Sub Headline: Court affirms plaintiff’s continuous readiness and financial capacity, rejects undue influence claims, and directs defendants to execute sale deed or face court-enforced transfer
In a significant judgment dated May 6, 2026, the Allahabad High Court, presided by Justice Sandeep Jain, dismissed the appeal filed by the legal heirs of the late Dharam Prakash Nangia against the decree of specific performance granted in favour of Shivani Hospital Private Ltd. The case, arising from a dispute over the sale of a residential property in Kanpur Nagar, centered on the enforcement of a registered agreement to sell dated October 22, 2012.
Background:
The plaintiff, Shivani Hospital Pvt. Ltd., entered into a registered agreement with the late Dharam Prakash Nangia for the purchase of a 1,352 square yard plot at Sarvodaya Nagar for Rs. 5.25 crores. Under the agreement, the seller was to convert the leasehold property to freehold at his expense and thereafter execute the sale deed. The plaintiff paid Rs. 2 crores as earnest money and an additional Rs. 41 lakhs towards conversion expenses. The balance Rs. 3.25 crores was to be paid on execution of the sale deed.
Following the seller’s death in 2015, his daughters—defendants in the suit—refused to execute the sale deed despite multiple notices and the plaintiff’s repeated presence at the sub-registrar’s office with the balance sale consideration. The defendants alleged undue influence, financial incapacity of the plaintiff, and raised other procedural objections, including the plaintiff’s absence during registration.
Key Findings:
1. Execution and Terms of Agreement: The court affirmed the validity of the registered agreement, noting admissions by defendant no.1 that the agreement was executed by their father. It emphasized that the seller had failed to obtain freehold conversion within the stipulated time, and neither he nor his heirs informed the plaintiff accordingly.
2. Plaintiff’s Readiness and Willingness: The court extensively analyzed the plaintiff’s conduct, bank statements, and balance sheets, concluding that Shivani Hospital Pvt. Ltd. continuously demonstrated readiness and financial capacity to fulfill contractual obligations. The presence of the plaintiff’s representatives at the sub-registrar’s office on multiple occasions, backed by documentary proof, reinforced this finding.
3. Allegations of Undue Influence and Inadequate Consideration: The court rejected claims of undue influence by Dr. Shivakant Mishra (plaintiff’s director) and his wife, finding no credible evidence of a doctor-patient relationship or coercion. It discredited the valuation report submitted by defendants showing a market value of Rs. 10.91 crores, noting it far exceeded government circle rates and was prepared without proper inspection.
4. Limitation and Fraud: The suit was held to be within the three-year limitation period under Article 54 of the Limitation Act, 1963. While the defendants alleged forgery of a notarized extension document, the court found insufficient evidence to establish fraud, and noted the suit’s maintainability irrespective of the document’s validity.
5. Mandatory Presence for Registration: Refuting defendants’ contention that the plaintiff’s absence from registration vitiated readiness, the court clarified that under the Uttar Pradesh amendment to the Registration Act, 1908, the buyer’s presence is not mandatory at registration. The plaintiff’s representatives were present as required.
Judgment and Directions:
The appeal was dismissed with costs. The court upheld the trial court’s decree directing the defendants to execute the sale deed within one month upon receipt of the balance sale consideration of Rs. 2.84 crores, which the plaintiff has already deposited with the trial court. Failure to comply will entitle the plaintiff to get the sale deed executed through the court.
Significance:
This ruling underscores the importance of a plaintiff’s continuous readiness and willingness—both financial and procedural—to perform contractual obligations in suits for specific performance under Section 16(c) of the Specific Relief Act, 1963. The judgment also clarifies the discretionary nature of such relief and the court’s vigilance against claims of undue influence or fraud without substantive proof.
The decision reaffirms that in property transactions, the burden lies on the vendor to fulfill conditions precedent, such as obtaining freehold status, and that failure to do so cannot be shifted to the purchaser. It also highlights the impact of state amendments to central laws like the Registration Act, particularly regarding procedural requirements at registration.
Bottom line:-
Specific performance of a contract - Plaintiff's readiness and willingness to perform the terms of the agreement is a prerequisite - The plaintiff must prove financial capacity and bona fide conduct throughout the execution and litigation process.
Statutory provision(s): Specific Relief Act, 1963 Section 16(c), Section 20; Limitation Act, 1963 Article 54; Registration Act, 1908 Section 32A (Uttar Pradesh amendment)
Mimansa Nangia v. Shivani Hospital Private Ltd., (Allahabad) : Law Finder Doc id # 2894332
