limit, and the Apex Court
observed that an ordinary transfer pendente lite is not void
merely because Section 52 of the Transfer of Property Act
applies. However, a transfer made in wilful breach of an
injunction may be neutralized so that neither the contemnor
nor anyone claiming under him retains the advantage. The
respondent's case rests on this proved contumacious setting,
not on the overbroad proposition that every pendente lite
transfer is void ab initio.

24
2023 SCC OnLine SC 1139

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16. It is submitted that I.A.No.53 seeks the Court' s
custody of the substituted res, not its ownership. Any manner
of redeposit does not confer any right on the plaintiff to
withdraw the amount, creates no final charge, and does not
determine apportionment. It keeps the fund within the custody
of the court or the reference, so that success in the suit is not
reduced to a paper decree. The need for protection is not
speculative. The KIADB entered appearance on 25.01.2025, yet
disbursed the compensation to defendant No.16 on 27.02.2025
without placing the development before the trial Court. The
petitioner received the monetary substitution of property
purchased under a sale deed executed during the injunction.
Unless the fund is restored, the prohibited transaction
permanently achieves what the restraint was designed to
prevent. It is submitted that Section 151 of the CPC exists for
this procedural necessity. The trial Court has restored the
efficacy of its own process without prejudicing the merits.
Article 227 of the Constitution of India does not warrant
substituting another discretionary view where the order is
jurisdictionally competent, protective, and directed against an

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accomplished advantage arising during the lis. Learned counsel
appearing for the respondent submits that the order assailed in
the writ petition does no more than ensure that the status quo
inter partes is maintained during the trial. Also, the order on I.
A. No.53 does no more than hold the substituted res as
Custodia Legis , and if necessary, the Court would thereafter, in
its powers, refer the said amount to the Designated Authority
under the provisions of Section 64 of the RFTCLARR Act for
enhancement and apportionment. Otherwise, such money
would rot in the number books of the petitioner, and instead of
assuaging contempt, if the petitioner' s plea is accepted, it
would lead to a situation that encourages violations of judicial
orders and perpetrators of contempt go scot-free. The order
under challenge preserves every defense but prevents the
petitioner from converting a transaction made during a
subsisting injunction into an irreversible fait accompli. The writ
petition therefore deserves to be dismissed with exemplary
costs.
17. In response to that, learned counsel for the petitioner
submits that the reliance placed by the respondent No.1 in Lala

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Durga Prasad’s case referred supra, the litigation is clearly
distinguishable and inapplicable. The decision proceeded on a
materially different factual foundation, in which a sale deed had
already been executed and the rights arising from that
conveyance were under consideration. Hence, it is not
applicable to the facts of this case. Then coming to Soni Lalji
Jetha’s case referred supra, it is submitted that the decision
concerns mortgaged property, adverse possession, and the
effect of a sale by the mortgagor/mortgagee, and does not deal
with the rights of a bona fide transferee for valuable
consideration without notice. The decision is therefore not
applicable. Then coming to Bai Dosabai’s case referred supra,
the decision concerns land leased for a specific period and the
rights arising from such leasehold arrangements, and it has no
application to the present case. Then coming to Vannarakkal
Kallalathil Sreedharan 's case, the decision supports the
petitioner's case. The Hon’ble Supreme Court expressly
recognizes that a contract of sale does not create an interest in
immovable property and that the equitable protection
recognized therein is against a transferee with notice. Then

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coming to Jagadish Singh 's case referred supra, it is
submitted that the decision, in fact, supports the petitioner
rather than the respondent. It recognizes the necessity of an
appropriate claim and an amendment when the plaintiff seeks
compensation or alternative relief in a suit for specific
performance. In the present case, no such relief is sought, and
no amendment is sought. Hence, it supports the petitioner's
case. Coming to Sukhbir Singh’s case, it is submitted that the
decision is distinguishable on fundamental factual and
procedural grounds. There, the issue of acquisition arose in the
first appeal after a decree for specific performance had already
been entered, and the plaintiff's right had therefore crystallized.
In the present case, there is no decree for specific
performance; the alleged Agreement of Sale itself remains
unadjudicated. Hence, that is not applicable. Then coming to
25
the case of Narasamma Vs. KIADB and Others , it is
submitted that it concerns Sections 18 and 30 of the Land
Acquisition Act and the determination/deposit of compensation
in acquisition proceedings, not the entitlement of an agreement
holder to acquisition compensation in a pending suit for specific

