To the aforesaid principles, one more
principle may be added, namely, that a
document required to be registered, if
unregistered, can be admitted in evidence as
evidence of a contract in a suit for specific
performance.
HIGH COURT OF MADHYA PRADESH, PRINCIPAL
SEAT AT JABALPUR
First Appeal No.323/2014
Akshay Doogad ..…. Appellant
Versus
State of M.P. and others ……Respondents
CORAM:
Hon'ble Shri Justice A. M. Khanwilkar, Chief Justice
Hon'ble Shri Justice J. K. Maheshwari, Judge
(18/8/2015)
Citation; AIR 2016 MP83
This first appeal takes exception to the judgment
and decree passed by the 3rd Additional District Judge,
Chhindwara in Civil Suit No.22-A/12. The said suit was filed
by the appellant for relief of specific performance of
agreement executed between the parties on 17.2.2010, in
respect of property situated in Ward No.32, P.H. No.22,2
B.No.177, R.N.M. Chhindwara-1. The suit was resisted by
the respondents/defendants.
2. The trial Court framed issues relevant to the relief
claimed in the suit. As regards the issue whether the suit
agreement was executed between the parties, the same has
been answered in favour of the appellant/plaintiff. Even the
issue of readiness and willingness has been answered in
favour of the plaintiff. The trial Court after analyzing the
evidence on record has also noticed that the defendants have
only questioned the value of the property in the entire cross
examination and not the factum of execution of the
agreement or about their commitment to transfer the property
in favour of the plaintiff. Although, the trial Court in the
impugned judgment answered all the issues in favour of the
plaintiff, rejected the relief of specific performance on the
sole ground that the agreement executed between the parties
was unregistered document and as such it was inadmissible in
evidence. The trial Court in support of that opinion has placed
reliance on the decision of the learned Single Judge of this
Court in the case of Narbada Prasad Agrawal Vs.
Omprakash Bhavsar1
and on another decision in the case of
1
2009 (I) MPWN 293
Kailashchandra Vs. Dwarkadheesh and others2
. As a
result, the suit came to be dismissed with direction to the
respondents/defendants to refund the earnest money amount
received by them at the time of execution of the agreement
along with interest @ 6% per annum thereon with costs of the
suit. This decree is the subject matter of challenge in the
present appeal.
3. After the notice of appeal was served on the
Respondents/Defendants No.1 to 3, the respondents filed
cross objection under Order 41 Rule 22 on 7.7.2014, bearing
Document No.4697/2014. Notably, the cross objection is only
about the quantum of costs and the direction to refund the
earnest money amount with interest. No other ground has
been taken in the cross objection, in particular, to question the
finding of the trial Court on the other relevant issues such as
factum of execution of agreement and on readiness and
willingness to perform the obligation under the said
agreement of the plaintiff.
4. Counsel for the appellant submits that the view
taken by the trial Court is in the teeth of
Supreme Court's decision in the case of
2
2013 (4) MPHT 4324
S. Kaladevi Vs. V. R. Somasundaram and others3
.
According to the appellant, this decision was pressed into
service before the trial Court but the trial Court has failed to
analyse the same, though directly on the point and in favour
of the appellant. Further, as the cross objection has been filed
by the defendant limited to the direction to refund the earnest
money amount alongwith interest and costs of the suit, no
other issue arises for consideration of this Court; and that if
the appellant succeeds in questioning the erroneous view
taken by the Trial Court, must succeed in getting complete
relief as prayed in the suit – of decree of specific
performance.
5. Counsel for the respondent in his argument did
make an unsuccessful and feeble attempt to question the
finding recorded by the trial Court on other issues, besides
the grounds urged in the cross objection filed by the
defendant.
6. Having considered the rival submissions, the moot
question which arise for our reconsideration is, whether the
opinion recorded by the trial Court that the suit agreement
being unregistered document, relief of specific performance
cannot be granted to the plaintiff, is correct?
3
2010 (3) MPLJ 5005
7. We find force in the submission of the appellant
that the only issue that needs to be decided in the appeal is
about the correctness of the said finding and nothing more; as
no cross objection has been filed by the
Respondents/Defendants No.1 to 3 to question the correctness
of the finding of fact recorded by the trial Court on other
issues. Moreover because, the trial Court after thorough
analysis of the evidence on record has rightly found as of fact
that the suit agreement was executed between the parties.
Even on the factum of readiness and willingness of the
plaintiff to discharge his obligation under the suit agreement,
has been rightly answered in favour of the plaintiff. We have
no hesitation in affirming the said findings of the trial Court.
