8 January 2025 - Legal Updates

1. Until Sale Deed is Registered, Ownership of Immovable Property isn’t Transferred: Supreme Court

The Supreme Court has emphasized that ownership of immovable property is not transferred unless the sale deed is registered. Simply transferring possession and making the payment of consideration does not result in the transfer of ownership unless the sale deed is formally registered. Referring to Section 54 of the Transfer of Property Act, 1882, a bench led by Justice BV Nagarathna and Justice NK Singh highlighted that the provision mandates the transfer to be carried out only through a registered instrument. The use of the word "only" in this context indicates that for immovable property worth one hundred rupees or more, the sale becomes legally valid only when executed through a registered instrument.

The Court stated, "If the sale deed requires registration, ownership is not transferred until the deed is registered, even if possession is handed over and consideration is paid without registration. Registration of the sale deed for immovable property is crucial to finalize and authenticate the transfer. Ownership does not pass until the registration is completed." The judgment in Babasheb Dhondiba Kute vs. Radhu Vithoba Barde (2024 LiveLaw (SC) 225) was referenced, which held that "the conveyance of property through sale occurs only upon the registration of the sale deed, as per Section 17 of the Registration Act, 2008." Until the registration is completed, there is no conveyance in the eyes of the law.

The bench made these remarks while approving the auction sale in favor of the auction purchaser under the SARFAESI Act. An objection was raised by a party who claimed possession of part of the secured asset. The bench dismissed this objection, noting that the objector did not have a registered sale deed in their favor. The objector's claim was based on an unregistered agreement to sell and a General Power of Attorney. Since the agreement was unregistered, the Court pointed out that neither the bank nor the auction purchaser could have discovered it, even with due diligence.

The Court observed, "Therefore, all the documents relied upon by Respondent No. 2 to assert ownership of the basement of the secured asset are unregistered and do not satisfy the requirements for a valid sale under Section 54 of the Transfer of Property Act. As a result, Respondent No. 2 had no legal title to claim ownership of the basement of the secured asset."

Case- Sanjay Sharma vs. Kotak Mahindra Bank Ltd.

2. Offence of Grievous Hurt By Dangerous Weapons (Section 326 IPC) Can be Compromised In Exceptional Circumstances: Supreme Court

The Supreme Court observed that although Section 326 (punishment for grievous hurt by dangerous weapons) of the Indian Penal Code, 1860, (Section 118 of BNS) is non-compoundable, the Court can, in exceptional cases, use its inherent powers to give effect to a compromise. This includes situations where there is a voluntary settlement between the parties.

"Considering the amicable settlement and the complainant's clear consent, as demonstrated by the Interlocutory Application, this Court finds it appropriate to grant the present M.A. While the offense under Section 326 IPC is non-compoundable according to the Criminal Procedure Code, 1973, the exceptional circumstances in this case, including the voluntary settlement, justify the exercise of this Court's inherent powers to uphold the compromise."

A bench consisting of Justices Vikram Nath and Prasanna B. Varale was hearing an application filed in an appeal challenging the conviction of the present petitioner.

To provide some context, a complaint was filed stating that the accused individuals had formed an unlawful assembly and attacked the complainant and his family members, causing grievous injuries. As a result, the Trial Court convicted the accused persons for the offense of grievous hurt. When the case reached the High Court, the sentence was reduced to one year, and the compensation amount was increased. In light of this, the accused/petitioner filed a Special Leave Petition, which was dismissed in his favor last year.

Following this, in the same appeal, the petitioner filed an application seeking relief for compounding the offense. He argued that a compromise had been reached between the parties and that all disputes had been amicably resolved. The complainant also supported the petitioner's claim. The Court took several factors into account, including the close proximity of both parties' residences and the potential impact of any ongoing hostility on the neighborhood.

"The complainant and the petitioner live in close proximity, with only a road separating their homes, making it crucial to maintain a harmonious relationship between the two families. The parties are also distantly related, and any ongoing hostility could disrupt the social harmony of their neighborhood. The compromise not only addresses the criminal case but also resolves related property disputes, including a long-standing issue regarding the right of way. The petitioner's commitment to paying the agreed compensation demonstrates a sincere effort to resolve the conflict and honor the terms of the settlement," the Court remarked.

Additionally, the Court noted that the complainant's support for the settlement reflects the voluntary nature of the resolution. Considering these factors, the Court allowed the present application and reduced the sentence to the period already served.

Case- H.N. Pandakumar vs. The State of Karnataka

3. Right to Appeal Against Conviction is Also a Fundamental Right, Can’t Be Dismissed On Delay Without Examining Reasons For Delay: Supreme Court

The Supreme Court observed that the right to appeal against a conviction is a statutory right provided to the accused under Section 374 of the Cr.P.C. (Section 415 of BNSS) and a properly justified delay in filing the appeal cannot be a valid reason for its dismissal.

"The right to appeal from a judgment of conviction that impacts a person's liberty, especially in light of the broad interpretation of Article 21, is also a Fundamental Right," the Court noted.

