# Hamid & Ors v. Kailash & Ors

- **Citation:** (2025) 9 ILRA 817
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-09-15
- **Case number:** Writ C No. 26340 of 2025
- **Bench:** Manish Kumar Nigam
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/hamid-ors-v-kailash-ors-53777
- **Pages:** 18

## Headnote

Vivek Saran

ISSUE FOR CONSIDERATION
Whether a prospective vendee under an
agreement to sell, whose suits for specific
performance are pending, can claim a right of
apportionment in compensation under Section
76 of the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation
and Resettlement Act, 2013, on the basis of
such agreement.

HEADNOTE
Transfer of Property Act, 1882 - Section 54 -
Agreement to sell - No transfer of ownership -
No creation of interest or charge - Only a
personal right to seek specific performance -
Land later acquired - No Right to claim
apportionment of compensation - Right to Fair
Compensation
and
Transparency
in
Land
Acquisition, Rehabilitation and Resettlement Act,
2013 - Section 76 - Scope - Limited to
existing rights - No adjudication of rights
dependent on a pending suit - Mere pendency
of suit for specific performance and interim
injunction do not confer "interest" entitling
compensation
apportionment
Specific Relief Act, 1963 - Section 21 -
Compensation
in
substitution
of
specific
performance - Relief can be moulded only by
Civil Court in suit for specific performance - Not
within scope of proceedings under Section 76 of
2013 Act
HELD
Petitioners, on the basis of agreements to sell
executed prior to acquisition of land, sought
apportionment of compensation before the Land
Acquisition Rehabilitation and Resettlement
Authority. Their claim was rejected on the
ground
that
pending
suits
for
specific
performance did not confer any existing right or
title in the acquired land.Held:According to
818 INDIAN LAW REPORTS ALLAHABAD SERIES
Section 54 of Transfer of Property Act, an
agreement to sell does not create any interest
in the proposed vendee in the suit property
but only creates an enforceable right to the
parties. Contract for sale would not make the
intending purchaser/vendee to be owner even
in equity of estate so long as a sale deed is
not executed and registered. Mere execution
of a contract for sale by itself would not
create
any
right
or
interest
in
the
property.The scope of enquiry under Section
76 of the Act of 2013, is to decide the
apportionment on the basis of existing rights
of the parties and not upon the rights which
might accrue to the person in later point of
time such as after the decree in a suit for
specific
performance.Court
held
that
no
illegality was committed by the Authority, in
passing
the
order
impugned.petition
is
dismissed. (E-5)

CASE LAW CITED
Namdeo Maung Shwe Goh v. Maung Inn,
1917(1) Bom LR 179;
Sujan
Charan
Lenka
v.
Pramila
Mumari
Mohanty, AIR 1986 Ori 74;
Jagdish Singh v. Natthu Singh, (1992) 1 SCC
647;
Urmila Devi v. Deity, Mandir Shree Chamunda
Devi, (2018) 2 SCC 284;
Ramesh Chand v. Tanmay Developers Pvt. Ltd.,
(2017) 13 SCC 715;
Ram Chander Darak v. Ganeshdas Rathi, AIR
1984 SC 42.

List of Acts
Transfer
of
Property
Act,
1882;
Specific
Relief
Act,
1963;
Right to Fair Compensation and Transparency in
Land
Acquisition,
Rehabilitation
and
Resettlement Act, 2013.

List of Keywords
Section 54 TPA - Agreement to sell - No
interest
-
Specific
performance
-
Compensation - Section 76 RFCTLARR -
Apportionment - Persons interested - Pending
suits - Equitable estate not recognised.

CASE ARISING FROM
Order dated 05.07.2025 passed by Land
Acquisition Rehabilitation and Resettlement
Authority, Meerut in Reference Case No. 381 of

## Text

_Characters 0–39,971 of 62,459. This is a partial read: ask again with offset=39971 for what follows._

9 All. Hamid & Ors. Vs. Kailash & Ors.
817
clauses (a) to (f) of Rule 11 of Order 7
CPC. In other words, the plaint as
presented must proceed as a whole or can
be rejected as a whole but not in part..."
(emphasis supplied)

12. In view of the above referred
principle, we have no hesitation in holding
that the High Court committed an error in
rejecting the plaint in part with respect to
Schedule-A property and permitting the
Plaintiffs to prosecute the case only with
respect to Schedule-B property. This
approach while considering an application
under Order VII Rule 11, CPC is
impermissible. We, therefore, set aside the
judgment and order of the High Court even
on this ground."

25. So far as contention of counsel for
the petitioner that the Tribunal has
erroneously
relied
upon
Full
Bench
judgment of this Court in case of Saumitra
Devi Vs. Special Judge reported in 2006
(6) ADJ 134, I am not inclined to interfere
on this score as I have already held that
there was sufficient compliance of the
provisions of sub-Rule 3 of Rule 4 of
Rules, 1994.