25
ILR 2002 KAR 4462

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performance. Hence, it is also not applicable. Then coming to
the case of J.K. Shantilal Vs. Special Land Acquisition
26
Officer and Others , the decision arises in the context of
Section 30 of the Land Acquisition Act and of proceedings
before the Land Acquisition Officer, and is therefore
distinguishable on its facts and statutory basis. It is submitted
that the impugned order needs to be set aside and that the writ
petition is liable to be allowed.
20. Having heard the learned Senior counsel representing
the learned counsel for the petitioner and learned counsel for
the respondent No.1, perused the material on record. In the
light of the respective submissions made on behalf of both
parties, the controversy requires examination of the effect of
the sale made during the subsistence of the injunction, the
consequences of acquisition on the pending suit, the
significance or absence of a prayer for compensation, and the
extent of the trial Court's power to preserve the amount
received by the subsequent purchaser. The most significant
circumstance is that the Sale Deed was executed on

26
WP.No.30683/2009 (LA-KIADB)

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26.03.2022, when an express injunction restraining alienation
was in force. This is not a case where the vendor merely
transferred the property during the pendency of the suit
without any restraint operating against him. The Court had
specifically prohibited alienation, and that prohibition had been
confirmed nearly five years before the sale. An injunction is an
exercise of judicial authority intended to preserve the subject
matter of litigation. Its object is to ensure that the rights
ultimately determined by the Court are not defeated by acts
undertaken during the pendency of proceedings. A party bound
by such an order cannot disregard it and thereafter contend
that the Court must accept the consequences of the prohibited
transaction as an accomplished fact. Section 52 of the Transfer
of Property Act embodies the doctrine of lis pendens . Its effect
is not to render every transfer during the pendency of litigation
void, but to subordinate the rights of the transfer to the rights
eventually established under the decree. The purchaser cannot
acquire a better position than the vendor in relation to the
pending litigation.

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21. In Vannarakkal Kallalathil Sreedharan 's case
referred supra, the Supreme Court recognized that an
Agreement of Sale, although not itself transferring ownership,
creates an obligation attached to the ownership of the property
that is enforceable against persons who subsequently acquire
an interest in it. The decision arose in the context of
attachment and an antecedent Agreement of Sale. Its
relevance lies in recognizing the distinction between ownership
of immovable property and the obligation arising from an
enforceable contract of sale. The Hon'ble Apex Court in Surjit
Singh 's case construed an assignment made in defiance of an
order restraining alienation. The Court declined to recognize the
assignment to permit the assignees to enter the pending
proceedings and defeat the restraint. The principle underlying
the decision is that judicial orders cannot be rendered
ineffective by permitting parties to obtain procedural or
substantive advantage from transactions undertaken in defense
of those orders. In Jehal Tanti 's case referred supra, the
Hon’ble Supreme Court considered a Sale Deed executed
during the operation of an injunction restraining alienation. The

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Court emphasized the significance of the subsisting order and
held that the subsequent transfer could not be examined as
though the judicial restraint did not exist. The Court also
considered the legal consequences of a transaction undertaken
in contravention of such orders. The position was further
explained in Balwantbhai Somabhai Bhandari 's case
referred supra. The Apex Court recognized that in proceedings
concerning willful disobedience of judicial orders or
undertakings, the Court may issue appropriate directions to
prevent a person from retaining the benefit of conduct
undertaken in defense of its authority. Such directions may
extend to neutralizing the advantage obtained through the
prohibited order. These decisions establish an important
principle, but their application requires care.
22. A transfer made during the subsistence of an
injunction does not become void for every purpose merely
because the order has been violated. The nature of the
restraint, the conduct of the parties, and the remedy sought
must be examined. Nevertheless, the transaction cannot be
permitted to defeat the effectiveness of the pending

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proceedings or to place a transferee in a better position than
the person from whom the property was purchased. In the
present case, the purchaser acquired the property while a
specific order restraining alienation was in force. The
purchaser's rights were consequently subject to the outcome of
the suit. Whether the petitioner acknowledged the injunction
and whether the violation warrants action under Order 39 and
Rule 2(a) of the CPC are separate matters. Those questions
need not be finally decided in the present proceeding. The fact
remains that the sale was effected during the operation of a
judicial restraint, and the Court must consider those
circumstances while examining the application for protection.
23. The next question concerns the effect of acquisition
on the relief sought in the suit. The petitioner's submission that
the property cannot now be conveyed requires consideration in
the light of the applicable acquisition law. Upon lawful vesting
of the property in the acquiring authority, the vendor ordinarily
ceases to possess the interest necessary to execute a
conveyance in favor of the plaintiff. A decree compelling
conveyance of property already vested in the acquiring