The bench, consisting of Justice BV Nagarathna and Justice N Kotiswar Singh, was hearing an appeal against the Madhya Pradesh High Court's decision to dismiss the Appellant's appeal due to a delay of 1637 days in filing the appeal against the conviction.

The Appellant had also filed a delay condonation application along with the appeal, providing an explanation for the delay. He stated that the delay was due to a lack of financial resources and his need to travel out of station to earn a livelihood.

The High Court interpreted this explanation as an indication that the appellant had absconded after the judgment was passed and, therefore, was not inclined to condone the delay in filing the appeal. As a result, the appeal was dismissed, and the sentence imposed by the trial court became final.

Dissatisfied with the High Court's decision, the Appellant approached the Supreme Court.

Overturning the High Court's decision, the Court observed that the High Court had made an error by dismissing the appeal solely on the grounds of delay, without adequately considering the reasons for the delay.

The Court emphasized that the right to appeal, especially when it pertains to an individual's liberty, is a fundamental right under Article 21 of the Constitution.

The Court observed, "In Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd., (2007) 6 SCC 528, this Court stated that an appeal is an undeniable statutory right, and an offender who has been convicted is entitled to exercise the right of appeal under Section 374 of the Criminal Procedure Code. The right to appeal from a judgment of conviction, especially when it affects a person’s liberty, is also a fundamental right under the expansive interpretation of Article 21. In Rajendra v. State of Rajasthan, (1982) 3 SCC 382 (2), it was noted that when an appellant provides reasons for the delay in filing an appeal, the court should not dismiss the appeal as time-barred without examining those reasons. Therefore, it is clear that the right to appeal, particularly in matters concerning an individual’s liberty, is a fundamental right under Article 21 of the Constitution. The High Court's decision to dismiss the appeal solely due to delay, without considering the reasons for the delay, calls for reconsideration. The delay in filing the appeal should have been examined substantively rather than dismissing the appeal on technical grounds, which was an error."

Consequently, the Court allowed the appeal, condoned the delay in filing the appeal against the conviction, and remanded the matter back to the High Court for disposal of the Criminal Appeal on its merits and in accordance with the law.

Case- Mahesh Singh Banzara vs. State of Madhya Pradesh

4. Section 21 CPC | Objections To Place Of Suing Can’t Be Allowed Unless Taken In Court of First Instance At Earliest Opportunity: Supreme Court

The Supreme Court ruled that objections to jurisdiction under Section 21 of the Code of Civil Procedure, 1908 ("CPC") must be raised at the earliest opportunity, and no objection will be entertained at a later stage unless it results in injustice.

"The principle dictates that objections concerning the place of suing must be raised in the Court or tribunal of first instance at the earliest possible opportunity. In Harshad Chiman Lal Modi v. DLF Universal Ltd. and Anr., this Court held that if such objections are not raised promptly, they cannot be introduced at a later stage. These principles were reaffirmed by this Court in Subhash Mahadevasa Habib v. Nemasa Ambasa Dharmadas (Dead) by LRS. and Ors.," the Court noted.

The bench, consisting of Chief Justice Sanjiv Khanna and Justice Sanjay Kumar, was hearing an appeal against the Calcutta High Court's decision, which had overturned the National Company Law Tribunal's (NCLT) order rejecting a recall application that challenged the admission of the appellant's insolvency petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("IBC").

The appellant, Punjab National Bank (PNB), had filed an application under Section 7 of the IBC to initiate the Corporate Insolvency Resolution Process (CIRP) against Respondent No. 2. The NCLT in Kolkata admitted the application because the company’s registered office was in Kolkata, and the company had not informed PNB about its change of address to Cuttack. Furthermore, the company had participated in the proceedings before the NCLT in Kolkata.

Subsequently, Respondent No. 2 filed an application under Section 21 of the CPC, seeking to recall the NCLT's order admitting the insolvency petition, arguing that the NCLT, Kolkata, did not have jurisdiction due to the change in the company's registered address from Kolkata to Cuttack. After the NCLT, Kolkata, dismissed the recall application, Respondent No. 2 moved the Calcutta High Court under Article 227 of the Constitution. The High Court overturned the NCLT's order rejecting the recall application.

Dissatisfied with the High Court's decision, the Appellant approached the Supreme Court.

Overturning the High Court's ruling, the Supreme Court observed that the High Court had made an error by invoking its jurisdiction under Article 227 of the Constitution. The Court pointed out that since the respondents were aware of the proceedings initiated by the Appellant before the NCLT Kolkata, they should have promptly raised objections under Section 21. The Court further stated that their failure to notify the Appellant about the address change would prevent them from raising jurisdictional objections at a later stage.

The Court stated that the High Court's decision to overturn the NCLT order did not properly acknowledge these facts and failed to give sufficient consideration to the limited scope of jurisdiction under Article 227.

"In our view, the High Court overlooked the restricted role and jurisdiction of superintendence when exercising power under Article 227 of the Constitution, as well as the need to fully examine the relevant facts and the potential consequences of setting aside the admission order under the IBC," the Court observed.

Case- Punjab National Bank vs. Atin Arora & Anr.