Selling property despite a status-quo order: Punjab and Haryana High Court holds owner and company guilty of contempt, reserves sentence

The litigation arose from Civil Suit No. 308 of 1990, instituted by Dev Bhushan Gupta seeking declaration and permanent injunction concerning the suit property.

Gupta claimed that he had acquired title through registered sale deeds dated 30 January 1989 and denied executing a General Power of Attorney dated 5 July 1990 in favour of Devender Kumar Vashisht.

The Trial Court decreed the suit on 7 January 2013, holding that the GPA and transactions founded upon it were ineffective against the plaintiffs.

The First Appellate Court reversed that decree on 18 September 2019, accepted the GPA as genuine, upheld the sale transactions, and dismissed the suit.

During pendency of the appeals, this Court directed maintenance of status quo regarding the suit property on 4 December 2019.

Further, Sat Narayan Bansal executed two sale deeds in favour of Sunil Saini on 30 August 2024, and Sunil Saini executed a further sale deed in favour of Rajinder Sharma on 5 November 2024.

Whether the GPA dated 5 July 1990 was genuinely executed by Dev Bhushan Gupta and validly authorised the five sale deeds dated 28 July 1990?

Whether the First Appellate Court’s finding upholding the GPA and the consequential sale deeds was perverse or otherwise amenable to interference under Section 100 CPC?

Whether the subsequent transferees were entitled to impleadment under Order I Rule 10 and/or Order XXII Rule 10 CPC?

Whether the subsequent transactions, including the sale deed dated 13 May 2004 in favour of Kaptan Singh and the 2024 transactions in favour of Sunil Saini, could confer title superior to that of the respective transferors?

Whether Dev Bhushan Gupta and Suraj Pal could withdraw their appeals on the basis of subsequent compromises where third-party interests had intervened during the litigation?

Whether Sat Narayan Bansal, Karishma Floricultures, Sunil Saini, or the Sub-Registrar, Sohna, committed civil contempt by reason of the 2024 transactions or the refusal to cancel the registered sale deeds?

The Court applied Section 100 CPC, under which interference in a Regular Second Appeal is limited to a substantial question of law; a concurrent or appellate finding of fact may be disturbed where it is perverse, legally erroneous, based on irrelevant considerations, or incapable of reasonable support.

Allegations of fraud and forgery in civil proceedings are determined on the preponderance of probabilities, not beyond reasonable doubt, as reaffirmed in Rattan Singh v. Nirmal Gill, 2021 (15) SCC 300.

Handwriting-expert evidence is opinion evidence and is not conclusive; the Court must assess the reasoning of the experts with the entire evidentiary record, consistent with Murari Lal v. State of Madhya Pradesh, (1980) 1 SCC 704.

Under Section 52 of the Transfer of Property Act, 1882, a pendente lite transfer is not void ab initio but remains subject to the result of the litigation, as explained in Thomson Press (India) Ltd. v. Nanak Builders & Investors (P) Ltd., (2013) 5 SCC 397, and T. Ravi v. B. Chinna Narasimha, (2017) 7 SCC 342.

Impleadment of transferees pendente lite may be permitted where their interests are substantial and directly affected, applying Order I Rule 10 and Order XXII Rule 10 CPC, as clarified in Thomson Press and H. Anjanappa v. A. Prabhakar, 2025 INSC 121.

Withdrawal of an appeal may ordinarily be sought under Order XXIII Rule 1 CPC, but it may be refused where withdrawal would prejudice substantial rights of impleaded transferees, consistent with Anurag Mittal v. Shaily Mishra Mittal, (2018) 9 SCC 691 and R. Rathinavel Chettiar v. V. Sivaraman, (1999) 4 SCC 89.

Civil contempt under Section 2(b) of the Contempt of Courts Act, 1971 requires conscious and wilful disobedience of a binding court order; mere inadvertence, intention, or bona fide inability is insufficient, as stated in Niaz Mohammad v. State of Haryana, (1994) 6 SCC 332.

The Court held that the First Appellate Court’s ultimate conclusion regarding the GPA was not perverse, although its reliance on the criminal standard of proof for allegations of forgery was legally incorrect.

On the correct civil standard, the Court assessed the evidence cumulatively.

The plaintiff’s telegrams, prompt institution of the suit, consistent denial, and the disputed signature Q6/D1 created suspicion, but did not establish complete non-execution of the GPA.

Conversely, the admitted receipt of ₹3,50,000, the existence of real negotiations, several signatures found genuine by the defendants’ handwriting expert, registration of the GPA, the testimony of the attesting witness, and the custody of the original title deed materially supported the defendants’ version.

The possibility that Q6/D1 was inserted or altered did not prove that the entire GPA was fabricated.

The Court therefore found execution of the GPA more probable than the plaintiff’s case of total non-execution.

Because the GPA was valid, the five sale deeds dated 28 July 1990 were executed within the attorney’s authority and could not be invalidated on that ground.

The later sale deed executed by Dev Bhushan Gupta in favour of Kaptan Singh on 13 May 2004 could not convey property already transferred through the valid 1990 chain; consequently, purchasers claiming through Kaptan Singh could obtain no better title than their transferor.

Subsequent transferees were impleaded because their claimed interests could be directly affected, but impleadment did not recognise or enlarge their substantive title.

The Court declined to permit withdrawal of the appeals because the original parties had altered their interests through subsequent arrangements while substantial interests had devolved upon impleaded transferees.

Sat Narayan Bansal knowingly executed the 2024 sale deeds concerning substantial portions of the property despite the subsisting status quo order.

Karishma Floricultures likewise deliberately surrendered its leasehold interest in the same transaction.

However, no completed act of disobedience was proved against Sunil Saini, and the Sub-Registrar had no specific obligation under the order to cancel registered sale deeds.

It held that the GPA dated 5 July 1990, its registration on 26 July 1990, and the five sale deeds dated 28 July 1990 were valid, subject to the extent of property covered by each conveyance.

The chain arising from the 13 May 2004 sale deed in favour of Kaptan Singh could not confer title to property already covered by the valid 1990 transactions.

The subsequent transferees were impleaded, but their rights remained derivative and subject to Section 52 of the Transfer of Property Act and the judgment.

The 2024 sale deeds executed by Sat Narayan Bansal in favour of Sunil Saini, and the subsequent sale deed in favour of Rajinder Sharma, were held incapable of defeating or prejudicing the rights of Bimla Jain and Anil Jain under the compromise decree dated 14 September 2019.

Sat Narayan Bansal and Karishma Floricultures were held guilty of wilful and deliberate civil contempt for violating the status quo order dated 4 December 2019.

Sunil Saini and the Sub-Registrar, Sohna, were not held guilty.

The question of sentence for Sat Narayan Bansal and Karishma Floricultures was deferred, and the contempt proceedings were directed to be listed for hearing on sentence on 17 September 2026.