Parties Need to Submit Encumbrance Certificate with Plaint to Prevent Multiple Proceedings: Andhra Pradesh High Court in Property Case.

The Andhra Pradesh High Court highlighted that in property disputes, parties should submit an encumbrance certificate with the Plaint to prevent multiple legal proceedings. This was noted in a Civil Revision Petition against a Family Court order regarding a suit for specific performance of a sale agreement. Justice Subba Reddy Satti, in a Single Bench, stated, “Past cases indicate that in partition suits, even at the final decree stage, innocent buyers often file petitions to be included after learning about the preliminary decree. The same applies to suits for declarations and perpetual injunctions. To reduce the number of proceedings, parties must include the encumbrance certificate with the plaint, which will simplify future legal issues. Courts may also instruct parties to submit these certificates early in the process, as it benefits everyone involved.”

The Bench also noted that both litigants and lawyers should remember their equal roles in justice. Lawyers, like judges, must work to ensure that truth prevails. Advocate Aravala Ramarao represented the Petitioner, while no one appeared for the Respondents. In this case, the Plaintiff and Defendant had an agreement for a sale price of Rs. 19,30,000/-. The Plaintiff initially paid Rs. 2,00,000/- as an advance, with the remaining amount due by December 2015. The Defendant later asked the Plaintiff for additional funds, leading her to pay Rs. 2,50,000/- through her husband, who received a receipt written by him.

The Defendant later received Rs. 1,50,000 from the Plaintiff’s husband and issued a receipt in front of witnesses. This receipt was written by the Defendant’s husband, bringing the total amount received to Rs. 6,00,000. The Defendant did not fulfill her part of the contract, leading the Plaintiff to send a legal notice. Consequently, a lawsuit was filed. After the Application was dismissed, a Revision was submitted to the High Court. The High Court, after hearing both parties, stated, “In a suit for specific performance, only the contracting parties are usually necessary. The Court does not address third-party rights. However, in this case, the buyer of the property from the same seller is also a necessary party. Including the buyer after the sale agreement can save valuable court time. This is not difficult if one checks the encumbrance certificate, which shows all registered transactions. The need to include the subsequent buyer as a party defendant is discussed further.”

The Court also mentioned that if the right parties are included, time spent on interim applications can be reduced, whether during the lawsuit or after the judgment, which may also build public trust in the legal system. “Let the litigants not lose faith in the system,” it added. “In P. Ramasubbamma Vs. V. Vijayalakshmi, the Hon’ble Apex Court ruled that in a specific performance suit, the agreement holder does not need to cancel the sale deed made to a later buyer. It is enough to include the later buyer in the suit and seek specific performance against the original owner, along with a request for the later buyer to participate in the execution of the sale deed to fully transfer the title to the agreement holder,” it further noted.

The Court stated that the new buyers of the property involved in the case are necessary parties for a fair resolution. Since the Plaintiff delayed filing the application, it is fair to impose costs for justice. The trial Court did not use its authority properly, so the order being reviewed should be canceled. Therefore, this Civil Revision Petition is approved, with the Plaintiff required to pay Rs.25,000 (Rupees twenty-five thousand only) to the District Legal Services Authority in Srikakulam within three weeks of receiving this order. If the Plaintiff does not pay on time, the Court’s order will be canceled without any further notice. As a result, the High Court accepted the Civil Revision Petition and overturned the previous order.

Cause Title- Golivi Ramanamma v. Challa Lakshmi & Ors.