8. The plaintiff has been non-suited only on the ground
that the suit agreement being unregistered document was
inadmissible in evidence and, therefore, decree of specific
performance on the basis of such agreement cannot be
granted. This view taken by the Trial Court is in the teeth of
the exposition of the Supreme Court in the case of
S. Kaladevi (supra). This very contention has been negatived
by the Supreme Court in Paragraph Nos.11, 12 and 16 of the
said decision, in particular, which read thus:-6
“11. The main provision in Section 49
provides that any document which is
required to be registered, if not registered,
shall not affect any immovable property
comprised therein nor such document shall
be received as evidence of any transaction
affecting such property. Proviso, however,
would show that an unregistered document
affecting immovable property and required
by 1908 Act or the Transfer of Property Act,
1882 to be registered may be received as an
evidence to the contract in a suit for specific
performance or as evidence of any collateral
transaction not required to be effected by
registered instrument. By virtue of proviso,
therefore, an unregistered sale deed of an
immovable property of the value of Rs.
100/- and more could be admitted in
evidence as evidence of a contract in a suit
for specific performance of the contract.
Such an unregistered sale deed can also be
admitted in evidence as an evidence of any
collateral transaction not required to be
effected by registered document. When an
unregistered sale deed is tendered in
evidence, not as evidence of a completed
sale, but as proof of an oral agreement of
sale, the deed can be received in evidence
making an endorsement that it is received
only as evidence of an oral agreement of
sale under the proviso to Section 49 of 1908
Act.
12. Recently in the case of K.B. Saha and
Sons Private Limited v. Development
Consultant Limited1, (2008) 8 SCC 564
this Court noticed the following statement
of Mulla in his Indian Registration Act, 7th
Edition, at page 189:-
"......The High Courts of Calcutta, Bombay,
Allahabad, Madras, Patna, Lahore, Assam,
Nagpur, Pepsu, Rajasthan, Orissa, Rangoon
and Jammu & Kashmir; the former Chief
Court of Oudh; the Judicial Commissioner's
Court at Peshawar, Ajmer and Himachal7
Pradesh and the Supreme Court have held
that a document which requires registration
under Section 17 and which is not
admissible for want of registration to prove a
gift or mortgage or sale or lease is
nevertheless admissible to prove the
character of the possession of the person
who holds under it......"
This Court then culled out the following
principles:-
"1. A document required to be registered, if
unregistered is not admissible into evidence
under Section 49 of the Registration Act.
2. Such unregistered document can however
be used as an evidence of collateral purpose
as provided in the proviso to Section 49 of
the Registration Act.
3. A collateral transaction must be
independent of, or divisible from, the
transaction to effect which the law required
registration.
4. A collateral transaction must be a
transaction not itself required to be effected
by a registered document, that is, a
transaction creating, etc. any right, title or
interest in immovable property of the value
of one hundred rupees and upwards.
5. If a document is inadmissible in evidence
for want of registration, none of its terms can
be admitted in evidence and that to use a
document for the purpose of proving an
important clause would not be using it as a
collateral purpose."
To the aforesaid principles, one more
principle may be added, namely, that a
document required to be registered, if
unregistered, can be admitted in evidence as
evidence of a contract in a suit for specific
performance.
……………8
16. The argument of learned counsel for the
respondents with regard to Section 3(b) of
1963 Act is noted to be rejected. We fail to
understand how the said provision helps the
respondents as the said provision provides
that nothing in 1963 Act shall be deemed to
affect the operation of 1908 Act, on
documents. By admission of an unregistered
sale deed in evidence in a suit for specific
performance as evidence of contract, none of
the provisions of 1908 Act is affected; rather
court acts in consonance with proviso
appended to Section 49 of 1908 Act.”
9. The Supreme Court has opined that when an
unregistered document is tendered in evidence, not as
evidence of a completed sale, but as proof of an agreement of
sale, the deed can be received in evidence making an an
endorsement that it is received only as evidence of an oral
agreement of sale under the proviso to Section 49 of the Act
of 1908. The Court went to observe that admission of an
unregistered sale deed by the Court in such cases would be in
consonance with the proviso appended to Section 49 of the
Act of 1908. Considering this decision, the view taken by the
trial Court on the issue under consideration will have to be
overturned. The reason why the trial Court has not adverted
to this Supreme Court decision has remained unexplained.
We need not dilate on that matter as we have no hesitation in
accepting the argument of the appellant that the sole basis on
which the relief claimed by the appellant in the suit for
specific performance has been rejected cannot be
countenanced.
