Bombay HC Sets Aside Injunction For 1990s Land-Sale Claimants Over Stamp Defects And 25-Year Delay, But Stays Effect For Four Weeks

The plaintiffs in two suits claimed that Pandharinath Namdev Pavshe had agreed in 1990 and 1991 to sell them separate properties, received the full consideration and delivered possession, as evidenced by agreements and possession receipts.

They sought specific performance and injunction in suits filed in 2018.

The trial Court rejected their applications for temporary injunction; the District Court reversed those orders and restrained the defendants from disturbing the plaintiffs’ possession.

The defendants, Pavshe’s legal heirs, challenged the appellate orders under Article 227 of the Constitution.

Under Wander Ltd. v. Antox India P. Ltd., an appellate court should not substitute its discretion for that of the trial court unless the latter acted arbitrarily, capriciously or perversely, or ignored settled principles; mere possibility of a different view is insufficient.

Seema Arshad Zaheer v. Municipal Corporation of Greater Mumbai explains that intervention is warranted where discretion rests on no relevant material or ignores relevant material.

Skyline Education Institute (India) Pvt. Ltd. v. S.L. Vaswani and Ramakant Ambalal Choksi v. Harish Ambalal Choksi reinforce the restraint owed to a reasoned discretionary order.

Under Explanation I to Article 25 of Schedule I of the Maharashtra Stamp Act, an agreement to sell that provides for transfer of possession may be treated as a conveyance for stamp-duty purposes.

Section 34 of that Act bars an insufficiently stamped instrument from being admitted in evidence for any purpose until duly stamped; the proviso to Section 49 of the Registration Act does not displace that bar.

The Court also noted the pre-amendment requirement under Section 34 of the Maharashtra Stamp Act that the stamp paper be purchased in the name of an executor.

The District Court relied on revenue entries that had been set aside, and which were not based on registered instruments; those entries therefore could not support its finding of possession.

The agreements appeared prima facie insufficiently stamped because they provided for possession and full payment, and so could not be relied on even for a collateral purpose unless duly stamped.

The stamp papers also appeared not to have been purchased by a party to the instruments.

The 2014 survey report’s assertion that Pandharinath was present was unreliable because he had died in 2012.

The substantial delay in seeking specific performance and the plaintiff’s inconsistent assertions—including an adverse-possession claim and a later development-related arrangement with the defendants—further undermined the asserted possession and equitable case.

In these circumstances, the trial Court’s refusal of injunction was not perverse, and the District Court exceeded the limits of appellate interference.

It made the Rule absolute with no order as to costs.

The effect, execution and operation of the judgment were stayed for four weeks.