Janak Dulari Devi
& ANR. Vs. Kapildeo Rai & ANR.
JUDGMENT
R.V.RAVEENDRAN, J.
1.
Plaintiffs
in a suit for specific performance, aggrieved by the judgment and decree of the
Patna High Court dated 3.1.2002 dismissing his second appeal against the decision
of the first appellate court dated 16.12.1997 dismissing their suit (in reversal
of the judgment and decree of the trial court dated 27.8.1990 decreeing the
suit) have filed this appeal by special leave.
2.
The
case of the appellants in brief is as under : The second respondent was the
owner of the suit property. The second respondent executed a sale deed dated
22.2.1988 (registered on 7.3.1988) in respect of the suit property in favour of
the appellants, for a consideration of Rs.22000/-; that Rs.17,000 was paid by
the appellants to the second respondent, at the time of execution and registration
of sale deed; that the balance of Rs.5000 was to be paid subsequently, when the
vendor requested for the said payment; that the second respondent retained the
registration receipt in regard to the sale deed, agreeing to deliver it to the
appellants against payment of the balance sale consideration; that on execution
of the sale deed, by the second respondent, his right, title and interest in
the suit property passed to the appellants and possession of the land sold was
also delivered to them; that subsequently the second respondent avoided receiving
the balance of Rs.5000 and failed to deliver the registration receipt; that the
appellants issued a legal notice calling upon the second respondent to deliver
the registration receipt so that they could collect the original registered sale
deed, but the second respondent send a reply denying the receipt of Rs.17000
and stating that the entire consideration was due; and that therefore, it
became necessary for the appellants to file the suit.
The appellants sought
a decree for a direction to the second respondent to deliver the registration
receipt relating to the sale deed dated 22.2.1988 by receiving the balance sale
consideration of Rs.5000 and that in case the second respondent had already
obtained the original sale deed from the office of the Sub-Registrar, then for
a direction to deliver the same to the appellant. The said suit was valued at
Rs.5000.
3.
The
second respondent filed his written statement. He alleged that he had agreed to
sell the property as he urgently required the money for celebrating the
marriage of his daughter; that he executed and registered the sale deed on 22.2.1988;
that the appellant did not pay any part of the consideration and the allegation
that he had paid Rs.17000 towards the sale price at the time of execution of
sale deed was false; that the appellants had played a fraud upon him by stating
in the deed that Rs.17000 was already paid towards the sale price and making him
to sign the sale deed without reading the deed; that when he demanded the sale price,
as the appellants stated that the sale consideration would be paid later, he retained
the registration receipt and did not deliver possession;
That it was the
intention of parties that title in the property should pass to the appellants
and possession should be delivered, only on payment of the consideration of
Rs.22000 by the appellants; that as the appellants failed to pay the sale
consideration, he cancelled the said sale deed dated 22.2.1988 on 18.3.1988 and
sold the property to the first respondent on 29.8.1988 for a consideration of
Rs.19000 and also delivered possession of the property to the first respondent
and ever since then the first respondent is in possession of the suit property.
He contended that as the
title and possession remained with him even after execution and registration of
the sale deed in favour of the appellants, and as the sale price was not paid,
he was justified in canceling/rescinding the sale and the appellants were not
entitled to any relief.
4.
The
subsequent purchaser (first respondent herein) was thereafter impleaded as the
second defendant in the suit. The court framed appropriate issues as to whether
a sale deed executed on 22.2.1988 was for consideration; whether Rs.17000 was
paid by the appellants towards the sale price at the time of execution of the
sale deed; whether the appellants had tendered the balance of Rs.5000 to the
second respondent; whether the sale deed was cancelled on 18.3.1988; whether the
second respondent had any right to execute a sale deed dated 29.8.1988 in
favour of the first respondent; whether the appellants were entitled to receive
the original sale deed dated 22.2.1988; whether the suit as framed was
maintainable and appellants had valid cause of action for the suit; and whether
the suit was barred by limitation. The appellant examined seven witnesses and the
defendant examined six witnesses. Both sides marked several documents.
5.