10. We, accordingly, reverse the said opinion of the trial
Court and as a necessary corollary decree the suit in its
entirety by granting relief of specific performance to the
appellant as prayed.
11. The next question is whether the respondents/
defendants can be permitted to question the finding of fact
recorded by the trial Court on other issues. As aforesaid, the
respondent has filed cross objection limited to challenge to
the direction issued by the trial Court to refund the earnest
money amount along with interest and costs of the suit and
nothing more. In absence of challenge to the said findings, it
is not necessary for us to examine the matter any further. In
any case, the finding of fact recorded by the trial Court on the
said two crucial issues, is founded on cogent evidence as
analyzed by the trial Court including the defendants having
questioned the agreement only on the quantum mentioned
therein and not on any other count. Accordingly, those
findings will have to be affirmed and it will have to be held10
that those issues have been correctly answered by the trial
Court.
12. As regards the grounds urged in the cross-objection, the
same do not survive for consideration in view of the opinion
already expressed hitherto. The question of correctness of the
direction given by the trial Court to refund the earnest money
amount along with interest and costs of the suit would have
arisen, if the findings of the trial Court on the issue under
consideration was to be confirmed. As indicated earlier, the
suit deserves to be decreed in its entirety by granting relief of
specific performance as claimed by the appellant/plaintiff.
O R D E R
13. Accordingly, the impugned judgment and decree passed
by the trial Court is quashed and set aside. Instead, the suit
bearing No. 22-A/2012 filed by the appellant is decreed and
the relief of specific performance, as prayed, is granted on
condition that the appellant/plaintiff shall deposit the
balance/outstanding agreement amount, if already not
deposited, alongwith interest on such amount at the rate of
12% per annum (which is commensurate with the
Nationalized Bank lending rate) from the date of the suit to
the date of the decree and in addition further interest at the11
rate of 6% per annum from the date of the decree to the date
of payment. The amount already paid by the appellant
pursuant to the impugned decree, will have to be given
adjustment in the final decretal amount to be paid by the
appellant. The cross-objection is also disposed of on the
above terms. No order as to costs. Parties to bear their own
costs of the proceedings.
(A. M. Khanwilkar) (J. K. Maheshwari)
Chief Justice Judge
Anchal
Print Page
principle may be added, namely, that a
document required to be registered, if
unregistered, can be admitted in evidence as
evidence of a contract in a suit for specific
performance.
HIGH COURT OF MADHYA PRADESH, PRINCIPAL
SEAT AT JABALPUR
First Appeal No.323/2014
Akshay Doogad ..…. Appellant
Versus
State of M.P. and others ……Respondents
CORAM:
Hon'ble Shri Justice A. M. Khanwilkar, Chief Justice
Hon'ble Shri Justice J. K. Maheshwari, Judge
(18/8/2015)
Citation; AIR 2016 MP83
This first appeal takes exception to the judgment
and decree passed by the 3rd Additional District Judge,
Chhindwara in Civil Suit No.22-A/12. The said suit was filed
by the appellant for relief of specific performance of
agreement executed between the parties on 17.2.2010, in
respect of property situated in Ward No.32, P.H. No.22,2
B.No.177, R.N.M. Chhindwara-1. The suit was resisted by
the respondents/defendants.
2. The trial Court framed issues relevant to the relief
claimed in the suit. As regards the issue whether the suit
agreement was executed between the parties, the same has
been answered in favour of the appellant/plaintiff. Even the
issue of readiness and willingness has been answered in
favour of the plaintiff. The trial Court after analyzing the
evidence on record has also noticed that the defendants have
only questioned the value of the property in the entire cross
examination and not the factum of execution of the
agreement or about their commitment to transfer the property
in favour of the plaintiff. Although, the trial Court in the
impugned judgment answered all the issues in favour of the
plaintiff, rejected the relief of specific performance on the
sole ground that the agreement executed between the parties
was unregistered document and as such it was inadmissible in
evidence. The trial Court in support of that opinion has placed
reliance on the decision of the learned Single Judge of this
Court in the case of Narbada Prasad Agrawal Vs.
Omprakash Bhavsar1
and on another decision in the case of
1
2009 (I) MPWN 293
Kailashchandra Vs. Dwarkadheesh and others2
. As a
result, the suit came to be dismissed with direction to the
respondents/defendants to refund the earnest money amount
received by them at the time of execution of the agreement
along with interest @ 6% per annum thereon with costs of the
suit. This decree is the subject matter of challenge in the
present appeal.
