Correspondence Vs Gunashekar & Another (Supreme Court of India)
Supreme Court Scrutinizes Property Suit Based on Agreement to Sell, Orders Probe into Large Cash Payment Claim
Court Directs Authorities to Report High-Value Cash Transactions in Litigation and Registrations
New Delhi: In a significant ruling, the Supreme Court of India has overturned decisions of lower courts and ordered the rejection of a civil suit seeking permanent injunction against a long-standing educational institution based solely on an agreement to sell. The court underscored that an agreement to sell does not confer title or the right to sue a third party in possession and issued directives for reporting large cash transactions revealed in court documents and property registrations to the Income Tax Department.
The case, titled The Correspondence, RBANMS Educational Institution versus B. Gunashekar & Another, arose from a suit filed by the respondents (plaintiffs) seeking to restrain the appellant institution from dealing with a property the institution has possessed since 1905, having acquired it through a lease in 1905 and subsequent conveyance in 1929. The respondents’ claim rested entirely on an agreement to sell dated April 10, 2018, purportedly executed by individuals who were not even parties to the suit.
The appellant institution, a charitable trust established nearly 150 years ago, sought rejection of the plaint under Order VII Rule 11(a) and (d) of the Code of Civil Procedure, 1908 (CPC), arguing that the plaint did not disclose a cause of action and the suit was barred by law. Both the trial court and the High Court dismissed the institution’s application, leading to the appeal before the Supreme Court.
