A registered sale deed entitles the purchaser to possession unless contractual reconveyance conditions are fulfilled.

The Respondent/Plaintiff purchased the entire second floor of Property No. 27, Block-B, Tagore Road, Adarsh Nagar, Delhi, from the Appellants through a registered Sale Deed dated 25 January 2019, registered on 29 January 2019, for a consideration of ₹48,51,000/-

The Appellants allegedly requested permission to remain in possession temporarily and undertook to vacate by 25 February 2019, but failed to do so

The Respondent thereafter instituted a suit for possession, mesne profits/damages at ₹40,000/- per month, and permanent injunction

The Appellants denied an outright sale and contended that the Sale Deed had been executed merely as security for a loan.

They relied on an alleged Mutual Agreement under which the loan was to be repaid by 31 December 2021, upon which the property would be re-conveyed to them

The Trial Court decreed possession, mesne profits at ₹40,000/- per month with interest at 18% per annum, and permanent injunction in favour of the Respondent

In appeal under Section 96 read with Order XLI and Section 151 CPC, the Appellants challenged, inter alia, the failure to frame a specific issue regarding the Mutual Agreement, the rejection of their security-transaction defence, and the non-consolidation of the suit with their later suit seeking cancellation of the Sale Deed

1. Whether the Trial Court erred in failing to frame a specific issue regarding the alleged Mutual Agreement and the Appellants’ plea that the Sale Deed was executed only as security for a loan?

2. Whether the registered Sale Deed dated 25 January 2019 conferred ownership upon the Respondent, notwithstanding the Appellants’ alleged loan arrangement and Mutual Agreement?

3. Whether the Appellants were entitled to continue in possession or avoid the effect of the Sale Deed without repaying the alleged loan in accordance with the Mutual Agreement?

4. Whether the pendency of the Appellants’ subsequent suit seeking declaration and cancellation of the Sale Deed required the possession suit to be stayed, consolidated, or otherwise dismissed?

5. Whether the Respondent was entitled to possession, mesne profits/damages, and permanent injunction?

The Court applied Section 96 read with Order XLI and Section 151 of the Code of Civil Procedure, 1908, governing a regular first appeal

Order XIV Rule 1 CPC requires the framing of issues arising from material propositions of fact or law, but the Court assessed whether the alleged omission caused any prejudice in the circumstances of the case

A duly executed and registered Sale Deed, proved through official registration records and admitted by the executants, constitutes the basis of the purchaser’s asserted title unless successfully avoided or cancelled.

The Court further applied the principle that a party relying upon a collateral or conditional arrangement must comply with its terms before claiming re-conveyance or a continuing right to possession; the alleged Mutual Agreement itself made re-conveyance conditional upon repayment of the entire loan by the stipulated date

Continued possession after the permitted period, without a subsisting legal right, entitles the owner to seek possession and mesne profits, along with injunctive relief against creation of third-party rights

The Court found that the Sale Deed was duly proved through the Sub-Registrar’s official record and that the Appellants themselves admitted that they had gone to the registration office for execution of a Sale Deed, received the stated consideration, and were not subjected to force or pressure

The Respondent’s ownership was further supported by mutation, payment of house tax, and transfer of the electricity connection into her name

Even assuming that the Mutual Agreement was admissible and represented the parties’ arrangement, its terms required repayment of the loan with interest by the stipulated date before any re-conveyance could be claimed

Since the Appellants admittedly had not repaid the entire amount, they could not rely on the Agreement to retain possession or invalidate the Sale Deed.

The disparity between the sale consideration and the alleged loan amount did not, by itself, establish that the Sale Deed was merely a security instrument

The WhatsApp communications, even if considered, only supported the existence of interest-related payments and did not nullify the registered Sale Deed

The subsequent cancellation suit did not affect the Respondent’s present claim founded on the subsisting registered Sale Deed, and the Appellants remained free to pursue that suit in accordance with law

The alleged Mutual Agreement did not assist the Appellants because they had failed to repay the loan in accordance with its terms and therefore had no enforceable right to re-conveyance or continued possession

The decree for possession, mesne profits at ₹40,000/- per month with interest at 18% per annum, and permanent injunction restraining the Appellants from creating third-party rights was upheld.

The pending applications were also disposed of