Karnataka High Court

B.N Anantha vs Shri, Vijayakumar P. Gowda on 5 August, 2025

                                                 -1-
                                                               NC: 2025:KHC:30308
                                                             MFA No. 5227 of 2025


                      HC-KAR



                           IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                               DATED THIS THE 5TH DAY OF AUGUST, 2025

                                               BEFORE
                       THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR
                      MISCELLANEOUS FIRST APPEAL NO. 5227 OF 2025 (CPC)
                      BETWEEN:

                      1.     B.N. ANANTHA
                             S/O SRI. B. NAGARAJU
                             AGED 39 YEARS
                             R/O KRISHNA NILAYA, NO.1462
                             NORTH EXTENSION, HASSAN

                      2.     SHRI. REVANNA
                             S/O LATE SRI. DEVAPAGOWDA
                             AGED ABOUT 64 YEARS
                             R/O NO.MIG 981, 2ND MAIN
                             KARNATAKA HOUSING BOARD
                             CHANNAPATTANA EXTENSION
                             HASSAN
                                                                  ...APPELLANTS
                      (BY SRI. MANU K, ADVOCATE)

Digitally signed by   AND:
ANJALI M
Location: High
Court of              1.     SHRI. VIJAYAKUMAR P. GOWDA
Karnataka
                             S/O LATE SRI. PUTTEGOWDA
                             AGED ABOUT 55 YEARS

                      2.     SMT. KUMARI VIJAYA GOWDA
                             W/O SRI. VIJAYAKUMAR P. GOWDA
                             AGED ABOUT 51 YEARS

                             BOTH R/O DOOR NO.25, ROJIPURA
                             4TH WARD, VINAYAKA NAAGARA
                               -2-
                                             NC: 2025:KHC:30308
                                        MFA No. 5227 of 2025


HC-KAR



     DODDABALLAPUR
     BANGALORE- RURAL
                                                ...RESPONDENTS

(BY SRI. MITHUN GERAHALLI, A, ADVOCATE FOR C/R1 & R2)
     THIS MFA IS FILED U/O.43 RULE 1(r) OF CPC, AGAINST
THE ORDER DT.09.04.2025 ON IA NO.2 IN O.S.NO.66/2024 ON
THE FILE OF THE SENIOR CIVIL JUDGE AND JMFC,
ARAKALAGUD, REJECTING IA NO.2 FILED U/O.39 RULES 1 AND
2 OF CPC


     THIS MFA HAVING BEEN RESERVED FOR JUDGMENT,
COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT,
DELIVERED/PRONOUNCED THE FOLLOWING:


CORAM:    HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR

                      CAV JUDGMENT

(PER: HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR)

This Miscellaneous First Appeal is preferred by the

appellants herein under Order XLIII Rule 1 (r) of the Code

of Civil Procedure, 1908, (for short, "CPC") challenging the

order dated 09.04.2025 passed by the learned Senior Civil

Judge and J.M.F.C., Arakalagud in O.S.No.66/2024,

whereby the learned trial Court rejected interlocutory

application No. II filed under Order XXXIX Rules 1 and 2 of

CPC, praying for a temporary injunction to restrain the

NC: 2025:KHC:30308

HC-KAR

respondents from alienating or encumbering the suit

schedule properties pending adjudication of the main suit.

2. The facts leading to the filing of the suit and the

instant appeal are rooted in an arrangement between the

parties for joint development of immovable property

situated at Shiradanahalli village, Mallipatna Hobli,

Arakalagud Taluk, Hassan District. The suit schedule

properties comprise lands in survey Nos.85, 86 and 87

totally measuring 8 acres 03 guntas. These lands initially

classified as agricultural, were converted for non-

agricultural residential use pursuant to an order dated

06.02.2020 issued by the Deputy Commissioner, Hassan.

Thereafter, the respondent proposed to develop the said

lands into residential sites and entered into certain

agreements with the appellants to facilitate the

development and sale of the layout.

3. On 24.03.2022, a registered agreement of sale

was executed between the appellants and respondents,

NC: 2025:KHC:30308

HC-KAR

whereby the respondents agreed to sell a portion of the

developed layout - specifically, 92,600 square feet of the

residential sites, for a total sale consideration of

Rs.2,42,00,000/-(Rupees two crores forty-two lakhs only).