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authority cannot ordinarily be implemented. To that extent, the
acquisition may render the original relief or specific
performance incapable of execution. However, the question
whether the original relief has become impossible must be
distinguished from the question whether the entire suit
becomes non-maintainable. The suit was instituted when the
plaintiff asserted an enforceable contractual right against the
vendor. A subsequent statutory acquisition does not
retrospectively invalidate its institution. Its effect is on the
relief which the Court may ultimately grant. Section 21 of the
Specific Relief Act contemplates the award of compensation for
breach of contract where the requirements of that provision are
satisfied. Thus, the explanation to the Section expressly
recognizes that the circumstances of the contract becoming
incapable of specific performance do not preclude the exercise
of jurisdiction to award compensation.
24. In Jagadish Singh's case referred supra, the
Hon’ble Supreme Court considered the consequences of
acquiring property during the pendency of proceedings for
specific performance. It held that where the contract becomes

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incapable of performance for no fault of the plaintiff,
compensation in substitution for specific performance may be
awarded under Section 21 of the Specific Relief Act. The Court
also recognized that the compensation determined in
acquisition proceedings may furnish an appropriate measure for
assessing the monetary relief. In Urmila Devi 's case referred
supra, the plaintiff had already obtained a decree for specific
performance, which had been affirmed on appeal. During the
pendency of further proceedings, the property was acquired.
The Supreme Court held that the plaintiff should not be
deprived of appropriate relief merely because the acquisition
had made actual conveyance impossible. The compensation
awarded in the acquisition proceedings was considered when
determining the monetary relief to which the plaintiff was
entitled. In Sukhbir Singh 's case referred supra, the Hon’ble
Supreme Court again dealt with acquisition of property that
formed the subject matter of a decree for specific performance.
There were concurrent findings regarding the execution of the
agreement, payment of substantial consideration, and the
plaintiff’s readiness and willingness. In those circumstances,

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the Court upheld substituting the relief of specific performance
with an award of acquisition compensation, subject to
appropriate deductions. The significance of these decisions lies
not merely in the fact that acquisition compensation was
awarded. In each case, the plaintiff's entitlement under the
Agreement of Sale was judicially established. Acquisition
intervened in the enforcement of a right the Court had already
found to exist. The monetary relief was granted to prevent the
plaintiff from losing the benefit of that adjudication because
performance had become impossible. The present case stands
on a different footing. The suit for specific performance remains
pending. There is no finding that the agreement is enforceable,
that the plaintiff has complied with the statutory requirement
for specific performance, or that the plaintiff is entitled to a
decree. These matters must be established at trial. The
decision in Jagdish Singh ’s case, Urmila Devi ’s case and
Sukhbir Singh ’s case, cannot therefore be applied as if the
plaintiff has already acquired an adjudicated right to receive the
acquisition compensation. The decisions nevertheless answered
the petitioner's contention that acquisition necessarily ends

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every remedy arising from the agreement. The plaintiff may be
unable to obtain actual conveyance after vesting, but the law
recognizes the possibility of compensation when the necessary
contractual and statutory conditions are met.
25. The petitioner has specifically pointed out that the
plaintiff has not amended the plaint to seek compensation
under Section 21 of the Specific Relief Act. This objection
cannot be brushed aside as a mere technicality. Sub-section (5)
of Section 21 of the Specific Relief Act provides that
compensation shall not be awarded unless it has been claimed
in the plaint. That proviso enables the Court to prevent
amendment of the plaint at any stage of the proceedings,
including such a claim, on such terms as may be just. The
distinction between the statutory power to permit amendment
and the power to award compensation is important. The Court
may allow the plaintiff to introduce a claim for compensation in
accordance with law. However, until such a claim forms part of
the pleading, the Court cannot proceed on the assumption that
compensation has already been sought or that the plaintiff is
entitled to receive it. In Jagdish Singh 's case referred supra,

