Agreement to sell creates no proprietary interest, and contractual termination and forfeiture clauses remain enforceable on default.

An agreement to sell immovable property does not by itself create any interest, charge, or proprietary right in the property, so a company in liquidation and its alleged unit holders could not claim ownership through that agreement. Where the contract makes timely payment essential and expressly provides for termination, liquidated damages, and forfeiture on prolonged default, those contractual consequences may be enforced on default. Unsupported allegations of collusion did not alter the result, and revival-scheme claims failed because the company had no ownership in the lease plot. The respondent's right to prove actual loss was also preserved where necessary.

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Issues: (i) Whether an agreement to sell created any right or interest in the leasehold property in favour of the company in liquidation or its alleged unit holders. (ii) Whether the default under the agreement justified termination of the agreement and forfeiture of part of the consideration, and whether the alleged collusion and revival-scheme based claims altered that result.

Issue (i): Whether an agreement to sell created any right or interest in the leasehold property in favour of the company in liquidation or its alleged unit holders.

Analysis: A contract for sale of immovable property does not, by itself, create any interest in or charge on the property. The agreement to sell therefore did not transfer ownership or create any proprietary right in favour of the company in liquidation. The permission to take bookings under the agreement was only an enabling arrangement and did not confer a transferable right in the property on prospective buyers.

Conclusion: The issue was decided against the appellants and in favour of the respondent.

Issue (ii): Whether the default under the agreement justified termination of the agreement and forfeiture of part of the consideration, and whether the alleged collusion and revival-scheme based claims altered that result.

Analysis: The agreement made timely payment the essence of the contract and expressly provided for termination, liquidated damages, and forfeiture in the event of prolonged default. The company in liquidation had defaulted on the payment schedule, and the respondent had not waived its right to terminate. The allegations of collusion were unsupported by sufficient material. The claim that the property formed part of revival schemes also failed because the company in liquidation had no ownership in the lease plot. The court also noted that the respondent could not be denied an opportunity to prove actual loss where necessary.

Conclusion: The issue was decided against the appellants and in favour of the respondent.

Final Conclusion: The appeals were found to be without merit, and the order permitting release of the property was upheld in substance.

Ratio Decidendi: An agreement to sell immovable property does not create any proprietary interest in the property, and where the contract expressly treats timely payment as essential and provides for termination and forfeiture on default, the contractual consequences of default may be enforced according to their terms.

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