The appellants paid a sum of Rs.15,00,000/- (Rupees

fifteen lakhs only) through RTGS as an advance towards

the sale consideration. The very next day, on 25.03.2022,

the parties executed a Joint Development Agreement

(JDA), which though unregistered, outlined the terms of

development of the land by the appellants at their own

expense in exchange for 49% of the developed land.

Under this arrangement, the appellants invested an

additional Rs.75,00,000/- (Rupees seventy five lakhs only)

taking the total monetary outflow to Rs.90,00,000/-

(Rupees ninety lakhs only) as per the documents on

record.

4. The appellants further claim to have expended

Rs.20,00,00,000/- (Rupees twenty crores only) towards

development activities, including labour, material

NC: 2025:KHC:30308

HC-KAR

procurement, laying of roads, installation of drainage and

water systems, construction of a park, and electrical

connections. As part of these works, the appellants also

made payments to the Electricity Department to the tune

of Rs. 14,66,610/- and Rs. 14,787/- respectively, towards

layout related electricity connections and meter

installations.

5. Despite these substantial investments and

efforts, the respondents allegedly failed to fulfil their

reciprocal obligations under both the agreement of sale

and the JDA. The appellants asserts that repeated

requests for execution and registration of the Sale Deed

went unheeded, and instead the respondents started

negotiating with the third parties and even began

alienating parts of the developed layout, thereby

frustrating the rights of the appellants and undermining

their Investments. A legal notice dated 20.07.2024 was

issued by the appellants, calling upon the respondents to

honour their commitments. The respondents however,

NC: 2025:KHC:30308

HC-KAR

responded with the categorical denial and issued a public

notice on 01.08.2024 indicating revocation of the

agreement of sale.

6. It is alleged that, aggrieved by these actions,

the appellants instituted a suit in O.S.No.66/2024 before

the trial Court seeking a specific performance of the

agreement of sale and for other appropriate reliefs. In the

said suit, they also filed I.A.No. II under Order XXXIX

Rules 1 and 2 of CPC, seeking temporary injunction to

restrain the respondents from alienating or encumbering

the suit schedule properties during the pendency of the

suit. The trial Court, by the impugned order dated

09.04.2025, dismissed the said application on three

primary grounds: Firstly, that the joint development

agreement was unregistered and therefore not

enforceable, secondly, that the appellants had failed to

make out a prima facie case or demonstrate the balance of

convenience in their favour and thirdly, that the

agreement of sale and the joint development agreement

NC: 2025:KHC:30308

HC-KAR

contained contradictory terms and could not co-exist

legally.

7. The appellants contended that, the trial Court's

reasoning is flawed both in law and on the facts. It is

argued that the agreement of sale, being a registered

document, is valid and binding. The joint development

agreement, though unregistered, can nevertheless be

relied upon for collateral purposes and to demonstrate the

nature of the transaction and the conduct of the parties.

The appellants rely on the decision of the Hon'ble Supreme

Court in Murugugandam vs. Muniyani (Died) through

Lrs. reported in 2025 INSC 652, wherein it was held

that, an unregistered document may be admissible as

evidence in a suit for specific performance, particularly for

proving the conduct of the parties and part performance

under the Section 49 of the Registration Act, 1908.

8. The learned counsel for the appellants further

argued that, these appellants have not only paid

NC: 2025:KHC:30308

HC-KAR

substantial consideration but also invested heavily in the

development of the layout, which has been partially

admitted by the respondents in their reply. He would

further submit that, allowing the respondents to alienate

the properties during the pendency of the suit would

render the main suit infructuous and lead to multiplicity of

proceedings, thereby causing irreparable injury which

cannot be compensated in monetary terms.

9. On the other hand, the learned counsel for the

respondents contend that, these respondents have taken a

stand that the appellants have no enforceable right as the

joint development agreement was unregistered and hence

invalid. It is further submitted that, the appellants had

agreed to revoke the agreement and accepted a refund of

Rs.1,11,91,000/-, thereby extinguishing any cause of

actions. The respondents also emphasized that, the

prayers in the plaint are contradictory in nature and

disentitles the appellants from equitable relief under the

specific relief Act.