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the Hon’ble Supreme Court expressly considered the
requirement under Section 21 of the Specific Relief Act and
permitted the amendment of the claim for compensation. The
decision does not dispense with the statutory requirement to
claim compensation. Rather, it recognizes the provision’s
remedial character and the need to give effect to it where
appropriate. In Life Insurance Corporation Of India Vs.
27
Sanjeev Builders Private Limited , the Hon’ble Supreme
Court considered the scope of amendment in a suit for specific
performance and the provisions governing compensation. The
statutory requirement to plead compensation remains material,
even though the law provides for amendment.
26. The Co-ordinate Bench of this Court in Pillamma’s
case referred supra, drew a distinction between claiming
compensation under Section 21 of the Specific Relief Act and
claiming the entire benefit of acquisition proceedings as though
the agreement holder were the owner of the property. The
Court held that a person seeking specific performance may
upon establishing the necessary entitlement claim

27
(2022) 16 SCC 1

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compensation under Section 21 the Specific Relief Act, where
acquisition prevents performance, but cannot claim the entire
acquisition compensation merely on the strength of the
Agreement of Sale. The principle is directly relevant. An
Agreement of Sale does not by itself transfer ownership of
immovable property. Section 54 of the Transfer of Property Act
expressly provides that a contract for sale does not of itself
create any interest in or change on the property. The plaintiff's
right is ordinarily a contractual right to seek performance
enforceable against the vendor and in circumstances
contemplated by law, against the subsequent transferee. The
acquisition compensation received by the petitioner arises
under the relevant acquisition statute. The compensation
payable for breach of the agreement under Section 21 of the
Specific Relief Act arises from a different legal foundation. The
two cannot be equated merely because they concern the same
property. The acquisition amount may be relevant to return the
same property. Therefore, on the present pleading, the plaintiff
cannot demand payment of the acquisition compensation as a
substantive relief. The absence of a prayer under Section 21 of

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the Specific Relief Act is material. At the same time, the Court
cannot hold at this interlocutory stage, the plaintiff is forever
precluded from pursuing compensation, particularly when the
statute expressly permits amendment at any stage of the
proceeding. The petitioner also relies upon the circumstance
that the plaintiff approached this Court by filing a writ petition
concerning the acquisition proceeding, but did not obtain an
interim order. The filing of a writ petition does not by itself stay
statutory proceedings. Where no interim restraint is granted,
the acquiring authority is not prevented merely by the
pendency of the writ petition from proceeding in accordance
with the statute. However, the absence of an interim order in
the writ proceeding does not determine the contractual rights
arising from the Agreement of Sale. It does not retrospectively
validate the Sale Deed executed in the face of the injunction
granted by the Civil Court.
27. The decision in Narasamma 's case referred supra
concerns claims made by the agreement holders in the context
of acquisition proceedings and the statutory mechanism for
adjudicating dispute regarding compensation. They

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demonstrate that the nature of the claim and the procedure
under the applicable acquisition statutes are material. In J.K.
Shantilal 's case referred supra , the Court also distinguished
the absence of an interim restraint against disbursement from
the adjudication of completing claims to compensation.
Similarly, in Rudramma 's case referred supra , this Court
considered the jurisdiction of the Civil Court to interfere with
acquisition proceedings and disbursement of compensation. The
judgment emphasizes that the legality of acquisition must be
questioned through remedies available under the acquisition
law and cannot ordinarily be determined through an
independent civil suit. The present proceeding, however, do not
involve a direction to the acquiring authority to stop acquisition
or reconsider its award. The compensation has already been
disbursed. The application is directed against the subsequent
purchaser who is not a party to the pending suit and seeks
preservation of the amount assailed by him. Whether such
protection is permissible must therefore be considered in the
context of the pending contractual dispute and the

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circumstances of the prohibited alienation without reopening
the statutory acquisition proceeding.
28. The last question that falls for consideration is
whether the trial court is justified in directing deposit of the
compensation amount when the plaintiff has not an established
entitlement to specific performance and has not sought
compensation under Section 21 of the Specific Relief Act. The
power to grant interim relief is intended to preserve the
effectiveness of the final adjudication. It is not a power to grant
substantial relief in advance of trial. An interim order must
have a legally recognizable connection with the right asserted
and the relief which the Court may ultimately grant. When the
plaintiff has not even sought a monitory decree, the Court must
exercise particular caution before directing a defendant to
deposit substantial sums of money. Section 151 of the CPC
cannot be employed to circumvent the requirements governing
security before judgment or to confer upon a plaintiff a
monetary interest which has not been established. In Raman
28
Tech. & Process Engg. Co. & Anr vs Solanki Traders , the

