Unregistered agreement for sale cannot compel conveyance, but leave may still be granted to pursue specific performance.

An unregistered and insufficiently stamped agreement for sale does not by itself establish title or justify a demand for disclaimer of a company's share in property or compel execution of a registered conveyance in liquidation-related proceedings. The claimed proprietary interest was not clearly proved, and the materials raised doubt about the transaction, so the disclaimer and conveyance request was rejected. However, leave to institute a suit or proceeding for specific performance was granted because such liberty merely allowed the claimant to pursue contractual rights in the proper forum and did not itself confer any substantive right.

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Issues: (i) Whether the applicant could seek disclaimer of the company's half share in the property and insist on execution of a registered conveyance on the basis of an unregistered agreement for sale; (ii) Whether leave should be granted to institute a suit or proceeding for specific performance of the agreement for sale.

Issue (i): Whether the applicant could seek disclaimer of the company's half share in the property and insist on execution of a registered conveyance on the basis of an unregistered agreement for sale.

Analysis: The claim was found to rest on an unregistered and insufficiently stamped agreement for sale, and the applicant had not established a clear proprietary right in the property. The applicant's presence was not reflected when possession was taken, municipal records did not recognise it, and the materials relied upon created serious doubt about the transaction. A mere agreement for sale was held not to confer title, and the relief of disclaimer under Section 535 of the Companies Act, 1956 could not be used to compel conveyance without first establishing an enforceable right.

Conclusion: The request for disclaimer and for execution of conveyance was not accepted.

Issue (ii): Whether leave should be granted to institute a suit or proceeding for specific performance of the agreement for sale.

Analysis: The prayer for leave was treated as a request only to enable the applicant to establish its rights in accordance with law. At that stage, the Court considered it inappropriate to refuse access to a civil remedy outright, especially since no right was being adjudicated or conferred by granting such liberty. The issue was considered in the context of Section 446 of the Companies Act, 1956.

Conclusion: Leave to institute a suit or proceeding was granted.

Final Conclusion: The application seeking disclaimer and conveyance failed, but the applicant was permitted to pursue its claim for specific performance in accordance with law.

Ratio Decidendi: An unregistered agreement for sale does not by itself establish title or entitle the claimant to compel conveyance in liquidation proceedings, though liberty may be granted to seek adjudication of contractual rights in a proper forum.

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