The Allahabad High Court has dismissed a first appeal filed by the legal heirs of a deceased property owner, affirming a trial court’s decree for the specific performance of a registered agreement to sell. The Court, presided over by Justice Sandeep Jain, held that the plaintiff (Shivani Hospital Private Ltd.) demonstrated continuous readiness and willingness to perform its contractual obligations, while the default lay with the sellers who failed to secure the necessary “freehold” conversion of the property as per the agreed terms.
Background of the Case
The dispute originated from an agreement to sell dated October 22, 2012, regarding a residential plot in Sarvodaya Nagar, Kanpur. The property was owned by late Dharam Prakash Nangia, who agreed to sell it to Shivani Hospital Private Ltd. for ₹5.25 crores. Out of this, ₹2 crores was paid as earnest money at the time of execution.
A crucial term of the agreement was that the seller would convert the leasehold property to freehold at his own expense by December 2014 and then execute the sale deed. Between 2014 and 2015, the plaintiff paid an additional ₹41 lakhs to Nangia for these expenses. However, Nangia died on July 4, 2015, without completing the freehold process. Following his death, his daughters (the appellants) refused to execute the sale deed, prompting the plaintiff to file a suit for specific performance in 2017.
Arguments of the Parties
Appellants (Defendants): Represented by Senior Counsel Shri Rahul Sahai, the appellants argued that:
- The plaintiff failed to prove financial capacity (“readiness”) from the date of the agreement until the decree.
- One of the initial cheques for ₹38 lakhs had bounced, indicating financial incapacity.
- The agreement was a result of “undue influence” as the director of the hospital was the family doctor of the deceased.
- A notarized time-extension document dated December 21, 2014, was forged by the plaintiff.
- The presence of the plaintiff’s representative at the Sub-Registrar’s office was mandatory under Section 32A of the Registration Act, and their alleged absence proved a lack of willingness.
Respondent (Plaintiff): Represented by Senior Counsel Shri Manish Goyal, the respondent contended that:
- They were always ready and willing, having already paid ₹2.41 crores.
- The delay was solely due to the seller’s failure to obtain the freehold permission, which was a condition precedent.
- The ₹38 lakh cheque was subsequently honored, a fact admitted by the defendants.
- The property was sold at a rate higher than the circle rate, negating the “undue influence” or “inadequate consideration” theory.
- The balance consideration of ₹2.84 crores had already been deposited with the trial court.
The Court’s Analysis
1. Readiness and Willingness: The Court observed that the plaintiff had paid nearly half of the consideration (₹2.41 crores) and was constantly following up through legal notices. Referring to Nathu Lal vs. Phool Chand (1969), the Court noted that if obligations are to be performed in a sequence, one of the parties to the contract cannot require compliance with the obligations by the other party without in the first instance performing his own part of the contract.
2. Financial Capacity: On the issue of the bounced cheque, the Court noted that it was honored shortly after and the seller never initiated cancellation proceedings. “The amount of consideration which he has to pay to the defendant must of necessity be proved to be available… right from the date of the execution till date of the decree,” the Court observed, finding that the plaintiff’s balance sheets and the eventual deposit of funds proved their “strong” financial standing.
3. Allegations of Fraud and Undue Influence: The Court dismissed the “undue influence” claim, noting a lack of documentary evidence of a doctor-patient relationship and the fact that the agreement was witnessed by a relative of the defendants. Regarding the disputed notarized document (Paper No. 130-C), the Court held that even if the plaintiff failed to prove it, the suit was still within the limitation period.
4. Section 32A of the Registration Act: The Court clarified the legal position regarding the presence of the vendee (buyer) during registration. It noted that the Central amendment to Section 32A differs from the version applicable in Uttar Pradesh. Citing Aloka Bose vs. Parmatma Devi (2009) and Rattan Singh vs. Nirmal Gill (2021), the Court held:
“It is evident that as per the provisions of Section 32A of the Registration Act, as prevailing in the State of Uttar Pradesh, the presence of vendee was not mandatory at the time of registration of sale deed.”
Decision
The Court concluded that there was no “perversity” in the trial court’s judgment. It affirmed the decree, holding that the escalation in property prices during litigation does not entail a refusal of specific performance.
The appeal was dismissed with costs. The defendants were directed to execute the sale deed within one month, failing which the plaintiff can seek execution through the Court.
Case Details Block:
- Case Title: Mimansa Nangia And 2 Others vs. Shivani Hospital Private Ltd.
- Case No.: FIRST APPEAL No. 485 of 2025
- Bench: Justice Sandeep Jain
- Date: 06.05.2026