3. After the notice of appeal was served on the
Respondents/Defendants No.1 to 3, the respondents filed
cross objection under Order 41 Rule 22 on 7.7.2014, bearing
Document No.4697/2014. Notably, the cross objection is only
about the quantum of costs and the direction to refund the
earnest money amount with interest. No other ground has
been taken in the cross objection, in particular, to question the
finding of the trial Court on the other relevant issues such as
factum of execution of agreement and on readiness and
willingness to perform the obligation under the said
agreement of the plaintiff.
4. Counsel for the appellant submits that the view
taken by the trial Court is in the teeth of
Supreme Court's decision in the case of
2
2013 (4) MPHT 4324
S. Kaladevi Vs. V. R. Somasundaram and others3
.
According to the appellant, this decision was pressed into
service before the trial Court but the trial Court has failed to
analyse the same, though directly on the point and in favour
of the appellant. Further, as the cross objection has been filed
by the defendant limited to the direction to refund the earnest
money amount alongwith interest and costs of the suit, no
other issue arises for consideration of this Court; and that if
the appellant succeeds in questioning the erroneous view
taken by the Trial Court, must succeed in getting complete
relief as prayed in the suit – of decree of specific
performance.
5. Counsel for the respondent in his argument did
make an unsuccessful and feeble attempt to question the
finding recorded by the trial Court on other issues, besides
the grounds urged in the cross objection filed by the
defendant.
6. Having considered the rival submissions, the moot
question which arise for our reconsideration is, whether the
opinion recorded by the trial Court that the suit agreement
being unregistered document, relief of specific performance
cannot be granted to the plaintiff, is correct?
3
2010 (3) MPLJ 5005
7. We find force in the submission of the appellant
that the only issue that needs to be decided in the appeal is
about the correctness of the said finding and nothing more; as
no cross objection has been filed by the
Respondents/Defendants No.1 to 3 to question the correctness
of the finding of fact recorded by the trial Court on other
issues. Moreover because, the trial Court after thorough
analysis of the evidence on record has rightly found as of fact
that the suit agreement was executed between the parties.
Even on the factum of readiness and willingness of the
plaintiff to discharge his obligation under the suit agreement,
has been rightly answered in favour of the plaintiff. We have
no hesitation in affirming the said findings of the trial Court.
8. The plaintiff has been non-suited only on the ground
that the suit agreement being unregistered document was
inadmissible in evidence and, therefore, decree of specific
performance on the basis of such agreement cannot be
granted. This view taken by the Trial Court is in the teeth of
the exposition of the Supreme Court in the case of
S. Kaladevi (supra). This very contention has been negatived
by the Supreme Court in Paragraph Nos.11, 12 and 16 of the
said decision, in particular, which read thus:-6
“11. The main provision in Section 49
provides that any document which is
required to be registered, if not registered,
shall not affect any immovable property
comprised therein nor such document shall
be received as evidence of any transaction
affecting such property. Proviso, however,
would show that an unregistered document
affecting immovable property and required
by 1908 Act or the Transfer of Property Act,
1882 to be registered may be received as an
evidence to the contract in a suit for specific
performance or as evidence of any collateral
transaction not required to be effected by
registered instrument. By virtue of proviso,
therefore, an unregistered sale deed of an
immovable property of the value of Rs.
100/- and more could be admitted in
evidence as evidence of a contract in a suit
for specific performance of the contract.
Such an unregistered sale deed can also be
admitted in evidence as an evidence of any
collateral transaction not required to be
effected by registered document. When an
unregistered sale deed is tendered in
evidence, not as evidence of a completed
sale, but as proof of an oral agreement of
sale, the deed can be received in evidence
making an endorsement that it is received
only as evidence of an oral agreement of
sale under the proviso to Section 49 of 1908
Act.
12. Recently in the case of K.B. Saha and
Sons Private Limited v. Development
Consultant Limited1, (2008) 8 SCC 564
this Court noticed the following statement
of Mulla in his Indian Registration Act, 7th
Edition, at page 189:-
"......The High Courts of Calcutta, Bombay,
Allahabad, Madras, Patna, Lahore, Assam,
Nagpur, Pepsu, Rajasthan, Orissa, Rangoon
and Jammu & Kashmir; the former Chief
Court of Oudh; the Judicial Commissioner's
Court at Peshawar, Ajmer and Himachal7
Pradesh and the Supreme Court have held
that a document which requires registration
under Section 17 and which is not
admissible for want of registration to prove a
gift or mortgage or sale or lease is
nevertheless admissible to prove the
character of the possession of the person
who holds under it......"