26. In view of the discussions made
above, I am of the view that the Election
Tribunal/ District Judge has committed no
error in rejecting the application filed by
the petitioner under Order VII Rule 11 of
the C.P.C. The petition lacks merit and is
dismissed.
----------
(2025) 9 ILRA 817
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 15.09.2025

BEFORE

THE HON'BLE MANISH KUMAR NIGAM, J.
Writ C No. 26340 of 2025

Hamid & Ors. ...Petitioners
Versus
Kailash & Ors. ...Respondents

Counsel for the Petitioner:
Anas Mahboob, Ashish Kumar Singh

Counsel for the Respondents:
Vivek Saran

ISSUE FOR CONSIDERATION
Whether a prospective vendee under an
agreement to sell, whose suits for specific
performance are pending, can claim a right of
apportionment in compensation under Section
76 of the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation
and Resettlement Act, 2013, on the basis of
such agreement.

HEADNOTE
Transfer of Property Act, 1882 - Section 54 -
Agreement to sell - No transfer of ownership -
No creation of interest or charge - Only a
personal right to seek specific performance -
Land later acquired - No Right to claim
apportionment of compensation - Right to Fair
Compensation
and
Transparency
in
Land
Acquisition, Rehabilitation and Resettlement Act,
2013 - Section 76 - Scope - Limited to
existing rights - No adjudication of rights
dependent on a pending suit - Mere pendency
of suit for specific performance and interim
injunction do not confer "interest" entitling
compensation
apportionment
Specific Relief Act, 1963 - Section 21 -
Compensation
in
substitution
of
specific
performance - Relief can be moulded only by
Civil Court in suit for specific performance - Not
within scope of proceedings under Section 76 of
2013 Act
HELD
Petitioners, on the basis of agreements to sell
executed prior to acquisition of land, sought
apportionment of compensation before the Land
Acquisition Rehabilitation and Resettlement
Authority. Their claim was rejected on the
ground
that
pending
suits
for
specific
performance did not confer any existing right or
title in the acquired land.Held:According to
818 INDIAN LAW REPORTS ALLAHABAD SERIES
Section 54 of Transfer of Property Act, an
agreement to sell does not create any interest
in the proposed vendee in the suit property
but only creates an enforceable right to the
parties. Contract for sale would not make the
intending purchaser/vendee to be owner even
in equity of estate so long as a sale deed is
not executed and registered. Mere execution
of a contract for sale by itself would not
create
any
right
or
interest
in
the
property.The scope of enquiry under Section
76 of the Act of 2013, is to decide the
apportionment on the basis of existing rights
of the parties and not upon the rights which
might accrue to the person in later point of
time such as after the decree in a suit for
specific
performance.Court
held
that
no
illegality was committed by the Authority, in
passing
the
order
impugned.petition
is
dismissed. (E-5)

CASE LAW CITED
Namdeo Maung Shwe Goh v. Maung Inn,
1917(1) Bom LR 179;
Sujan
Charan
Lenka
v.
Pramila
Mumari
Mohanty, AIR 1986 Ori 74;
Jagdish Singh v. Natthu Singh, (1992) 1 SCC
647;
Urmila Devi v. Deity, Mandir Shree Chamunda
Devi, (2018) 2 SCC 284;
Ramesh Chand v. Tanmay Developers Pvt. Ltd.,
(2017) 13 SCC 715;
Ram Chander Darak v. Ganeshdas Rathi, AIR
1984 SC 42.

List of Acts
Transfer
of
Property
Act,
1882;
Specific
Relief
Act,
1963;
Right to Fair Compensation and Transparency in
Land
Acquisition,
Rehabilitation
and
Resettlement Act, 2013.

List of Keywords
Section 54 TPA - Agreement to sell - No
interest
-
Specific
performance
-
Compensation - Section 76 RFCTLARR -
Apportionment - Persons interested - Pending
suits - Equitable estate not recognised.

CASE ARISING FROM
Order dated 05.07.2025 passed by Land
Acquisition Rehabilitation and Resettlement
Authority, Meerut in Reference Case No. 381 of
2023.

Appearances for Parties
Advs For Petitioner: Anas Mahboob, Ashish
Kumar Singh
Advs For Respondents: C.S.C., Vivek Saran

(Delivered by Hon'ble Manish Kumar
Nigam, J.)

1. Heard Shri Ashish Kumar Singh
and Shri Anas Mahboob, learned counsel
for the petitioner, Shri Vivek Saran, learned
counsel for the respondent and perused the
record.

2. This petition has been filed
challenging the order dated 05.07.2025
passed by Land Acquisition Rehabilitation
and Resettlement Authority, Meerut in
reference Case No. 381 of 2023 (Kailash
and others v. Hamid and others).

