After taking Sugriv Kila temple land without paying, UP government ordered to deposit ₹1.21 crore with 8% interest pending title suit

The petitioner-temple claimed ownership of land situated at Sugriv Kila, Ayodhya, recorded in the name of the deity through successive revenue settlements.

For development-related works connected with the Ram Janmabhoomi Temple, the State authorities agreed to purchase 1,512 square metres from Khata No. 44/2, Khasra No. 246, belonging to the petitioner.

Following an MOU and determination of the land and construction value, the parties executed and registered a sale deed on 22 December 2023 for a total consideration of ₹1,38,44,559, comprising ₹1,20,96,000 towards the land and ₹17,48,559 towards construction.

The petitioner handed over possession on the same day on the assurance that payment would be made through RTGS within 15 days.

Although the construction component was subsequently paid, the land consideration remained unpaid.

The State disputed its liability, contending that the property was Nazul/government land and that the Sarvarahkar lacked authority to sell it. It also instituted Civil Suit No. 680 of 2024 seeking cancellation of the sale deed, which was pending before the competent Civil Court.

Whether the State authorities could withhold the agreed land consideration after executing the registered sale deed and taking possession, on the ground that the property was Nazul or government land and that title was disputed?

Whether the High Court, exercising jurisdiction under Article 226, could finally adjudicate the disputed title and validity of the sale deed when the issue was already pending before the Civil Court?

Whether, pending adjudication of title, the State should be directed to secure the unpaid sale consideration with interest?

The Court applied Article 226 of the Constitution, while recognising that disputed questions of title requiring evidence and a full trial ordinarily should not be finally adjudicated in writ proceedings.

It relied on Section 54 of the Transfer of Property Act, 1882, as interpreted in Dahiben v. Arvindbhai Kalyanji Bhanusali (Gajra), Dead through Legal Representatives & Others, (2020) 7 SCC 366, and Raziya Begum & Others v. Nafisa Begum Abdul Hamid, 2026 SCC OnLine SC 1511; 2026 INSC 814: non-payment of the entire sale consideration does not, by itself, invalidate a registered sale where title has passed; the unpaid balance may ordinarily be recovered as a debt, rather than through cancellation of the sale deed.

The Court also invoked the public-law requirement that State authorities act fairly, reasonably and in accordance with legitimate administrative standards, particularly when acquiring or purchasing property from citizens.

The Court found that the registered sale deed expressly recorded the transaction and that ₹1,20,96,000 towards the land remained unpaid, while the State had taken and retained possession.

The State’s simultaneous assertion that it did not recognise the petitioner’s title and its continued possession under the sale deed were considered inconsistent.

However, because the State’s claim that the land was Nazul/government property raised a substantial title dispute already pending before the Civil Court, the High Court declined to determine ownership or finally rule on cancellation of the sale deed in writ jurisdiction.

Applying the principle that non-payment of consideration does not automatically nullify a registered sale, and taking into account the State’s conduct in obtaining possession while deferring payment, the Court considered it appropriate to protect the petitioner’s monetary claim without prejudging title.

It therefore directed deposit of the unpaid consideration with interest in an interest-bearing fixed deposit, leaving its ultimate release subject to the Civil Court’s determination.

It directed the State respondents to deposit ₹1,20,96,000, together with interest at 8% per annum calculated from the expiry of 15 days after execution of the sale deed dated 22 December 2023, in an interest-bearing fixed deposit of a nationalised bank in the name of the Court of the Additional Chief Judge-II (Junior Division), within four weeks.

The Civil Court was left to decide whether the deposited amount, or any part of it and the accrued interest, should be released to the petitioner or retained subject to the outcome of the pending suit.

All questions concerning title and other legal issues were left open, and the trial court was requested to endeavour to conclude the civil suit preferably within one year.

The writ petition was accordingly disposed of.