The
trial court by judgment dated 27.8.1990 decreed the suit with costs subject to
payment of court fee by the appellants, on Rs.22000. The trial court held that
the appellants had proved the payment of part sale price of Rs.17000 to second
respondent; that on the execution of the sale deed by the second respondent,
title passed to the appellants and the appellants were entitled to declaration
of title and recovery of possession. Feeling aggrieved the first respondent
filed an appeal.
The first appellate
court, by judgment and decree dated 16.12.1997, allowed the appeal and
dismissed the suit. It held that the plaintiffs/appellants had failed to prove
payment of Rs.17000 or of any part of the consideration; that as no part of the
sale price was paid and as the Registration Receipt and possession were retained
by the second respondent, the intention of parties was that title should not pass
to the appellants until payment was made; and that as a consequence of non-payment
of the price, the second respondent was justified in cancelling the sale deed
and selling the property to the first respondent. The second appeal filed by the
appellant, was dismissed by the High Court by the impugned judgment dated
3.1.2002, affirming the finding of facts recorded by the first 6appellate court.
The said judgment is challenged in this appeal by special leave.
6.
On
the contentions urged, the following questions arise for consideration in this
appeal :
i.
Whether
the appellants had paid Rs.17000/- towards sale price to second respondent?
ii.
Whether
title to the property passed to the appellants on execution of the sale deed?
iii.
Whether
the second respondent-vendor was justified in cancelling/ repudiating the sale
on the ground that the sale consideration was not paid?
iv.
Whether
the appellants are entitled to the relief claimed in the suit? Re: Question (i)
7.
In
the plaint, the specific plea of the plaintiffs-appellants in regard to payment
of Rs.17000 was that it was initially agreed that the consideration would not
be paid at the time of execution and registration of the sale deed, but would
be paid later, against exchange with the Registration Receipt; that the appellants
paid Rs.17000 to the second respondent at the time of registration of the sale deed;
and that though the appellants were ready to pay the balance of Rs.5000, the
second respondent stated that he would take the said amount when he needed it
in exchange of the registration receipt. But the evidence led by the appellants
was contrary to the pleadings. PW3 (the attesting witness to the sale deed),
PW4, PW6 (first plaintiff) and PW7 (husband of the first plaintiff) deposed
that a sum of Rs.17,000 was paid to the defendant at the residence of the first
plaintiff, that thereafter they went to the Sub-Registrar's office at Arrah and
got the sale deed written by the scribe - PW5, and that thereafter, the second respondent
executed the sale deed and got it registered.
The sale deed dated
22.7.1988 also recited that Rs.17000 was received by the vendor prior to the
execution of the sale deed and the balance of Rs.5000 was to be paid at the time
of transfer of Registration Receipt. The first appellate court after analyzing
the evidence held that the evidence was contrary to the pleadings and therefore
liable to be rejected. When what is pleaded is not proved, or what is stated in
the evidence is contrary to the pleadings, the dictum that no amount of
evidence, contrary to the pleadings, howsoever cogent, can be relied on, would
apply. The first appellate court also found that there was no endorsement in
the sale deed by the Sub-Registrar about payment of Rs.17000 in his presence,
nor any separate receipt existed to show the payment of Rs.17000 prior to the
preparation and the execution of the sale deed. The first appellate court
believed the evidence of DW1 (attesting witness to the sale deed) and DW4 8(the
second respondent) that they did not go to the residence of the first appellant
on 22.2.1988, but had gone directly to the Sub-Registrar's office; that by then
the sale deed had already been got written by the first appellant's husband;
that the sale deed was not read over to them; that the second respondent was informed
that the sale price would be paid subsequently at the village and that sale
could be completed and possession be delivered on payment and exchange of the
Registration Receipt.
The first appellate court
also noted that the appellants alleged that there were two independent witnesses
present at the relevant time, namely Dharmanand Pandey and Bindeshwar Pandey,
but neither of them was examined. The first appellate court also referred to
the recitals in the sale deed and the manner of the execution of the sale deed and
concluded that no part of the sale consideration had been paid. This finding of
fact recorded by the first appellate court, that the appellants had not established
the payment of Rs.17000, after consideration of the entire evidence, affirmed by
the High Court in second appeal, does not call for interference, in an appeal under
Article 136 of the Constitution in the absence of any valid ground for
interference. F8.Re: Questions (ii) and (iii)
8.