3. Brief facts of the case are that
disputed land is Khasra No. 346 & 426,
situated at village Bijwali, Tehsil & District
Meerut. Agreement to sell were executed
by the recorded tenure holders in favour of
the petitioners regarding part of land of
Khasra No. 346 & 426 referred above.
When the sale deed was not executed in
pursuance of agreements, various suits
were filed for specific performance of an
agreement, details of which are as under:

(1) Original Suit No. 21 of 2017
was instituted by the petitioner nos. 2, 3 &
4 against respondent nos. 1, 2, 3, 4, 5, 6
and predecessor in interest of respondent
no. 9 for specific performance of an
agreement
to
sell
dated
29.01.2013
regarding the 14/8 portion of Khasra No.
426, area 0.487375 hec. The consideration
agreed between the parties was Rs.
43,86,000/- and a sum of Rs. 4,00,000/-
9 All. Hamid & Ors. Vs. Kailash & Ors.
819
was paid towards earnest money and the
remaining amount of Rs. 39,86,000/- was to
be paid at the time of execution of sale
deed. The time for execution of sale deed
was one year from the date of execution of
the agreement. The said suit was filed on
09.01.2017, which is pending before Civil
Judge (S.D.), Meerut and the trial court by
order dated 31.05.2018, directed the
defendants/respondents not to alienate the
property in dispute to any other person.

(2) Original Suit No. 85 of 2017
was instituted by petitioner no. 9 against
respondent nos. 1 to 6 and predecessor in
interest of respondent no. 9.1, 9.10 & 9.11
for specific performance of an agreement
dated 25.08.2013 regarding their share 1/6
share in Khasra No. 426 area 1.1140 hec.,
situated at village Bijauli, Tehsil & District
Meerut. The total sale consideration
agreed between the parties was Rs.
8,36,000/- out of which Rs. 25,000/- was
paid as earnest money. The date of
execution was fixed as 26.02.2014.

(3) Original Suit No. 117 of 2017
was instituted by petitioner no. 1, against
one Satyawati predecessor in interest of
respondent no. 1 to 4, regarding their 1/4
share in Khasra No. 346 for specific
performance of an agreement to sell dated
29.01.2013. The total sale consideration
agreed between the parties was Rs.
13,59,000/- out of which Rs. 1,00,000/- was
paid as earnest money. In the said suit, an
alternative prayer was made for refund of
earnest money. By an interim injunction
order dated 14.12.2017, the trial court
restrained the defendants from alienating
their 1/6 share in Khasra No. 346 and also
directed the parties to maintain status quo.

(4) Original Suit No. 126 of 2017
was instituted by petitioner no. 10 against
respondent nos. 1 to 6 and predecessor in
interest of respondent no. 9.1, 9.10 & 9.11
for specific performance of an agreement
to sell dated 23.08.2013 regarding Khasra
No. 426. The total sale consideration
agreed between the parties was Rs.
12,12,000/- out of which Rs. 50,000/- was
paid as earnest money.

(5) Original Suit No. 135 of 2017
was instituted by petitioner nos. 5 & 6
against respondent nos. 1 to 6 and
predecessor in interest of respondent nos.
9.1, 9.10 & 9.11 for specific performance
of an agreement to sell dated 26.09.2013
regarding Khasra No. 426. The total sale
consideration agreed between the parties
was Rs. 38,02,000/- out of which Rs.
1,00,000/- was paid as earnest money. In
the suit, an alternative prayer for refund of
earnest money was also made. The trial
court by order dated 13.04.2018, granted
an interim injunction restraining the
defendants from alienating the property in
dispute.

(6) Original Suit No. 86 of 2017
was instituted by petitioner no. 9 against
respondent no. 7 regarding Khasra No. 426
on 18.04.2013. The total sale consideration
agreed between the parties was Rs.
16,72,000/- out of which Rs. 25,000/- was
paid as earnest money. In the suit, an
alternative prayer for refund of earnest
money was also made.

(7) Original Suit No. 119 of 2017
was instituted by petitioner no. 7 & 8
against one Satyawati, predecessor in
interest of respondent no. 1 to 4 for specific
performance of an agreement to sell dated
23.08.2013 for 1/4 share in Khasra No. 346
on 20.08.2023. The total sale consideration
agreed between the parties was Rs.
18,84,000/- out of which Rs. 1,00,000/- was
paid as earnest money. In the suit, an
alternative prayer for refund of earnest
money was also made.