This Court then culled out the following
principles:-
"1. A document required to be registered, if
unregistered is not admissible into evidence
under Section 49 of the Registration Act.
2. Such unregistered document can however
be used as an evidence of collateral purpose
as provided in the proviso to Section 49 of
the Registration Act.
3. A collateral transaction must be
independent of, or divisible from, the
transaction to effect which the law required
registration.
4. A collateral transaction must be a
transaction not itself required to be effected
by a registered document, that is, a
transaction creating, etc. any right, title or
interest in immovable property of the value
of one hundred rupees and upwards.
5. If a document is inadmissible in evidence
for want of registration, none of its terms can
be admitted in evidence and that to use a
document for the purpose of proving an
important clause would not be using it as a
collateral purpose."
To the aforesaid principles, one more
principle may be added, namely, that a
document required to be registered, if
unregistered, can be admitted in evidence as
evidence of a contract in a suit for specific
performance.
……………8
16. The argument of learned counsel for the
respondents with regard to Section 3(b) of
1963 Act is noted to be rejected. We fail to
understand how the said provision helps the
respondents as the said provision provides
that nothing in 1963 Act shall be deemed to
affect the operation of 1908 Act, on
documents. By admission of an unregistered
sale deed in evidence in a suit for specific
performance as evidence of contract, none of
the provisions of 1908 Act is affected; rather
court acts in consonance with proviso
appended to Section 49 of 1908 Act.”
9. The Supreme Court has opined that when an
unregistered document is tendered in evidence, not as
evidence of a completed sale, but as proof of an agreement of
sale, the deed can be received in evidence making an an
endorsement that it is received only as evidence of an oral
agreement of sale under the proviso to Section 49 of the Act
of 1908. The Court went to observe that admission of an
unregistered sale deed by the Court in such cases would be in
consonance with the proviso appended to Section 49 of the
Act of 1908. Considering this decision, the view taken by the
trial Court on the issue under consideration will have to be
overturned. The reason why the trial Court has not adverted
to this Supreme Court decision has remained unexplained.
We need not dilate on that matter as we have no hesitation in
accepting the argument of the appellant that the sole basis on
which the relief claimed by the appellant in the suit for
specific performance has been rejected cannot be
countenanced.
10. We, accordingly, reverse the said opinion of the trial
Court and as a necessary corollary decree the suit in its
entirety by granting relief of specific performance to the
appellant as prayed.
11. The next question is whether the respondents/
defendants can be permitted to question the finding of fact
recorded by the trial Court on other issues. As aforesaid, the
respondent has filed cross objection limited to challenge to
the direction issued by the trial Court to refund the earnest
money amount along with interest and costs of the suit and
nothing more. In absence of challenge to the said findings, it
is not necessary for us to examine the matter any further. In
any case, the finding of fact recorded by the trial Court on the
said two crucial issues, is founded on cogent evidence as
analyzed by the trial Court including the defendants having
questioned the agreement only on the quantum mentioned
therein and not on any other count. Accordingly, those
findings will have to be affirmed and it will have to be held10
that those issues have been correctly answered by the trial
Court.
12. As regards the grounds urged in the cross-objection, the
same do not survive for consideration in view of the opinion
already expressed hitherto. The question of correctness of the
direction given by the trial Court to refund the earnest money
amount along with interest and costs of the suit would have
arisen, if the findings of the trial Court on the issue under
consideration was to be confirmed. As indicated earlier, the
suit deserves to be decreed in its entirety by granting relief of
specific performance as claimed by the appellant/plaintiff.
O R D E R
13. Accordingly, the impugned judgment and decree passed
by the trial Court is quashed and set aside. Instead, the suit
bearing No. 22-A/2012 filed by the appellant is decreed and
the relief of specific performance, as prayed, is granted on
condition that the appellant/plaintiff shall deposit the
balance/outstanding agreement amount, if already not
deposited, alongwith interest on such amount at the rate of
12% per annum (which is commensurate with the
Nationalized Bank lending rate) from the date of the suit to
the date of the decree and in addition further interest at the11
rate of 6% per annum from the date of the decree to the date
of payment. The amount already paid by the appellant
pursuant to the impugned decree, will have to be given
adjustment in the final decretal amount to be paid by the
appellant. The cross-objection is also disposed of on the
above terms. No order as to costs. Parties to bear their own
costs of the proceedings.
(A. M. Khanwilkar) (J. K. Maheshwari)
Chief Justice Judge
Anchal
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