Where
the intention of the parties is that passing of title would depend upon the
passing of consideration, evidence is admissible for the purpose of
contradicting the recital in the deed acknowledging the receipt of
consideration. In Bishundeo Narain Rai vs. Anmol Devi & Ors. [1998 (7) SCC
498], this Court had occasion to consider the question as to when the ownership
and title in a property will pass to the transferee, under a deed of conveyance.
This Court observed : "Section 8 of the Transfer of Property Act declares
that on a transfer of property all the interests which the transferor has or is
having at that time, capable of passing in the property and in the legal
incidence thereof, pass on such a transfer unless a different intention is
expressed or necessarily implied.
A combined reading of
Section 8 and Section 54 of the Transfer of Property Act suggests that though on
execution and registration of a sale deed, the ownership and all interests in the
property pass to the transferee, yet that would be on terms and conditions embodied
in the deed indicating the intention of the parties. It follows that on execution
and registration of a sale deed, the ownership title and all interests in the property
pass to the purchaser unless a different intention is either expressed or necessarily
implied which has to be proved by the party asserting that title has not passed
on registration of the sale deed. Such intention can be gathered by intrinsic evidence,
namely, from the averments in the sale deed itself or by other attending circumstances
subject, of course, to the provisions of Section 92 of the Evidence Act, 1872."
9.
In
Kaliaperumal vs. Rajagopal & Anr. [2009 (4) SCC 193], this Court again considered
the issue and held: "It is now well settled that payment of entire price is
not a condition precedent for completion of the sale by passing of title, as
Section 54 of Transfer of Property Act, 1882 ("the Act", for short) defines
`sale' as a transfer of ownership in exchange for a price paid or promised or
part paid and part promised. If the intention of parties was that title should
pass on 10 execution and registration, title would pass to the purchaser even if
the sale price or part thereof is not paid. In the event of non-payment of
price (or balance price as the case may be) thereafter, the remedy of the
vendor is only to sue for the balance price.
He cannot avoid the sale.
He is, however, entitled to a charge upon the property for the unpaid part of
the sale price where the ownership of the property has passed to the buyer before
payment of the entire price, under Section 55(4)(b) of the Act. Normally,
ownership and title to the property will pass to the purchaser on registration
of the sale deed with effect from the date of execution of the sale deed. But
this is not an invariable rule, as the true test of passing of property is the intention
of parties. Though registration is prima facie proof of an intention to
transfer the property, it is not proof of operative transfer if payment of consideration
(price) is a condition precedent for passing of the property.
The answer to the
question whether the parties intended that transfer of the ownership should be
merely by execution and registration of the deed or whether they intended the
transfer of the property to take place, only after receipt of the entire
consideration, would depend on the intention of the parties. Such intention is
primarily to be gathered and determined from the recitals of the sale deed.
When the recitals are insufficient or' ambiguous the surrounding circumstances
and conduct of parties can be looked into for ascertaining the intention, subject
to the limitations placed by section 92 of Evidence Act. x x x x There is yet
another circumstance to show that title was intended to pass only after payment
of full price. Though the sale deed recites that the purchaser is entitled to
hold, possess and enjoy the scheduled properties from the date of sale, neither
the possession of the properties nor the title deeds were delivered to the purchaser
either on the date of sale or thereafter.
It is admitted that possession
of the suit properties purported to have been sold under the sale deed was never
delivered to the appellant and continued to be with the respondents. In fact, the
appellant, therefore, sought a decree for possession of the suit properties
from the respondents with mesne profits. If really the intention of the parties
was that the title to the properties should pass to the appellant on execution
of the deed and its registration, the possession of the suit properties would have
been delivered to the appellant."
10.
Where
the sale deed recites that on receipt of the total consideration by the vendor,
the property was conveyed and possession was delivered, the clear intention is that
title would pass and possession would be delivered only on payment of the
entire sale consideration. Therefore, where the sale deed recited that on receipt
of entire consideration, the vendor was conveying the property, but the purchaser
admits that he has not paid the entire consideration (or if the vendor proves
that the entire sale consideration was not paid to him, title in the property
would not pass to the purchaser.