4. During the pendency of the
aforementioned
suits,
Uttar
Pradesh
820 INDIAN LAW REPORTS ALLAHABAD SERIES
Expressways
Industrial
Development
Authority (herein after referred to as " UP
EIDA") issued a notification under Section
11 of the U.P. Right to Fare Compensation
and Transparancy in Land Acquisition,
Rehabilitation and Resettlement Act, 2013
(hereinafter referred to as "the Act of
2013") for acquiring the land in dispute for
construction of Ganga Express Way.
Notification under Section 19 was issued
on 06.07.2022. On 24.08.2022, award was
passed. On 27.09.2022, the respondents
filed an application before the Additional
District Magistrate, Meerut for payment of
awarded amount being the recorded tenure
holders of the land in dispute. Objections
were
filed
by
the
petitioners
for
disbursement of compensation amount. By
order dated 10.01.2023, A.D.M., Land
Acquisition
Meerut,
considering
the
objections of the petitioners that their suits
for specific performance of agreements
executed by the respondents are pending
regarding the Khasra No. 346 & 426,
passed an order that dispute be referred
under Section 76 of the Act of 2013. The
order dated 10.01.2023 was challenged by
the respondents by filing Writ C No. 11901
of 2023. The said writ petition was
dismissed and 4th respondent in the said
writ petition was directed to refer the
matter to the authority for decision under
Section 76 of the Act of 2013. Thereafter,
A.D.M. Meerut (Finance & Revenue)
referred the matter under Section 76 of the
Act of 2013 to the Land Acquisition
Rehabilitation and Resettlement Authority.
Both the parties after receiving notice from
the authority filed their objections and
evidence. The respondent authority i.e.
Land
Acquisition
and
Resettlement
Authority Meerut by its judgment and order
dated 05.07.2025 allowed the claim of the
respondents holding them to be entitled for
compensation and rejected the objections
filed by the petitioners on the ground that
the petitioners had no interest as the
petitioners are not the owner of the land in
dispute and has further directed for refund
of earnest money paid along with interest
by the respondents. After payment of
earnest money, the respondents will be
entitled
for
remaining
compensation
amount, hence the present petition

5. Contention of the learned counsel
for the petitioners is that the court below
has erroneously rejected the claim of the
petitioner. The petitioners are holder of
agreement to sell in their favour by the
respondents, executed much prior to
acquisition of land by U.P. EIDA and the
suits
for
specific
performance
of
agreements to sell executed by the
respondents are pending before the civil
court and in certain suits interim injunction
has also been granted in favour of the
petitioners/plaintiffs by the civil court
restraining the defendants/respondents from
alienating the property in dispute as well as
directing the parties to maintain status quo.
It has been further contended by learned
counsel
for
the
petitioner
that
the
petitioners are the persons interested and
their claim has wrongly been rejected by
the authority. It has been further contended
by learned counsel for the petitioner that
agreement to sell created an interest in the
land itself in favour of the intending
purchaser therefore, the petitioners are the
persons interested in the compensation.

6. Per contra, learned counsel for the
respondents submitted that mere execution
of agreement to sell does not confer any
title on the parties. At the best, the
petitioners
are
entitled
for
specific
performance of agreements which were
executed by the respondents. It has been
further contended by learned counsel for
9 All. Hamid & Ors. Vs. Kailash & Ors.
821
the respondents that since the land now
been acquired, no relief of specific
performance can be granted in favour of the
petitioners. Mere pendency of suits for
specific performance of agreements to sell
will not confer any right or the same cannot
be interpreted that the plaintiff in the
aforesaid suit will be a person interested in
the compensation amount and claim
apportionment of the compensation. It has
also been contended by learned counsel for
the respondents that till now, the suits are
pending and it has not been decided as to
whether the plaintiffs in the suit are entitled
for decree of specific performance. It is
possible that their suit may be dismissed
and therefore, the authority has committed
nothing wrong in rejecting their claim and
directed for refund of earnest money as
now their suits cannot be decreed for
specific performance because of operation
of law as the land has been acquired. It has
been further contended that grant of interim
injunction, in favour of the plaintiffs,
restraining the defendants from alienating
the property in dispute or to maintain status
quo, is of no avail as the same is not
binding on the State in case of compulsory
acquisition under the Act of 2013.

7.
Before
considering
the
rival
submissions it would be appropriate to
consider Section 54 of the Transfer of
Property Act, 1882 which is quoted as
under:

54. "Sale" defined.-"Sale" is a
transfer of ownership in exchange for a
price paid or promised or part-paid and
part-promised.

Sale how made.-Such transfer, in
the case of tangible immoveable property
of the value of one hundred rupees and
upwards, or in the case of a reversion or
other intangible thing, can be made only by
a registered instrument.

In
the
case
of
tangible
immoveable property of a value less than
one hundred rupees, such transfer may be
made either by a registered instrument or
by delivery of the property. Delivery of
tangible immoveable property takes place
when the seller places the buyer, or such
person as he directs, in possession of the
property.

Contract for sale.-A contract for
the sale of immoveable property is a
contract that a sale of such property shall
take place on terms settled between the
parties. It does not, of itself, create any
interest in or charge on such property."

8. An agreement to sell of property
and promise to transfer the property convey
the same meaning and effect in law. A
promise
to
transfer
property
is
an
agreement for sale of property. According
to Section 54 of Transfer of Property Act,
an agreement to sell does not create any
interest in the proposed vendee in the suit
property but only creates an enforceable
right to the parties. An agreement for sale is
not the same as sale and the title to the
property agreed to be sold still vests in the
vendor in case of an agreement to sell but
in the case of sale, title of property vests
with the purchaser. An agreement for sale
is a executory contract wherein a sale is a
executed contract. The question as to
whether an agreement to sell creates any
right is no more res-integra and has been
settled by authoritative pronouncement
made by this Court as well as Apex Court
and various other High Courts.

