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2007 DIGILAW 967 (PAT)

Binay Krishna v. Ashok Kumar

2007-05-18

RAMESH KUMAR DATTA

body2007
Judgment 1. Earlier, the petitioner was appearing in the matter in person but after understanding the complexity involved in the interpretation of the amendments brought in the Registration Act and the Transfer of Property Act, he has again appeared through counsel. 2. Heard learned counsel for the parties. 3. The revision application is directed against the order dated 19.5.2006 passed by the Subordinate Judge-I, Biharsharif in Title Suit No. 11 of 2006 by which the petition of the defendant petitioner under Order 7 Rule 11 of the Code of Civil Procedure has been rejected. 4. The aforesaid title suit had been filed by the Plaintiffs-Opposite Parties for specific performance of contract seeking a direction upon the defendant to execute the sale deed in favour of the plaintiffs in respect of the properties described in Schedule-1 of the plaint and consequential relief of injunction. The plaintiffs based their case on an unregistered deed of Baybeyana (contract for sale) dated 19.11.2003. After appearing in the case, the defendant-petitioners filed an application on 27.2.2006 under Order 7 Rule 11 of the Code of Civil Procedure praying to reject the plaint on the ground, inter alia, that the contract for sale being unregistered is inadmissible and cannot be enforced for the purpose of specific performance of contract. The plaintiffs-opposite parties filed the rejoinder and after hearing the parties, the court below by the impugned order has rejected the petition, since in the opinion of the court Section 53A of the Transfer of Property Act was not applicable and the contract for sale was not required to be registered even as per the Registration and Related Laws (Amendment) Act, 2001. 5. Learned counsel for the petitioner relies on various provisions of the Registration Act in support of his submission. Firstly it is submitted that under Section 17(1)(b) and (c) of the Registration Act any non-testamentary instrument which purports or operates to create, declare, assign, limit or extinguish whether in present or in future any right, title or interest, vested or contingent of the value of Rs. 100/- and upwards to or in immovable property, is compulsorily required to be registered and further any non-testamentary instrument which acknowledges the receipt of payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest is required to be registered. 6. 100/- and upwards to or in immovable property, is compulsorily required to be registered and further any non-testamentary instrument which acknowledges the receipt of payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest is required to be registered. 6. It is submitted by learned counsel that a contract for sale purports or operates to create a right to the immovable property in future and thus it will be required to be registered in terms of the said provisions. In this regard learned counsel relies upon the Registration and Related Laws (Amendment) Act, 2001 by which sub-section (1A) of Section 17 has been introduced in the Registration Act which provides that the documents containing contract to transfer any immovable property for the purpose of Section 53 A of the Transfer of Property Act, 1882, shall be registered if they have been executed on or after the commencement of the said Act and if such document is not registered then they shall have no effect for the purpose of the said Section 53A of the Act. In respect of Section 53A of the Act, learned counsel submits that the said provision only debars the transferor from enforcing against the transferee any right in respect of the properties over which the transferee has taken or continued in possession whereas in the present matter, the transferees are admittedly not in possession. 7. Learned counsel further relies upon Section 18 of the Registration Act, 1908 , which provides for the optional registration of document and in which no provision has been made for any contract for sale. Learned counsel thereafter, refers to Section 49 of the Registration Act under which a document which is required to be registered under Section 17 of the Act by any provision of Transfer of Property Act shall not be received as evidence of any transaction affecting such property, unless it has been registered. 8. On the basis of the aforesaid provisions, learned counsel for the petitioner submits that since the contract for sale in the present matter is not registered, therefore, the plaintiff-opposite parties are not entitled for considering the same as evidence in the present matter and no specific performance of the said contract can be awarded by the court below. 9. 8. On the basis of the aforesaid provisions, learned counsel for the petitioner submits that since the contract for sale in the present matter is not registered, therefore, the plaintiff-opposite parties are not entitled for considering the same as evidence in the present matter and no specific performance of the said contract can be awarded by the court below. 