28
(2008) 2 SCC 302

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Hon’ble Supreme Court emphasized that an order securing a
possible future money decree cannot be made merely because
the plaintiff asserts a claim. The extraordinary power of
attachment before judgment requires satisfaction of the
statutory conditions and cannot be used to convert an
unsecured claim into a secured one. Although the present
application concerns the preservation of compensation rather
than the attachment of ordinary assets, the principle of
restraint in imposing pre-judgment security remains relevant. It
is therefore necessary to identify what distinguishes this case
from an ordinary application seeking security for an
unadjudicated monetary claim.
29. The distinguishing circumstances are the subsisting
injunction restraining alienation. The Court had specifically
directed that the property shall not be alienated.
Notwithstanding that order, the Sale Deed was executed. The
property was subsequently acquired, and the purchaser
received compensation. The property the Court intended to
preserve is no longer available. In such circumstances, the trial
Court was entitled to examine whether any protective

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arrangement was necessary to prevent the pending
adjudication from being rendered ineffective. The Court's
concern is not merely that the plaintiff may eventually claim
money; it is that the property was transferred despite an
express judicial restraint and that the proceeds arising from its
subsequent acquisition have passed into the hands of the
purchaser. In Delhi Development Authority 's case referred
supra, the Hon’ble Supreme Court recognizes the power of
Courts to prevent persons from retaining advantages obtained
through conduct that defeats judicial orders. The decision
reflects the principle that Courts possess appropriate remedial
powers to protect the effectiveness and integrity of their
proceedings. That principle does not mean that the plaintiff
automatically becomes the owner of the acquisition
compensation, nor does it establish that the purchaser must
necessarily deposit the entire amount in every case. The
legality and proportionality of the particular protective direction
must still be examined. There is an important difference
between ordering payment of compensation to the plaintiff and
directing its preservation pending adjudication. The former

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determines entitlement. The latter may serve to prevent an
identifiable fund from being dissipated before the Court and to
decide whether any monetary relief is available. The deposit
does not by itself extinguish the petitioner's claim to the
amount or create ownership in favor of the plaintiff.
30. In the present case, the absence of a compensation
prayer requires that the operation of the impugned order be
restricted. The plaintiff cannot indefinitely secure the entire
acquisition compensation without pursuing the substantive
relief for which such security may be necessary. The Court
must also consider whether the amount directed to be
deposited bears a reasonable relationship to the claim that can
be established and whether adequate protection can be
provided through alternative security. The purchaser's reliance
on the acquisition and the disbursement of compensation
cannot be accepted as a complete answer to the application,
because it leaves unanswered the legal consequences of the
prohibited alienation. Equally, the plaintiff cannot rely solely on
the injunction to claim an immediate right to the entire
compensation. Both considerations must inform the exercise of

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the Court's discretion. The appropriate course is therefore to
preserve the existing protection for a limited period while
requiring the trial Court to reassess its necessity and extend it
with reference to the actual pleadings and the remedies
available in law. Such an arrangement neither rewards a
transaction made in the face of an injunction nor prejudges the
plaintiff's entitlement to compensation. The continuation of
security must be assessed in the context of a legally
maintainable substantive claim. Accordingly, this Court is
passing the following:
ORDER


i. The impugned direction to deposit the
compensation shall serve as an interim
protective measure and shall not be
construed as a determination of the
plaintiff's entitlement for compensation.


ii. The trial court shall, within 8 weeks from the
date of receipt of the copy of this order,
reconsider the extent and continuity of
securing the compensation amount after
hearing the parties. In doing so, it shall take

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into account the absence of a compensation
prayer, any steps taken by the plaintiff
under Section 21 of the Specific Relief Act,
the amount of the potential monetary claim,
and the availability of adequate alternative
security.



iii. Until such re-consideration, if any amount is
already deposited, it shall be kept in a fixed
deposit in a Nationalised Bank till the Court
decides the application.


iv. The trial Court shall be at liberty to maintain,
vary or vacate the security upon recording
reasons without treating the present order
as requiring continued deposit of the entire
acquisition compensation.



v. The trial Court shall proceed with the suit
expeditiously, decide the issues concerning
the enforceability of the agreement, the
consequences of the acquisition, and the
entitlement of the parties to any relief,
independently and in accordance with law.


vi. This Court has not expressed anything on
the merits of the matter, and all the issues
are kept open to be decided by the Court.

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vii. Accordingly, the writ petition is disposed of.


viii. All I.As. in this petition shall stand closed.

SD/-
(LALITHA KANNEGANTI)
JUDGE


MEG
List No.: 1 Sl No.: 10
*MR