A registered sale agreement. Two buyers. One turned hostile. The Supreme Court still enforced it.

He signed a sale agreement, took an advance, then sold the land to others. One of the buyers even testified the deal was fake. The Supreme Court didn't buy it.

The year was 1981. Preetam Singh agreed to sell about 2.90 acres of agricultural land to two buyers — Karan Singh and Murari Singh — for Rs. 20,300. He took Rs. 7,000 as an advance. The sale deed was never executed. Two years later, Preetam Singh sold portions of the same land to three other persons. The two original buyers sued, asking the court to force Preetam Singh to complete the sale — a legal remedy called specific performance (a court order compelling a party to do what they promised in a contract).

The registered agreement for sale, a document of paper and ink, sat at the centre of the dispute. Its pages, thin and official, recorded the promise. The land itself — about 2.90 acres of Bhumidhari agricultural soil — was the prize. The silence in the courtroom was heavy when Murari Singh, one of the two buyers, took the stand and testified against his own case.

When the buyer turned on his own case

During the trial, Murari Singh — one of the two buyers who had filed the suit — switched sides. He testified in court that the 1981 agreement was never meant to be a real sale. It was only a ruse, he claimed, to scare Preetam Singh from selling the land to anyone else. The agreement, he said, was a sham. The courtroom fell still as his words landed — a plaintiff dismantling his own claim from the witness box.

The trial court didn't believe him. Neither did the first appellate court (the Additional District Judge, Nainital), nor the High Court of Uttarakhand. All three courts ruled in favour of the buyers and ordered Preetam Singh to execute the sale deed. The three subsequent purchasers — who had bought portions of the same land in 1983 — appealed to the Supreme Court. The file, now thick with years of litigation, travelled from the trial court in Nainital to the highest court in the land.

The question that hung over the case

Could a registered sale agreement be enforced even when one of the buyers himself testified it was a fake? And could the later buyers be forced to give up the land they had purchased, even though they had no direct knowledge of the earlier agreement?

Why the 'sham' defence collapsed

The subsequent purchasers argued that the 1981 agreement was not a genuine contract. They pointed to Murari Singh's testimony and invoked Sections 91 and 92 of the Indian Evidence Act, 1872. These sections say that when the terms of a contract are reduced to a written document, you cannot bring oral evidence to contradict, vary, or add to those terms. The purchasers argued that Murari Singh's oral testimony about the agreement being a sham should have been excluded.

The Supreme Court disagreed. The Court explained that Sections 91 and 92 do not prevent a party from showing that the document itself was never intended to create a contract. They only prevent oral evidence from changing the terms of a valid written contract. Here, the defence was not that the terms of the agreement were different — it was that the parties never intended to contract at all. That is a different question, the Court said, and evidence on that question is not barred by the Evidence Act.

But the Court found a fatal flaw in the defence: the pleadings (the written statements filed in court) were too vague. The subsequent purchasers had not specifically pleaded that the agreement was a sham. Without a clear allegation in the pleadings, the defence could not be sustained. The concurrent findings of the trial court, first appellate court, and High Court — that the agreement was genuine — were affirmed.

The Supreme Court's reasoning was crisp on this point. The Court observed that the evidence on whether the parties intended to contract at all is not barred by Sections 91 and 92 of the Evidence Act — those provisions only exclude oral evidence that contradicts or varies the terms of a written document. The defence of sham, however, failed because the pleadings were insufficient to support it.

Constructive notice: the trap for later buyers

The second major question was whether the subsequent purchasers could claim to be bona fide purchasers without notice (buyers who bought the land in good faith, without knowing about the earlier agreement). If they were, the law would protect them, and the earlier buyers could not enforce their agreement against them.

The Supreme Court held they could not. The reason was constructive notice — a legal doctrine that says you are deemed to know something if you could have discovered it by reasonable diligence. Under Explanation 1 to Section 3 of the Transfer of Property Act, 1882, registration of a document counts as constructive notice to everyone. Since the 1981 agreement for sale was compulsorily registrable under the UP Civil Laws (Reforms) Act, 1976, and was in fact registered, the subsequent purchasers were deemed to have notice of it. They could not claim ignorance.

The Court also clarified a procedural point. The subsequent purchasers had argued that the suit for specific performance could not proceed because the original buyers had not separately asked the court to cancel the later sale deeds. The Court rejected this, citing Section 19(b) of the Specific Relief Act, 1963. That provision allows a court to order specific performance against a subsequent transferee who is not a bona fide purchaser without notice — without requiring a separate prayer for cancellation of the subsequent sale deed. The subsequent transferee can simply be directed to join in the conveyance.

A precedent that lost its way

The subsequent purchasers relied heavily on a 2018 Supreme Court decision, B. Vijaya Bharathi v. P. Savitri, which had held that a decree for specific performance cannot be passed against a subsequent purchaser without first setting aside the subsequent sale deed. The Court found this decision to be per incuriam — a Latin term meaning a decision made without considering a binding precedent. The 2018 judgment, delivered by a two-judge bench, had ignored a three-judge bench decision in Lala Durga Prasad v. Lala Deep Chand (1953), which held the opposite. The three-judge bench decision was binding, and the Court followed it.

The half-decree: what happens when a plaintiff defects

But the Supreme Court did not simply dismiss the appeal. It found one significant problem with the decree passed by the lower courts. The suit had been filed by two buyers — Karan Singh and Murari Singh — as joint plaintiffs. Murari Singh had turned hostile and effectively sided with the defendants. The Court held that a decree for specific performance could not be granted in favour of a plaintiff who did not support the suit.

The decree was modified. Instead of ordering the sale of the entire 2.90 acres, the Court directed that the sale deed be executed only for Karan Singh's one-half undivided share. Murari Singh's claim was dismissed.

The permission problem: agricultural land and non-agriculturists

There was one more complication. The land was Bhumidhari agricultural land (a type of landholding under Uttar Pradesh's land laws). Under Section 154-B of the Zamindari Abolition Act, sale of such land to a non-agriculturist requires government permission. The Court held that this restriction applies only to the execution of the sale deed, not to the agreement for sale — because an agreement for sale does not transfer ownership or create any interest in the land under Section 54 of the Transfer of Property Act.

The decree was made contingent on obtaining government permission. The Court directed that Preetam Singh (or his legal representatives) must apply for permission within three months. If permission is granted, the sale deed must be executed. If permission is refused, the alternative decree would be a refund of the advance with interest. If the defendants fail to apply for permission, a court commissioner can be appointed to execute the sale deed on their behalf.

What this means for you

Three lessons emerge from this judgment. First, a registered agreement for sale is a powerful document — it puts the entire world on notice, including later buyers. Second, a party who claims a written contract is a sham must plead it specifically; vague allegations will not work. Third, if you are a subsequent purchaser of property, always check the register of agreements — constructive notice can defeat your claim of being a bona fide buyer.

THE PLAY: When buying property, search not just the register of sale deeds but also the register of agreements for sale — a registered agreement can bind you even if you had no actual knowledge of it.

The land was never sold to the original buyers. But the Supreme Court made sure that Karan Singh got his half.