9. Learned counsel for the opposite parties, on the other hand, submits that the amendment brought by the Registration and Other Related Laws (Amendment) Act, 2001 does not have any effect at all in the present litigation since none of the provisions relating to a contract for sale has been affected by the said provisions, It is submitted that the said amendment only relates to the application of the doctrine of part performance as contemplated under Section 53A of the Transfer of Property Act. It is submitted that the whole purpose of bringing about the said amendment was to prevent the abuse of the provisions of Section 53A of the Transfer of Property Act as a result of which hundred thousands of properties in the country were not being registered taking advantage of the said provisions and thus, the State Governments were deprived of revenue on account of stamp duty and registration fee, etc. 10. Learned counsel in this regard refers to the specific provisions that are applicable with respect to contract for sale. Firstly, he refers to Section 54 of the T.P. Act, which defines a contract for sale of immovable property as a contract that a sale of such property shall take place on terms settled between the parties: it is specifically provided therein that it does not, of itself, create any interest in or charge on such property. Learned counsel then refers to clauses (b) and (c) of sub-section (1) of Section 17 of the Registration Act, which clearly make only such non-testamentary instruments as compulsorily registerable which purport or operate to create, declare, assign, limit or extinguish whether in present or in future, any right, title or interest of the value of one hundred rupees and upwards, to or in immovable property or which acknowledge the receipt or payment of any consideration on account of such right, title or interest being created, declared, assigned, limited or extinguished. It is submitted that in view of the clear definition of the contract for sale it could not be held to purport or operate to create, declare or assign either in present or in future any right, title or interest in the property. It is submitted that the contract for sale has been held to be only a document which creates a right in the transferee under the said document to obtain another document, i.e., a deed of sale which, in turn, when executed, will create the right, title or interest in the property concerned. 11. In this regard, learned counsel further refers to Section 17(2) (v) of the Registration Act which clearly provides that any document other than the documents specified in the newly introduced sub-section (1A) which relates to the doctrine of part performance, not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immovable property but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinnguish any such right, title or interest, as having been excluded from the application of clauses (b) and (c) of sub-section (1) of that Section. It is. thus, submitted that a contract for sale because of its nature, is specifically excluded from the purview of the provisions regarding compulsorily registration by specific provisions contained in sub-section (2)(v) of Section 17 of the Act. 12. Learned counsel further refers to the Explanation contained in Section 17(2) of the Registration Act, which lays down that a document purporting or operating to effect a contract for the sale of immovable property shall not be deemed to require or ever to have required registration by reason only of the fact that such document contained a recital of the payment of any earnest money or of the whole or any part of the purchase money. It is submitted that the said explanation had been necessitated since in most of the contract for sale there is a recital relating to payment of certain amount of the purchase money as earnest money or of the whole or any part of the purchase money. 13. It is submitted that the said explanation had been necessitated since in most of the contract for sale there is a recital relating to payment of certain amount of the purchase money as earnest money or of the whole or any part of the purchase money. 13. On the basis of the aforesaid provisions, it is submitted that the law has been very clear on this point right from inception that a contract for sale is not required to be registered and was never at any time since the Registration Act was enacted in 1908 required to be registered. With respect to the specific performance of a contract for sale, learned counsel relies upon the provision of Section 49 of the Registration Act, which declares that even an unregistered document affecting immovable property, and required by the Registration Act or the Transfer of Property Act to be registered may be received as evidence of a contract in a suit for specific performance under the Specific Relief Act. It is submitted that the case of the plaintiff-opposite parties stands on a much higher footing since the contract for sale in the case is found not required to be registered and the court below has rightly held that it would be taken as evidence for the purpose of specific performance of the contract. 14. In support of the aforesaid proposition, learned counsel for the opposite parties relies upon a decision of the Kerala High Court in the case of Bhaskaran vs. George Joseph: A.I.R. 1968 Kerala 255. In paragraph no. 4 of the said judgment it was held as follows: "4. An agreement for sale of immovable property requires registration or not is the point to be considered. Section 17 of the Registration Act enumerates the list of documents which require registration. Section 17(1)(b) of the Act provides for the registration of non- testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property. As Ext.-A2 is an agreement for sale of immovable property it will not come under section 17(1)(b) of the Registration Act. As Ext.