Introduction:
In an important judgment concerning the evidentiary value of unregistered agreements to sell and the scope of judicial scrutiny at the interim injunction stage, the Jammu & Kashmir and Ladakh High Court recently held that an unregistered agreement to sell, though inadmissible for proving title to immovable property, can nevertheless be relied upon for collateral purposes, particularly to determine the nature and character of possession while deciding an application for temporary injunction.
The ruling was delivered by Justice Wasim Sadiq Nargal in the case titled Farooq Ahmad v. Habib Ul-Ilah Bhat & Ors. The matter arose from a petition filed under Article 227 of the Constitution of India challenging concurrent orders passed by the Trial Court and the Appellate Court granting interim protection in favour of the plaintiffs.
The dispute revolved around possession over certain immovable property comprising land, a residential structure, and an access pathway situated within the jurisdiction of Kupwara district. The respondents/plaintiffs instituted a civil suit for permanent injunction before the Court of Munsiff, Sogam, asserting that they were in peaceful possession and use of the suit property. Alongside the suit, they sought temporary injunction restraining the defendant from interfering with their possession during pendency of the proceedings.
The Trial Court initially granted ex parte interim relief in favour of the plaintiffs. Subsequently, after hearing both parties, the interim injunction was confirmed. The Court found that the plaintiffs had established a prima facie case and that preservation of status quo was necessary to avoid irreparable injury.
Aggrieved by the order, the petitioner/defendant preferred a miscellaneous appeal before the Principal District Judge, Kupwara. The appellate court, however, dismissed the appeal and affirmed the Trial Court’s findings, observing that the plaintiffs had succeeded in demonstrating prima facie possession and that the balance of convenience favoured maintenance of existing possession until final adjudication.
The petitioner thereafter approached the High Court under Article 227, contending that both subordinate courts had committed a serious legal error by relying upon an unregistered and unstamped agreement to sell. According to the petitioner, such a document neither conferred any title nor could it be admitted in evidence in relation to immovable property.
The matter thus presented the High Court with significant questions concerning the scope of admissibility of unregistered agreements to sell, the distinction between title and possession in civil proceedings, and the extent of supervisory jurisdiction under Article 227 over discretionary interim orders passed by subordinate courts.
In dismissing the petition, the High Court reaffirmed settled legal principles governing temporary injunctions and clarified that at the interlocutory stage, courts are not required to conclusively determine title. Instead, the enquiry remains confined to whether the plaintiff has established a prima facie case, whether the balance of convenience favours protection, and whether refusal of interim relief would result in irreparable injury.
The judgment is particularly significant because it carefully distinguishes between the inadmissibility of an unregistered agreement for proving ownership and its permissible use for collateral purposes such as assessing possession. It also reiterates the limited scope of interference by higher courts in discretionary interim orders unless such discretion is exercised perversely or arbitrarily.
Arguments of the Parties:
The principal argument advanced by the petitioner before the High Court was that both the Trial Court and the Appellate Court had committed a manifest legal error by relying upon an unregistered and unstamped agreement to sell while granting interim protection in favour of the plaintiffs.
According to the petitioner, the agreement relied upon by the respondents did not satisfy the statutory requirements of registration under the Registration Act and was therefore inadmissible in evidence insofar as it related to rights in immovable property.
It was contended that an agreement to sell does not create or transfer any right, title, or interest in immovable property. Consequently, the petitioner argued that the courts below could not have relied upon such a document even at the interim stage.
The petitioner further submitted that the plaintiffs were attempting to indirectly establish ownership and possessory rights through an unregistered document which lacked legal sanctity. According to the petitioner, permitting reliance on such a document would effectively defeat the purpose of compulsory registration requirements prescribed by law.
Another contention raised by the petitioner was that the property in question was joint and undivided. It was argued that the respondents could not claim exclusive possession or seek injunction against co-sharers in relation to undivided property.
The petitioner also challenged the concurrent findings of the subordinate courts by asserting that they had failed to properly appreciate the evidentiary deficiencies in the plaintiffs’ case and had mechanically granted interim protection without examining the legal admissibility of the documents relied upon.
On the other hand, the respondents/plaintiffs defended the orders passed by the subordinate courts and argued that the interim injunction had been granted after proper consideration of the material placed on record.
The respondents contended that the issue before the courts at the interlocutory stage was not determination of title but preservation of existing possession pending final adjudication of rights. According to the plaintiffs, they were in settled and peaceful possession of the suit property and therefore entitled to protection against unlawful interference.
The respondents further argued that even though an agreement to sell may not confer title, it can still be looked into for collateral purposes such as determining the nature and character of possession.
Reliance was placed upon judicial precedents recognizing that unregistered documents affecting immovable property can be admitted for limited purposes not directly relating to transfer of title.