9. The Supreme Court in case of
Namdeo v. Collector, East Neemar,
Khandwa and others reported in AIR
822 INDIAN LAW REPORTS ALLAHABAD SERIES
1996 SC 975 held in paragraph no. 7 as
under:

"7. ........ An agreement of sale
does not convey any right, title or interest.
It would create only an enforceable right in
a court of law and parties could act
thereon. The right, title and interest in the
land of Devi Prasad stood extinguished
only on execution and registration of the
sale deed and admittedly it was done in
1974. Therefore, the sale deeds are within
the prohibited period."

10. The Supreme Court in case of
State of U.P. v. District Judge and others
reported in (1997) 1 SCC 496 held in
paragraph no. 7 as under:

"7. Having given our anxious
consideration to the rival contentions we
find that the High Court with respect had
patently erred in taking the view that
because of Section 53-A of the Transfer of
Property Act the proposed transferees of
the land had acquired an interest in the
lands which would result in exclusion of these
lands from the computation of the holding of
the tenure-holder transferor on the appointed
day. It is obvious that an Agreement to Sell
creates no interest in land. As per Section 54
of the Transfer of Property Act, the property
in the land gets conveyed only by registered
Sale Deed. It is not in dispute that the lands
sought to be covered were having value of
more than Rs.100/-. Therefore, unless there
was a registered document of sale in favour
of
the
proposed
transferee
agreement
holders, the title of the lands would not get
divested from the vendor and would remain
in his ownership. There is no dispute on this
aspect."

11. In case of Rambhau Namdeo
Gajre v. Narayan Bapuji Dhotra (dead)
through LRS. reported in (2004) 8 SCC
614, the Supreme Court held in paragraph
no. 13 as under:

"13. The agreement to sell does
not create an interest of the proposed
vendee in the suit property. As per Section
54 of the Act, the title in immovable
property valued at more than Rs. 100/- can
be conveyed only by executing a registered
sale deed. Section 54 specifically provides
that a contract for sale of immovable
property is a contract evidencing the fact
that the sale of such property shall take
place on the terms settled between the
parties, but does not, of itself, create any
interest in or charge on such property. It is
not disputed before us that the suit land
sought to be conveyed is of the value of
more than Rs. 100. Therefore, unless there
was a registered document of sale in favour
of the Pishorrilal (proposed transferee) the
title of the suit land continued to vest in
Narayan Bapuji Dhotra (original plaintiff)
and remain in his ownership....."

12. Again in case of Balwant Vithal
Kadam
v.
Sunil
Baburaoi
Kadam
reported in MANU/SC/1525/2017 & AIR
2018 SC 49, the Supreme Court held in
paragraph no. 17 as under:

"17. So far as the plea relating to
validity and enforceability of the agreement
in question is concerned, it was rightly held
by the High Court to which we concur that
the agreement in question is not hit by
Section 48 of the Maharashtra Cooperative Society Act inasmuch as the
agreement to sell in itself does not create
any interest in the land nor does it amount
to sale under Section 54 of the T.P. Act. It
only enables the intending buyer to claim
specific performance of such agreement on
proving its terms. In other words, there lies
9 All. Hamid & Ors. Vs. Kailash & Ors.
823
a distinction between an agreement to sell,
and sale. The latter creates an interest in
the land once accomplished as defined
under Section 54 of the T.P. Act."

13. This Court in case of Babu Lal
and others v. Nathi Lal reported in 2013
(6) ADJ 111 (MANU/UP/0838/2013), has
held in paragraph no. 16 & 17 as under:

16. However, in my view there is
no scope for bringing in way Section 8 of
HMG Act in the case in hand inasmuch an
"agreement for sale" does not tantamount
to transfer of immovable property, subject
matter of agreement for sale, to anyone. It
does not confer any proprietary rights to
the prospective vendee. Thus, apparently,
Section 8 would not be attracted for
entering into an agreement for sale. The
nature of contract for sale has been
discussed by the Courts time and again.

17. The agreement for sale or
contract for sale, by itself is not an
instrument
giving
effect
to
sale
of
immoveable property. The title to property
agreed to be sold continued to vests in the
vendor, in case of agreement for sale, but
in case of sale, title or property vests with
purchaser. In other words an agreement for
sale is an executory contract whereas sale
deed is an executed contract. An agreement
for sale does not create an interest in the
proposed vendee in the suit property but
only creates an enforceable right in parties.
An agreement for sale of property, and
promise to transfer the property convey the
same meaning and effect in law. A promise
to transfer property is an agreement for
sale of property."

14. In Maung Shwe Goh v. Maung
Inn, 1917(1) Bom LR 179 the Court
considered Section 54 of Transfer of
Property Act, 1882 and said that a contract
for sale by virtue of Section 54 creates no
interest in or charge upon the land.