-A2 is an agreement for sale of immovable property it will not come under section 17(1)(b) of the Registration Act. Section 17(2) of the Act provides that nothing in clauses (b) and (c) of sub-section (1) of Section 17 applies to any document not itself, creating declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immovable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest. An agreement for sale of immovable property is a non-testamentary instrument which does not create declare, assign, limit or extinguish, any right, title or interest, whether vested or contingent in immovable property. Section 17(2)(v) makes the position clear that a document not itself creating a right in immovable property of the value of Rs. 100/- and upwards, but merely creating a right to obtain another document which will, when executed, create any such right need not be registered. As held in A.I.R. 1927 Mad. 636(F.B.) (Nursing Narsimhaswamy vs. Venkatalingam) a document which does not by itself convey property but merely gives a right to call for another document does not require registration. Explanation to section 17(2) of the Act makes it clear that even an unregistered document affecting immovable property may be received as an evidence of contract in a suit for specific performance. This explanation was added by section 2 of the Indian Registration (Amendment) Act, 1927. The explanation states that a document purporting or operating to effect a contract for the sale of immovable property shall not be deemed to require or ever to have required registration by reason only of the fact that such a document contains a recital of the payment of any earnest money or of the whole or of any part of the purchase money." 15. Learned counsel also relies upon the case of Semmonch Gounder vs. Naina Gounder (Decd.) and Others: AIR. 1988 Madras 345, in paragraph no. 7 of which also it has been laid down that it is not obligatory to register an agreement for sale. 16. On a consideration of the sub-missions of the parties, this court does not find any force in the submissions of the learned counsel for the petitioner. 1988 Madras 345, in paragraph no. 7 of which also it has been laid down that it is not obligatory to register an agreement for sale. 16. On a consideration of the sub-missions of the parties, this court does not find any force in the submissions of the learned counsel for the petitioner. It is evident from the changes brought about by the Registration and Other Related Laws (Amendment) Act, 2001 that the same was only with respect to the applicability of the doctrine of part performance as provided under Section 53A of the Transfer of Property Act, 1882 and was to prevent the transferor or his successor-in-interest from taking any advantage if the transferee was in possession pursuant to a registered agreement to transfer. Only with respect to the applicability of the said doctrine of part performance, the law has now been changed and it is now required that such an instrument of transfer pursuant to which the transferee has either taken possession of the property or being already in possession continues in possession in part performance of the contract and has done some act in furtherance of the contract then unless the same has been registered the transferee cannot invoke the said doctrine debarring the transferor from enforcing any of his right in respect of the properties. 17. In the present matter there is no applicability of the doctrine of part performance since neither the Plaintiff-Opposite parties claim to have come into possession on the strength of the contract of transfer or to have continued in possession with respect to the same. The plaintiffs are merely claiming specific performance of the contract for sale entered into between the parties. With respect to a contract for sale, there has been no amendment in the relevant provisions either of the Transfer of Property Act or of the Registration Act and the same continues to be governed by the law which was earlier applicable to the same. 18. It is settled law that a contract for sale is not required to be registered and the same can be enforced by filing a suit for specific performance under the provisions of the Specific Relief Act. 18. It is settled law that a contract for sale is not required to be registered and the same can be enforced by filing a suit for specific performance under the provisions of the Specific Relief Act. It is evident even from the various provisions relied upon by learned counsel for the opposite parties that it not being a document in itself creating any right in the immovable property but merely creating a right to obtain another document, namely, deed of sale, does not by itself create, declare or assign any right, title or interest in the property and thus, it is not required to be registered. The Explanation to sub-section (2) of Section 17 of the Registration Act further makes it clear that a recital of receipt of earnest money or part of purchase price will not affect the contract for sale and it shall not be required to be registered. Section 49 of the Registration Act, as a matter of fact, further goes to show that even unregistered document affecting immovable property and required by that Act or the T.P. Act to be registered may be received as evidence of a contract in a suit for specific peformance. 19. On a consideration of the aforesaid provisions of law and the facts and circumstances of this case, this court is of the view that there is no jurisdictional or legal error in the order of the court below. There is, thus, no merit in the revision application and it is, accordingly, dismissed.