Agreement to Sell Can Still Protect Property: P&H High Court Upholds Injunction Against Creation of Third-Party Rights
Case Name: Gaurav Singla v. Gurmesh Vij & Anr.
Date of Judgment: 06 April 2026
Citation: CR-9926-2025
Bench: Justice Virinder Aggarwal
Held: The Punjab & Haryana High Court held that even though an agreement to sell does not create any proprietary right in immovable property, courts can grant interim injunction restraining creation of third-party rights to preserve the subject matter of a suit for specific performance.
Summary: The petitioner challenged concurrent orders of the Trial Court and Appellate Court granting interim injunction in a suit for specific performance, restraining him from alienating or creating third-party rights in the suit property.
The dispute arose when the plaintiff claimed rights under an agreement to sell and alleged that the original owner subsequently executed sale deeds in favour of the petitioner to defeat his contractual rights. The petitioner, claiming to be a bona fide purchaser, opposed the injunction on the ground that an agreement to sell does not create any right in property.
The Court examined the settled principle that an agreement to sell creates only a right in personam and not any proprietary interest. However, it distinguished the applicability of that principle in the context of interim relief.
It held that the purpose of granting injunction under Order XXXIX Rules 1 and 2 CPC is to preserve the property and prevent multiplicity of litigation during pendency of the suit. Even if the plaintiff does not have ownership rights, he has a legally enforceable right to seek specific performance.
The Court observed that if the property is further transferred during the pendency of the suit, it would complicate proceedings and potentially render the final decree ineffective. Therefore, restraining the defendant from creating third-party interests is justified.
It further noted that both courts below had exercised discretion judiciously and no perversity or illegality was shown warranting interference under Article 227.
Decision: The High Court dismissed the revision petition and upheld the interim injunction restraining the petitioner from creating third-party rights in the suit property during pendency of the suit.