NC: 2025:KHC:30308

HC-KAR

10. I have carefully examined the impugned order,

the pleadings, the documents placed on the record, and

rival submissions advanced at the bar. It is settled law

that, for the grant of temporary injunction under Order

XXXIX Rules 1 and 2 of CPC, the applicant must satisfy

three cardinal principles - existence of a prima facie case,

balance of convenience in their favour, and the likelihood

of irreparable harm if the injunction is not granted.

11. Upon perusal of the Agreement of Sale dated

24.03.2022, it is evident that, the appellants were bona

fide purchasers/investors. The payment receipts, bank

transaction details and electricity bills substantiate the

claim that the appellants had made substantial financial

investments pursuant to the agreement. The joint

development agreement though unregistered,

supplements the agreement of sale and explains the mode

and method by which the sale was to be effectuated. The

reliance upon the Murugugandam (Supra) is well placed,

as the said decision verifies that unregistered document

- 10 -

NC: 2025:KHC:30308

HC-KAR

may still be admitted for evidence for establishing part

performance, possession and conduct of the parties.

12. The trial Court's mechanical rejection of the

joint development agreement solely on the ground of non

registration is legally unsustainable. The principle that an

unregistered document can still be used for collateral

purposes is well established and has been consistently

appeared in the catena of judgments.

13. The contention of the respondents that the

appellants have accepted a refund is a matter of evidence

and cannot be conclusively determined at the interlocutory

stage. The assertion of such a refund is disputed by the

appellants, and it would be premature for the trial Court to

draw adverse conclusions on the suspect without trial.

The trial Court's finding that the agreements are

contradictory is also erroneous. On a harmonious reading,

it becomes evident that, both agreements were part of a

composite transaction-first laying out the sale terms and

- 11 -

NC: 2025:KHC:30308

HC-KAR

second stipulating the mechanism for development and

sharing of developed sites.

14. In view of the rival submissions and on the

perusal of the material placed on record, I am of the

considered view that, the appellants have established a

strong prima facie case based on their monetary

investment, development activities undertaken, and the

documentation on record. The balance of convenience is

clearly in favour of the appellants, as allowing alienation or

third party sales would irretrievably affect their rights

under the agreement and render the suit ineffective.

Irreparable harm is evident from the risk of fragmentation

of rights, creation of third party interest, and the

possibility of future litigation. Monetary compensation at a

later stage cannot substitute the contractual and

development rights explained by the appellants.

15. The learned counsel for the appellants relied

upon the following judgments:

- 12 -

NC: 2025:KHC:30308

HC-KAR

(i) Ambalal Sarabhai Enterprises Limited V/s K S Infraspace LLP Limited and Another -

AIR 2020 Supreme Court 307

(ii) Sucha Singh Sodhi (Dead) through legal representatives v. Baldev Raj Wali and Another - (2018) 6 SCC 733

(iii) Nitin Marutrao Kale and Another v.

Manikrao Bajirao Malgunde and Others - , 2025 SCC OnLine Bom 34

16. The facts of these cases are quite different than

the facts of the said case.

17. The trial Court has erred in not appreciating the

factual matrix in its entirety and has misapplied the law on

admissibility and enforceability of unregistered document.

It is the finding that, no prima facie case or irreparable

injury exists is contrary to the material placed on record.

18. Accordingly, this Court finds in the appeal that,

the impugned order dated 09.04.2025, passed by the trial

Court is liable to be set aside. The interlocutory

application No. II filed under Order XXXIX Rules 1 and 2 of

CPC deserves to be allowed. However, rights of the

- 13 -

NC: 2025:KHC:30308

HC-KAR

parties are kept open to be agitated during the course of

the trial. Resultantly, the following:

ORDER

(i) The appeal is allowed.

(ii) The impugned order dated 09.04.2025

passed by the Senior Civil Judge and

J.M.F.C., Arakalagud, in O.S.No.66/2024

is hereby set aside.

(iii) I.A. No. II filed by the appellants is

allowed. The respondents, their agents,

servants or any person claiming through

them are hereby restrained from

alienating, encumbering or creating third

party interest in the suit schedule

properties pending final disposal of the

suit in O.S.No.66/2024.