11.
11.
At this stage, we may refer to the practice prevalent in Bihar known as `ta khubzul
badlain' (that is, title to the property passing to the purchaser only when
there is "exchange of equivalents"). As per this practice, where a
sale deed recites that entire sale consideration has been paid and possession
has been delivered, but the Registration Receipt is retained by the vendor and
possession of the property is also retained by the vendor, as the agreed
consideration (either full or a part) is not received, irrespective of the
recitals in the sale deed, the title would not pass to the purchaser, till
payment of the entire consideration to the vendor and the Registration Receipt
is obtained by the purchaser in exchange.
In such cases, on the
sale deed being executed and registered, the registration receipt (which is
issued by the Sub-Registrar) authorizing the holder thereof to receive the registered
sale deed on completion of the registration formalities, is received and retained
by the vendor and is not given to the purchaser. The vendor who holds the
Registration receipt will either receive the registered document and keep the
original sale deed in his custody or may keep the registration receipt without
exchanging it for the registered document from the sub-Registrar, till payment
of consideration is made. When the purchaser pays the price (that is the whole
price or part that is due) on or before the agreed date, he receives in
exchange, the registration receipt from the vendor entitling him to receive the
original registered sale deed, as also the possession.
If the payment is not
made as agreed, the vendor could repudiate the sale and refuse to deliver the
registration receipt/registered document, as the case may be, which is in his
custody, and proceed to deal with the property as he deems fit, by ignoring the
rescinded sale. The prevalence of this practice in Bihar is noticed and
recognized in several reported decisions - the decision of this Court in
Bishundeo Narain Rai (supra) and the decisions of the Patna High Court in
Sarjug Saran Singh vs. Ramcharitar Singh (1968 BLJR 74), Shiva Narayan Sah vs.
Baidya Nath Prasad Tiwary (AIR 1973 Patna 386), Baldeo Singh vs. Dwarika Singh (AIR
1978 Patna 97), which explain the practice of ta khubzul badlain, after relying
upon the principles laid down in the earlier decisions of that court in Md. Murtaza
Hussain vs. Abdul Rahman (AIR 1949 Pat. 364), Motilal Sahu vs. Ugrah Narain
Sahu (AIR 1950 Patna 288), 13and Panchoo Sahu v. Janki Mandar (AIR 1952 Pat.
263),11.1) In Bishundeo Narain Rai (supra), this Court held :
"It appears that
in the State of Bihar a practice is prevalent that when whole or part of sale consideration
is due or any other obligation is undertaken by the vendee, then on execution
and registration of the sale deed by the vendor, title to the property, subject
matter of sale, does not pass 'ta Khubzul Badlain', that is, until there is 'exchange
of equivalent' and in such a case registration receipt is retained by the
vendor, which on payment of consideration due or on fulfillment of the obligation
by the vendee is endorsed in his favour or if the sale deed has already been received
by the vendor then the sale deed is delivered to the vendee. Even so, this only
shows that such agreement are common in that part of the country but it is
essentially a matter of intention of the parties which has to be gathered from the
document itself but if the document is ambiguous then from the attending
circumstances, subject to the provisions of Section 92 of the Evidence
Act." (emphasis supplied)11.2)
In Sarjug Saran Singh
(supra) after referring to the recitals in a sale deed that the vendor had delivered
possession to the vendee as absolute owner, it was observed : "It was
admitted by the plaintiffs themselves that the aforesaid recital is incorrect, both
as regards the receipt of the consideration money and as regards putting the
vendee in possession of the property. The registration receipt remained with
the executants, namely, defendants 1 and 2, and the plaintiffs alleged that on
a subsequent date, when they offered to pay the consideration money and to take
the registration receipt from defendants 1 and 2 (Ta kalzul badlain exchange of
equivalents), they, under the instigation of the other defendants refused to
part with the receipt and sold the property to the other defendants.