15. In Jiwan Das v. Narain Das, AIR
1981 Delhi 291 a Single Judge in para 10
and 11 of the judgment, following
Rambaran Prosad (supra), said:

"10. . . . . . . the law in India does
not recognise any such estate. Section 54 of
the Transfer of Property Act in specific
terms provides that a contract for sale does
not, of itself, create any interest in or
charge on such property. Such contract is
merely a document creating a right to
obtain another document in the form of sale
deed to be registered in accordance with
law. In other words, a contract for sale is a
right created in personam and not in estate,
No privity in estate can be deduced there
from which can bind estate, as is the
position in cases of mortgage, charge or
lease. Of course, such personal right
created against the vendor to obtain
specific performance can ultimately bind
any subsequent transferee who obtains
transfer of the property with notice of the
agreement of sale.

11. Till, therefore, a decree for
specific performance is obtained, the
vendor or a purchaser from him is entitled
to full enjoyment of the property. In fact,
even if a decree for specific performance of
contract is obtained, and no sale-deed is
actually executed, it cannot be said that
any interest in the property has passed."

16. In Sujan Charan Lenka and
others v. Smt. Pramila Mumari Mohanty
and others, AIR 1986 Ori 74, the Court in
para 7 of judgment, said, that a bare
contract for sale of immoveable property
does not create any interest in immoveable
property.
824 INDIAN LAW REPORTS ALLAHABAD SERIES

17. Thus, in my view from the judicial
opinion as discussed above and in view of
Section 54 of the Transfer of Property Act,
an agreement to sell does not create any
interest in or charge upon such property
which is subject matter of the agreement to
sell.
The
prospective
vendee
in
an
agreement to sell only gets a right to get the
agreement
specifically
enforced
for
execution of sale deed. In other words, a
person having an agreement for sale does
not get any right over the property except
the right of litigation on that basis.
Sometimes, it is also describes that a
contract for a sale is merely a document,
creating a right to obtain another document.
A contract for sale does not, by itself,
create any interest in or charge on such
property. Such contract is merely a
document creating a right to obtain another
document in the form of sale deed to be
registered in accordance with law. In other
words, a contract for sale is a right created
in personam and not in estate. No privity in
estate can be deduced therefrom which can
bind the estate, as is the position in cases of
mortgage, charge or lease. Of course, such
personal right created against the vendor to
obtain specific performance can ultimately
bind any subsequent transferee who obtains
transfer of the property with notice of the
agreement of sale. Till, therefore, a decree
for specific performance is obtained, the
vendor or a purchaser from him is entitled
to full enjoyment of the property. In fact,
even if a decree for specific performance of
contract is obtained, and no sale-deed is
actually executed, it cannot be said that any
interest in the property has passed.

18. So far as the contention of the
learned counsel for the petitioner that
agreement to sell created an equitable
interest in the land in favour of the
purchaser, is misconceived. The law in
India does not recognise equitable estates
and the English Rule that the contract
makes a purchaser owner in equity of the
estate, does not apply in India.

19. In case of Rambaran Prosad v.
Ram Mohit Hazra and others reported in
AIR
1967
SC
744
&
MANU/SC/0212/1966, the Supreme Court
has held in paragraph no. 14 & 15 as under:

14. In the case of an agreement
for sale entered into prior to the passing of
the Transfer of Property Act, it was the
accepted doctrine in India that the
agreement created an interest in the land
itself in favour of the purchaser. For
instance, in Fati Chand Sahu v. Lilambar
Sing Das (1871) 9 B.L.R. 433 a suit for
specific performance of a contract for sale
was dismissed on the ground that the
agreement, which was held to create an
interest in the land, was not registered
under s. 17, cl. (2) of the Indian
Registration Act of 1866. Following this
principle, Markby J. in Tripoota Soonduree
v. Juggur Nath Dutt (1875) 24 W.R. 321
expressed the opinion that a covenant for
pre-emption contained in a deed of
partition, which was unlimited in point of
time, was not enforceable in law. The same
view was taken by Baker J. in Allibhai
Mahomed Akuji v. Dada Allis Isap A.L.R.
1931 Bom. 578 where the option of
purchase was contained in a contract
entered into before the passing of the
Tranfer of Property Act. The decision of the
Judicial Committee in Maharaj Bahadur
Singh v. Bal Chanad 48 I.A. 376 was also a
decision relating to a contract of the year
1872. In that case, the proprietor of a hill
entered into an agreement with a society of
Jains that, if the latter would require a site
thereon for the erection of a temple, he and
his heirs would grant the site free of cost.
9 All. Hamid & Ors. Vs. Kailash & Ors.
825
The proprietor afterwards alienated the
hill.
The
society,
through
their
representatives, sued the alienees for
possession of a site defined by boundaries,
alleging notice to the proprietor requiring
that
site
and
that
they had
taken
possession, but been dispossessed. It was
held by the Judicial Committee that the suit
must fail. The Judicial Committee was of
the opinion that the agreement conferred
on the society no present estate or interest
in the site, and was unenforceable as a
covenant, since it did not run with the land,
and infringed the rule against perpetuity.
Lord Buckmaster who pronounced the
opinion of the Judicial Committee observed
as follows:

"Further, if the case be regarded
in another light-namely, an agreement to
grant 'in the future whatever land might be
selected as a site for a temple-as the only
interest created would be one to take effect
by entry at a later date, and as this date is
uncertain, the provision is obviously bad as
offending the rule against perpetuities, for
the interest would not then vest in present,
but would vest at the expiration of an
indefinite time which might extend beyond
the expiration of the proper period."

15. But there has been a change
in the legal position in India since the
passing of the Transfer of Property Act.
Section 54 of the Act states that a contract
for sale of immovable property "does not,
of itself, create any interest in or charge on
such property"

20. It is thus, evident that law as it
stand, is very clear that contract for sale
would
not
make
the
intending
purchaser/vendee to be owner even in
equity of estate so long as a sale deed is not
executed and registered. Mere execution of
a contract for sale by itself would not create
any right or interest in the property.

21. Learned counsel for the petitioner
submitted that in view of Section 21 of the
Specific Relief Act in a suit for specific
performance of contract, the plaintiff can
also claim compensation for the breach of
contract. It has been further contended by
learned counsel for the petitioner that in
case, any suit filed for specific performance
of an agreement for sale, the court comes to
a conclusion that specific performance of
an agreement cannot be granted but there is
a contract between the parties which has
been broken by the parties in such case, the
petitioner entitled for the compensation for
breach and can always be awarded
compensation/damages for the breach, if
any.

22. Section 21 of the Specific Relief
Act is quoted as under:

"21.
Power
to
award
compensation in certain cases.-(1)In a suit
for specific performance of a contract, the
plaintiff may also claim compensation for
its breach, either in addition to, or in
substitution of, such performance

(2)If, in any such suit, the court
decides that specific performance ought not
to be granted, but that there is a contract
between the parties which has been broken
by the defendant, and that the plaintiff is
entitled to compensation for that breach, it
shall
award
him
such
compensation
accordingly.

 (3)If, in any such suit, the court
decides that specific performance ought to
be granted, but that it is not sufficient to
satisfy the justice of the case, and that some
compensation for breach of the contract
should also be made to the plaintiff, it shall
award him such compensation accordingly.

(4)In determining the amount of any
compensation awarded under this section,
the court shall be guided by the principles
826 INDIAN LAW REPORTS ALLAHABAD SERIES
specified in section 73 of the Indian
Contract Act, 1872 (9 of 1872).

(5)No compensation shall be awarded
under this section unless the plaintiff has
claimed such compensation in his plaint:

Provided that where the plaintiff has
not claimed any such compensation in the
plaint, the court shall, at any stage of the
proceeding, allow him to amend the plaint
on such terms as may be just, for including
a claim for such compensation."

23. Learned counsel for the petitioner
relied upon the judgment of the Apex Court
in case of Jagdish Singh v. Natthu Singh
reported in (1992) 1 SCC 647, wherein the
Apex Court after considering the provisions
of Section 21 of the Specific Relief Act
upheld the directions given by the High
Court in a second appeal, arising from a
suit for specific performance, granting
damages to the plaintiff after holding that
the plaintiff was ready and willing to
perform the contract and the defendant was
liable for breach of contract. The Supreme
Court held that any suit for specific
performance compensation can be awarded
where
contract
became
incapable
of
specific performance without any fault of
the plaintiff. Paragraph no. 12, 14, 15, 16,
17, 24, 27, 29 & 30 of the judgment in case
of Jagdish Singh v. Natthu Singh (Supra)
are quoted as under:

12. As to the relief available to a
plaintiff where the subject matter was
acquired during the pendency of a suit for
specific-performance the High Court said:

"...The learned counsel for the
respondent has vehemently urged that after
the land has been acquired its corpus has
ceased to exist and no decree for specific
performance can now be granted. In my
opinion with the acquisition of the land
plaintiffs rights do not get extinguished in
totality.
The
appellate
court
always
suitably mould the relief which the
circumstances of the case may require or
permit. The power in this regard is ample
and wide enough

However, in the present case the
property has not been totally lost. What
happens in the case of the acquisition is
that for the property compensation payable
in lieu thereof is substituted..."

14. We are afraid the approach of
the High Court is perhaps somewhat an
over-simplification of an otherwise difficult
area of law as to the nature of relief
available to a plain- tiff where the contract
becomes
impossible
of
specific
performance and where there is no
alternative prayer for compensation in lieu
or substitution of specific performance.
While the solution that has commended
itself to the High Court might appear
essentially just or equitable, there are
certain problems both of procedure and of
substance in the administration of the law
of specific relief particularly in the area of
award of an alternative relief in lieu or
substitute of specific performance that
require
and
compel
consideration,
especially in view of some pronouncements
of the High Courts which have not
perceived
with
precision,
the
nice
distinctions between this branch of the law
as administered in England and in India.

