Punjab & Haryana High Court · Second Appeal · 13.01.2023
Joint owners who sign together are bound together
The Punjab and Haryana High Court held that where two brothers jointly agreed to sell their house and jointly took earnest money, part payment later accepted by one of them binds both, and the other could not escape specific performance because of a family dispute.
Key points
- Joint holders who executed an agreement and took earnest money together are not separate legal entities for that transaction.
- Part of the price later accepted by one co-owner was not in his individual capacity; it bound both.
- A later quarrel between the co-owners was no ground to avoid the agreement; the buyers had shown readiness and willingness, and the decree for specific performance was upheld.
The facts
Two brothers who jointly owned a house agreed in February 2011 to sell it, receiving ₹7 lakh as earnest money. The sale deed was not executed on the target date because the brothers fell out. One brother accepted further payments, endorsed on the agreement, and in April 2012 executed a sale deed for his half share. The other refused, arguing that the buyers had defaulted on the original date, that the payments to his brother did not bind him, and that he had not received the legal notice. Both lower courts decreed specific performance against him.
What the Court held
The High Court dismissed the second appeal. Since the agreement was executed and the earnest money accepted jointly, the later payments to one brother were not in his individual capacity and bound both of them as joint holders. The dispute between the brothers could not be used to wriggle out of the agreement. The defendant had himself not appeared before the Sub-Registrar on the original date; the legal notice to both brothers was proved; and the buyers had shown readiness and willingness, including by buying the other half. No substantial question of law arose.
Why it matters
Many flats are held jointly by family members. This judgment, while from another High Court, is a reminder that co-owners who sign an agreement together are treated as acting together. For societies, a transfer or membership application involving jointly held flats should be signed and consented to by all joint holders, and any objection by one of them should be dealt with on the documents rather than by the society taking sides.
Six-page judgment in English. This page summarises the decision for general information; it is not a substitute for the full text and not legal advice. Check whether the decision has since been appealed, modified or overruled.
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