Case Law Analysis
|Andhra Pradesh High Court
Agreement of Sale as Loan Security Not Enforceable as Contract to Sell | Specific Performance Denied, Money Decree with Interest Mandated : Andhra Pradesh HC
The Andhra Pradesh High Court has ruled that an agreement of sale executed solely as security for a loan creates a creditor-debtor relationship, not a binding contract for transfer of property. Specific performance is unavailable; the rightful remedy is a money decree with pre-decree interest at 12% and post-decree interest at 6%, clarifying a critical boundary in property finance transactions affecting lenders and borrowers alike.