Unregistered Sale Agreement Gives No Right to Possession—Madras High Court Rejects Injunction Against Property Owners

Litigation Cannot Be Used as a Shield for Illegal Possession—Law Protects Lawful Ownership, Not Encroachment - In a decisive ruling on March 7, 2025, the Madras High Court dismissed a civil revision petition filed by Kamalesh Chandrasekaran, ruling that an unregistered sale agreement does not grant any legal right to possession against the rightful owner. The Court upheld the orders of the XVI Assistant City Civil Court and the XVIII Additional City Civil Court, Chennai, which had refused to grant an injunction preventing the sale of a disputed property in Mylapore.
Dismissing the plea, the Court made it clear that "possession must have a legal foundation, and when a person holds no title, they cannot seek the protection of the court to obstruct the rightful owner. The law will not shield acts of encroachment under the guise of pending litigation."
"Property Dispute Over a Failed Sale Agreement—Did the Petitioner Invest in Good Faith or Attempt to Seize Control?"
The case revolved around a vacant land in Mylapore, where the original owners, Noor Jehan Beevi, K.A. Shaik Madar, and Abdul Hassan, had entered into an unregistered sale agreement with Kamalesh Chandrasekaran on February 6, 2023, for ₹7.25 crores. The petitioner claimed that he had paid ₹1 crore as an advance and had also spent ₹1.25 crores to evict encroachers from the land, believing he would acquire full ownership.
According to Kamalesh, the defendants reneged on their commitment and instead attempted to sell the land to a third party at a higher price. He approached the court, seeking an injunction to restrain the owners from selling the property, arguing that his financial investment and efforts in clearing encroachments gave him a right to possession.
The defendants, however, contended that the agreement had expired due to non-performance. They accused Kamalesh of forcibly occupying the land despite having no legal claim and misusing the court process to delay the legitimate sale of the property.
"Possession Without Legal Title Cannot Be Protected—Court Denies Injunction"
Rejecting the petitioner’s claim, the Court ruled that "a person holding an unregistered sale agreement cannot claim possession against the lawful owner. Courts are bound to uphold the rights of legitimate title holders and cannot encourage land grabbing through dubious legal claims."
The Court further observed that "financial investment made by a prospective buyer under a failed contract does not entitle them to claim possession over the property. Their remedy lies in seeking a refund, not in obstructing the rightful owner’s ability to deal with the land."

"Ethical Breach by Advocate Raises Concerns—Court Takes Serious Note of Allegations of Legal Misconduct"
During the proceedings, the Court took note of serious allegations against the petitioner’s counsel, Ms. Preethi Baskar, who was accused of unethical legal conduct. It was alleged that she had previously represented the original owners in eviction proceedings but later switched sides to represent Kamalesh, playing a dual role in the dispute.
Expressing strong disapproval, the Court remarked that "an advocate must adhere to professional ethics and maintain integrity in legal practice. When an advocate represents both sides in a contentious matter and facilitates transactions between opposing parties, it raises serious concerns of conflict of interest that warrant investigation by the Bar Council."
"Property Disputes Cannot Be Used to Stall Lawful Transactions—Court Orders Police Inquiry into Allegations of Encroachment"
The Court examined the Assistant Commissioner of Police’s report, which suggested that Kamalesh had installed notice boards on the property, falsely claiming litigation was pending, and attempted to intimidate prospective buyers. The Court held that "litigation cannot be used as a tool for coercion. If an individual unlawfully enters a property and then claims protection under a pending case, it amounts to trespass, which must be dealt with strictly under the law."
Taking serious note of these findings, the Court directed the police to investigate allegations of criminal intimidation and trespass, warning that the judicial process must not be exploited for wrongful gain. The Court emphasized that "property disputes should be settled through legal mechanisms, not through unlawful occupation and coercive tactics."
"No Right to Injunction Without Legal Possession—Court Dismisses Petition"
Refusing to interfere with the lower court's findings, the High Court dismissed the petition and reaffirmed the rightful owners' ability to deal with their property without obstruction. The Court concluded that "when a contract fails, a party cannot claim possession simply because they invested money. The legal remedy lies in seeking damages or compensation, not in disrupting the property rights of the true owner."
Dismissing the plea, the Court made it clear that "the law does not recognize rights based on expired agreements, nor does it allow litigation to be misused as a shield for unlawful possession. A person cannot hold a property hostage merely by claiming financial expenditure; possession must be legally justified."
 

Date of Decision: 07 March 2025