The respondents also submitted that the Trial Court had carefully examined the three settled requirements governing temporary injunctions, namely prima facie case, balance of convenience, and irreparable injury. Both the Trial Court and the Appellate Court had concurrently found that these conditions were satisfied.
It was therefore argued that the High Court, while exercising supervisory jurisdiction under Article 227 of the Constitution, could not reassess evidence or substitute its own view merely because another interpretation was possible.
The respondents further maintained that disputed questions relating to ownership, partition, and title could only be conclusively determined after trial and not at the interim stage.
The dispute thus required the High Court to examine the permissible scope of reliance on unregistered agreements and the extent to which higher courts may interfere with discretionary interim orders passed by subordinate courts.
Court’s Judgment:
After considering the rival submissions and examining the legal principles governing temporary injunctions and admissibility of unregistered documents, the Jammu & Kashmir and Ladakh High Court dismissed the petition and upheld the concurrent orders passed by the subordinate courts.
Justice Justice Wasim Sadiq Nargal observed that the petitioner’s argument regarding inadmissibility of the agreement to sell, though legally correct in the context of proving title, could not be extended to completely exclude the document for collateral purposes.
The Court categorically held that an agreement to sell, even if unregistered, may still be relied upon for determining the nature and character of possession at the stage of deciding an application for temporary injunction.
The Court observed:
“… the argument relating to inadmissibility of the agreement to sell, though legally sound in the context of title, cannot be stretched to negate the limited use of such document for collateral purposes, particularly for assessing the nature and character of possession.”
The High Court emphasized that at the stage of deciding interim injunction applications, courts are not expected to conclusively determine ownership rights or title disputes. Instead, the enquiry remains confined to whether the plaintiff has demonstrated a prima facie case deserving temporary protection.
In this regard, the Court relied upon the Supreme Court’s decision in Zenit Mataplast Pvt. Ltd. v. State of Maharashtra, wherein it was held that interim orders are based on tentative findings intended to preserve status quo until final adjudication.
The High Court further referred to Wander Ltd. v. Antox India Pvt. Ltd., reiterating that appellate courts should ordinarily refrain from interfering with discretionary orders unless such discretion is exercised arbitrarily, perversely, or contrary to settled principles of law.
Applying these principles, the Court observed that both subordinate courts had carefully examined the relevant material and concluded that the plaintiffs were in possession of the suit property. Therefore, no interference was warranted in supervisory jurisdiction under Article 227.
The Court further clarified that supervisory jurisdiction is not equivalent to appellate jurisdiction. The High Court cannot reassess evidence or substitute its own subjective satisfaction merely because another possible view exists.
The Court stated:
“This Court, while exercising supervisory appellate jurisdiction, cannot reassess the material on record as if sitting in appeal over the subjective satisfaction arrived at by the court of first instance merely because another view may also be possible.”
On the issue of admissibility of the unregistered agreement, the Court relied heavily upon the Supreme Court’s judgment in S. Kaladevi v. V.R. Somasundaram. In that case, the Supreme Court had held that an unregistered document affecting immovable property may still be admitted in evidence for collateral purposes, including as proof of possession or existence of a contractual arrangement.
The High Court explained that collateral purpose means a purpose other than proving transfer of title or ownership. Accordingly, reliance upon the unregistered agreement solely to assess the nature and character of possession was legally permissible.
The Court observed:
“A plain reading of the aforesaid judgment makes it clear that reliance on an unregistered agreement is permissible to the limited extent of assessing the nature and character of possession, being a collateral purpose in law.”
Another significant aspect of the judgment was the Court’s reaffirmation of possessory rights independent of perfect title. The Court noted that even a person lacking flawless title may still be entitled to legal protection if found in settled possession of property.
According to the Court, law does not permit dispossession through force or unlawful means merely because title disputes remain unresolved. Such disputes must be adjudicated through due process of law.
The Court also rejected the petitioner’s contention regarding the property being joint and undivided. It observed that such questions involve disputed factual issues requiring evidence and adjudication during trial. Therefore, they could not be conclusively determined at the interlocutory stage.
Ultimately, the High Court concluded that both subordinate courts had exercised their discretion judiciously and in accordance with settled legal principles. Since no perversity, arbitrariness, or jurisdictional error was demonstrated, interference under Article 227 was unwarranted.
Accordingly, the petition was dismissed and the interim injunction granted in favour of the plaintiffs was allowed to continue pending final adjudication of the suit.
The judgment is significant because it clarifies the nuanced distinction between title and possession in property disputes. It also reinforces the principle that interim injunction proceedings are intended to preserve status quo rather than conclusively determine substantive rights.
By recognizing the limited evidentiary use of unregistered agreements for collateral purposes, the Court adopted a pragmatic approach ensuring that procedural deficiencies do not entirely negate relevant surrounding circumstances at the interim stage.