KANCHAN G. ROHIRA v. NIRMAN CONSTRUCTIONS PVT.LTD.
Discretionary Denial of Specific Performance and the Strict Requirements for Establishing Constructive Notice of Registered Agreements against Subsequent Bonafide Purchasers.
Court: Bombay High Court
Citation: 2026:BHC-OS:7864-DB
Decision Date: 02-04-2026
List of Laws
Specific Relief Act, 1963; Transfer of Property Act, 1882; Indian Registration Act, 1908; Indian Evidence Act, 1872; Code of Civil Procedure, 1908
- Facts: The Plaintiff (Kanchan Rohira) entered into a registered agreement for sale in 1977 with Defendant No. 1 (Nirman Constructions) for a flat. Due to internal disputes within the developer company and delayed construction, the Plaintiff did not pay the full balance as per the initial schedule, but construction was only completed in 1981. In September 1981, the developer unilaterally terminated the agreement and forfeited the advance. The flat was subsequently sold to Defendant No. 3 and then to Defendant No. 4 (Suresh Dhoot) in 1986. Defendant No. 4 took possession, paid valuable consideration, and conducted a search of records which did not reveal any pending "lis pendens" notice. The Plaintiff sued for specific performance or, in the alternative, damages.
- Procedural Posture: The Trial Court partly decreed the suit, denying specific performance but awarding damages of Rs. 1,52,250 and return of the advance with interest. The Plaintiff appealed (Appeal No. 171/2010) against the refusal of specific performance, and Defendant No. 4 appealed (Appeal No. 490/2010) against findings that he was not a bonafide purchaser without notice.
- Issue: 1. Whether the Plaintiff proved readiness and willingness despite delayed payments. 2. Whether registration of an agreement constitutes "constructive notice" under Section 3 of the Transfer of Property Act if all procedural requirements of the Registration Act are not explicitly proven. 3. Whether the court properly exercised its discretion under Section 20 of the Specific Relief Act to deny specific performance.
- Holding: The High Court dismissed the Plaintiff's appeal and confirmed the Trial Court's decree. It held that while the Plaintiff was ready and willing, specific performance was rightly denied. It further held that Defendant No. 4 was a bonafide purchaser for value without notice.
- Reasoning: The Court reasoned that for "constructive notice" under Explanation I to Section 3 of the Transfer of Property Act to apply, a plaintiff must prove not just registration, but also that the instrument was duly entered in the books and indexed under the Registration Act. Since the Plaintiff failed to prove these additional steps, constructive notice could not be imputed to Defendant No. 4. Furthermore, under Section 20 of the Specific Relief Act (pre-2018 amendment), the court has discretion to deny specific performance if it causes disproportionate hardship. Given that Defendant No. 4 had been in possession for nearly 40 years, had paid full value, and the Plaintiff had only paid a small advance, the balance of equity favored denying specific performance and awarding damages instead.
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