15. Section 21 of the Specific
Relief Act, 1963 corresponding to Section
19 of 1877 Act enables the plaintiff in a suit
for specific performance also to claim
compensation for its breach either in
addition to or in substitution of, such
performance. Sub-sections (2), (4) and (5)
of Section 21 are material and they
provide:

"21. (2) If, in any such suit, the
Court decides that specific performance
ought not to be granted, but that there is a
9 All. Hamid & Ors. Vs. Kailash & Ors.
827
contract between the parties which has
been broken by the defendant, and that the
plaintiff is entitled to compensation for that
breach,
it
shall
award
his
such
compensation accordingly.

(4) In determining the amount of
any compensation awarded under this
section, the Court shall be guided by the
principles specified in Section 73 of the
Indian Contract Act, 1872, 9 of 1872.

(5) No compensation shall be
awarded under this section unless the
plaintiff has claimed such compensation in
his plaint:

Provided that where the plaintiff
has not claimed any such compensation in
the plaint, the Court shall, at any stage of
the proceeding, allow him to amend the
plaint on such terms as may be just, for
including a claim for such compensation.
Explanation-The circumstance that the
contract has become incapable of specific
performance does not preclude the Court
from exercising the jurisdiction conferred
by this section."

(emphasis added)

16. So far as the proviso to subsection (5) is concerned, two positions must
be kept clearly distinguished. If the
amendment
relates
to
the
relief
of
compensation in lieu of or in addition to
specific performance where the plaintiff
has not abandoned his relief of specificperformance the court will allow the
amendment at any stage of the proceeding.
That is a claim for compensation failing
under Section 21 of the Specific Relief Act,
1963 and the amendment is one under the
proviso to sub-section (5). But different and
less liberal standards apply if what is
sought by the amendment is the Conversion
of a suit for specific performance into one
for damages for breach of contract in
which case Section 73 of the Contract Act
is invoked. This amendment is under the
discipline of Rule 17 Order 6, C.P.C. The
fact that sub-section (4), in turn, invokes
Section 73 of the Indian Contract Act for
the
principles
of
quantification
and
assessment of compensation does not
obliterate this distinction.

17. The provisions of Section 21
seem to resolve certain divergencies of
judicial opinion in the High Courts on
some aspects of the jurisdiction to award of
compensation. Sub- section (5) seeks to set
at rest the divergence of judicial opinion
between High Courts whether a specific
claim in the plaint is necessary to grant the
compensation. In England Lord Cairn's
(Chancery Amendment) Act, 1858 sought to
confer jurisdiction upon the Equity Courts
to award damages in substitution or in
addition to specific performance. This
became necessary in view of the earlier
dichotomy in the jurisdiction between
common law and Equity Courts in the
matter of choice of the nature of remedies
for breach. In common law the remedy for
breach of a contract was damages. The
Equity Court innovated the remedy of
specific performance because the remedy of
damages was found to be an inadequate
remedy. Lord Cairn's Act, 1858 conferred
jurisdiction upon the Equity Courts to
award damages also so that both the reliefs
could be administered by one court. Section
2 of the Act provided:

"2. .. In all cases in which the
Court of Chancery has jurisdiction to
entertain
an
application
for
specific
performance of any covenant, contract or
agreement it shall be lawful for the same
Court if it shall think fit to award damages
to the party injured either in addition to or
in
substitution
for
such
specific
performance and such damages may be
assessed as the Court shall direct."
828 INDIAN LAW REPORTS ALLAHABAD SERIES

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.

27.
The
measure
of
the
compensation is by the standards of Section
73 of the Indian Contract. Here again the
English Rule in Bain v. Fothergill, (1874)
L.R. 7 House of Lords 158 that the
purchaser, on breach of the ,contract,
cannot recover, for the loss of his bargain
is not applicable. In Pollock & Mulla on
Contract (10th Edn.) the law on the matter
is set out thus :

"Where, therefore, a purchaser of
land claims damages for the loss of his
bargain, the question to be decided is
whether the damages alleged to have been
caused to him 'naturally arose in the Usual
course of things from such breach'; and in
an ordinary case it would be difficult to
hold otherwise."

29. In the present case there is no
difficulty in assessing the quantum of the
compensation. That is ascertainable with
reference to the determination of the
market value in the land acquisition
proceedings. The compensation awarded
may safely be taken to be the measure of
damages
subject,
of
course,
to
the
deduction therefrom of money value of the
services, time and energy expended by the
appellant in pursuing the claims of
compensation and the expenditure incurred
by him in the litigation culminating in the
award.

30. We accordingly confirm the
finding of the High Court that Respondent
was willing and ready to perform the con-
tract and that it was the Appellant who was
in breach.