"The Patna High Court
in that decision, upheld the decision of the first appellate court that the
intention of the parties was that title should pass only 14on payment of the
consideration and as admittedly the consideration was not paid, the plaintiffs did
not obtain title by virtue of the sale deed, on the following reasoning: "It
is well settled that the intention of the parties should be ascertained on a
construction of a document; and where there is any patent ambiguity in any
recital, aid may be taken from evidence of surrounding circumstances and the
conduct of the parties. Mr. Rai for the appellants urged that the first
sentence in the recital (quoted above) was complete in itself and that sentence
indicated the clear intention of the parties that title should pass at the time
of the registration when the executants admitted execution before the
Sub-registrar. He specially relied on the words "without any right of cancellation
and revocation" occurring in that sentence.
But it is well known
that in construing a document due weight should be given to all the recitals.
Hence the subsequent recitals as regards payment of consideration at the time of
exchange of equivalents and putting the vendee into possession should also be given
equal weight. x x x x x The first appellate court was, therefore, justified in
observing that, if the intention was that the title should pass at the time of
registration, the vendors would have insisted on payment of the consideration money
before the Sub- registrar, or immediately thereafter. The very fact that the registration
receipt was kept in their custody and not handed over to the vendee and possession
also admittedly remained with them lead to an inference that there was no intention
to convey title until the payment of the consideration." (emphasis
supplied)11.3)
In Shiva Narayan Sah (supra),
the Patna High Court, following its earlier decisions, held that when the sale
deed stipulates payment of balance price during the exchange of equivalents (balance
sale consideration and registration receipt) and mentions only "putting the
buyer in possession" without actually delivering possession, even if the sale
deed does not expressly postpone passing of the title till discharge of the
consideration due and even if more than three fourth of the total price had been
paid to the vendor, the title in the property would not pass to the purchaser
on execution and the registration of the sale deed, but will pass only during
the exchange of the equivalents.11.4)
In Baldeo Singh (supra),
the sale deed recited that the consideration money had been paid and nothing was
due from the vendee to whom possession had also been delivered. But the
plaintiffs admitted that neither the consideration money was paid by them nor
possession was delivered by them at the time of execution and registration of the
sale deed. After referring to the earlier decisions of that Court the High
Court held : "On the basis of the aforesaid decision it can be said that it
is almost settled that the question whether title passes on mere execution and registration
of a deed or only on payment of consideration depends upon the intention of the
parties, to be gathered from the deed.
It has also been held
that though the sale deed may recite that the consideration has been paid, but
there is nothing to prevent the parties from adducing evidence to show that the
recital is untrue and that, in fact, the consideration was not paid; this will not
be barred by Section 92 of the Evidence Act. In the present case, there is no
dispute so far as the second aspect is concerned. The sale deed in question
recites that consideration money has been paid and there is nothing due from
the vendee to whom the possession has also been delivered. But, the plaintiffs admit
that neither the consideration money was paid nor possession delivered to them at
the time of the execution and registration of the aforesaid deed. In my opinion,
the plaintiffs did not acquire title on mere execution and registration of the sale
deed.
"In the instant
case, the defendant first set has not taken the stand that he had repudiated the
contract even before 10-1-1963 when the deed of cancellation was executed. If
the amount is tendered by the defaulter after such repudiation, it is of no,
consequence. A vendor cannot be expected to 16 wait indefinitely to enable the vendee
to perform his part, and he is at liberty in such a situation to sell the
property to another person. In my opinion, in cases where the tender or payment
of the consideration money is made by the vendee before the vendor repudiates the
contract, the vendee will acquire a valid title over the properties covered by
the deed in question." (emphasis supplied)
12.
We
have referred to several decisions of the Patna High Court in detail to
demonstrate the existence of the established practice of exchanging equivalents
(ta khubzul badlain). The effect of such transactions in Bihar is even though
the duly executed and registered sale deed may recite that the sale consideration
has been paid, title has been transferred and possession has been delivered to
the purchaser, the actual transfer of title and delivery of possession is
postponed from the time of execution of the sale deed to the time of exchange
of the registration receipt for the consideration, that is ta khubzul badlain.
13.
We
may now examine the facts of this case with reference to the said principles.
As noticed above the first appellate court has recorded a finding of fact that
the appellants had not paid the consideration of Rs.22000 at the time of execution
and registration of the sale deed. This finding of fact (accepted by the High Court
in second appeal) has been recorded after exhaustive consideration of the oral
evidence and is not open to challenge. The trial court, the first appellate
court and the High Court have concurrently found that though the sale deed
recited that possession of the property was delivered to the purchasers, the possession
was not in fact delivered and continued with the vendor (second respondent) and
he had delivered the actual possession of the property to the first respondent when
he subsequently, sold the property to the first respondent.
Therefore, the
recitals in the sale deed dated 22.2.1988, that the vendor had received the entire
price of Rs.22000/- from the purchasers (that is Rs.17000 before execution of
the sale deed and Rs.5000 at the time of exchange of registration receipt) and
had transferred all his rights therein and that on such sale the vendor has not
retained any title and that the vendor has relinquished and transferred the
possession of the property to the purchasers, will not be of any assistance to
the appellants to contend that the title has passed to them or part
consideration was paid. It is an admitted fact that the registration receipt
was retained by the vendor to be exchanged later in consideration of the sale
price. It is also admitted that possession was not delivered though the deed recited
that possession was delivered.
The sale was categorically
repudiated by the second respondent on 18.3.1988 by cancelling the sale deed. There
is no evidence that the appellants offered the sale price of Rs.22000/- to the
second respondent before the repudiation. The only possible inference is that the
intention of the parties was that title would not pass until the consideration
was not paid; and as the consideration was not paid, the sale in favour of the
appellants did not come into effect and the title remained with the vendor and the
sale deed dated 22.2.1988 was a dead letter. Consequently, the subsequent sale in
favour of the first respondent was valid. Re: Question (iv)
14.
We
are therefore of the view that on execution and registration of the sale deed
dated 22.2.1988 in favour of appellants, title did not pass to the purchaser
and possession was not delivered. Therefore as a consequence the vendor
retained the power of repudiating the sale for non payment of the sale price
within a reasonable time. As the finding is that no part of the sale price was
paid, the claim of appellants that they offered to pay Rs.5000/-, even if
accepted to be true would mean proving their readiness to pay only a part of
the price and not the entire sale price. As the appellants have failed to prove
that they tendered the price of Rs.22000/- before repudiation and cancellation on
18.3.1988, the sale deed dated 22.2.1988 in favour of appellants did not convey
any title to them and after lawful repudiation, they were not entitled to claim
performance.
15.
We
hasten to add that the practice of ta khubzul badlain (of title passing on
exchange of equivalent) is prevalent only in Bihar. Normally, the recitals in a
sale deed about transfer of title, receipt of consideration and delivery of
possession will be evidence of such acts and events; and on the execution and
registration of the sale deed, the sale would be complete even if the sale
price was not paid, and it will not be possible to cancel the sale deed unilaterally.
The exception to this rule is stated in Kaliaperumal (supra).
The practice of `ta
khubzul badlain' in Bihar recognizes that a duly executed sale deed will not
operate as a transfer in preasenti but postpones the actual transfer of title,
from the time of execution and registration of the deed, to the time of exchange
of equivalents that is registration receipt and the sale consideration, if the
intention of the parties was that title would pass only on payment of entire
sale consideration.
As a result, until
and unless the duly executed and registered sale deed comes to the possession of
the purchaser, or until the right to receive the original sale deed is secured
by the purchaser by obtaining the registration receipt, the deed of sale merely
remains an agreement to be performed and will not be a completed sale. But in
States where such a practice is not prevalent, possession of Registration
Receipt by the Vendor, may not, in the absence of other clear evidence, lead to
an inference that consideration has not been paid or that title has not passed
to the purchaser as recited in the duly executed deed of conveyance. Where the
purchaser is from an outstation, the vendor being entrusted with the
Registration Receipt, to collect the original sale deed and deliver it to the
purchaser, is common. Be that as it may.
16.
In
view of the above, we hold that there is no merit in this appeal and the appeal
is dismissed.
..................................J.
(R V Raveendran)
..................................J.
(Markandey Katju)
New
Delhi;
April
15, 2011
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