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2018 DIGILAW 799 (RAJ)

SHIVDAYAL v. BANWARI LAL

2018-03-20

PRAKASH GUPTA

body2018
JUDGMENT AND ORDER : Prakash Gupta, J. The instant second appeal has been preferred against the judgment and decree dated 8.12.1995 passed by Additional District Judge (hereinafter referred to as "first appellate court"), Sikar in Civil Regular Appeal No. 36/90 whereby the "first appellate court" quashed and set aside the judgment and decree passed by the Munsiff Magistrate, Danta Ramgadh, Sikar (hereinafter referred to as "the trial court") in civil suit no. 86/87. 2. The brief facts giving rise to this second appeal can be summarised as thus: As per the plaint the case of the plaintiff-appellant (hereinafter "the plaintiff") is that that a sale deed was duly executed between the plaintiff and defendant-respondent (hereinafter "the defendant"), in respect of the suit property/land. The plaintiff was already in possession of the suit property and it was further agreed between the parties that they would get the aforesaid sale deed registered the next day i.e. 27.6.1987. However, the sale deed could not be registered on the stipulated date for some reason. Thereafter, the defendant tried to take the possession back from the plaintiff and also obstructed him from putting up fences on the suit property. Aggrieved by the actions of the defendant, the plaintiff filed a suit for specific performance and permanent injunction, seeking the relief of specific performance and to restrain the defendant from taking back the possession. The said suit was decreed in favour of the plaintiff by the learned trial court. However, the judgment and decree of the trial court was set aside by the first appellate court. Aggrieved by the judgment of the first appellate court, the plaintiff has preferred this second appeal. The second appeal was admitted on 11.1.1996 by the court and the following substantial questions of law were framed: (i) "Whether a suit for specific performance of contract is maintainable or not in case the seller execute the sale deed in favour of the buyer and such sale deed is subsequently not registered as required under the Indian Registration Act?" (ii) "Whether the unregistered sale deed may be received as evidence of a contract in a suit for specific performance?" (iii) "Whether the readiness and willingness is required to be expressly averred when the purchaser-plaintiff already performed all essential terms of the contract and duly averred the said facts in his pleading?" (iv) "Whether the findings of the appellate court below on issue no. 1 is wholly perverse and liable to be set aside?" 3. Mr. R.K. Agarwal, learned senior counsel appearing on behalf of the plaintiff-appellants has contended that the first appellate court erred in observing that the unregistered deed of sale, executed between the parties could not be received as evidence of the contract in a suit for specific performance. The learned counsel placed reliance on proviso to Section 49 of the Registration Act, 1908 and also the judgment by the Hon'ble Apex Court in the case of S. Kaladevi v. V.R. Somasundaram and Others, (2010) 5 SCC 401 . Mr. Agarwal next contended that in a suit for specific performance, question of readiness and willingness does not arise in case where the plaintiff has already performed his part of the contract. To support his contention, Mr. Agarwal relied on Section 16(c) of the Specific Relief Act, 1963 and the judgment of the Apex Court in the case of Syed Dastagir v. T.R. Gopalkrishna Setty, (1999) 6 SCC 337 . 4. Per contra, learned counsel for the defendant-respondent M.A. Khan contended that the sale deed executed between the parties could not be received in evidence since it was not registered. The counsel relied on 49 (c) of the Registration Act, 1948. The counsel further submitted that before a decree of specific performance can be granted, it was essential for the parties to prove the existence of an agreement by convincing evidence and the contract/agreement pleaded must be a specific one. To support his contention, the counsel relied on the judgment of the Apex Court in Ouseph Varghese v. Joseph Aley and Others, (1969) 2 SCC 539 . The counsel next contended that in the light of provision contained in Section 16(c) of the Specific Relief Act, 1963 in a suit for specific performance, it is essential for the plaintiff to expressly aver his readiness and willingness to perform his part of the contract from the date of the contract till the date of the hearing of the suit. In support of his arguments, the learned counsel relied on Gomathinayagam v. Palaniswami, (1967) AIR(Supreme Court) 868 and Santa Singh V. Darbara Singh, (1986) RAJLR 663. 5. After hearing learned counsel for the parties, I have gone through the impugned judgments of both the learned courts below and also the documents and evidence available on record. In support of his arguments, the learned counsel relied on Gomathinayagam v. Palaniswami, (1967) AIR(Supreme Court) 868 and Santa Singh V. Darbara Singh, (1986) RAJLR 663. 5. After hearing learned counsel for the parties, I have gone through the impugned judgments of both the learned courts below and also the documents and evidence available on record. SUBSTANTIAL QUESTION No. 1 As far as question No. 1 is concerned, in my considered view, there is no bar in any law whatsoever that a suit for specific performance cannot be brought on the basis of an unregistered sale deed. Further no arguments whatsoever were put forth by the learned counsel for the respondent as to why suit for specific performance is not maintainable on the basis of unregistered sale deed. But to settle the controversy once and for all, I deem it necessary to rely on a decision by the Apex Court which still holds the field. The decision was given in the case of Kalavakurti Venkata Subbaiah v. Bala Gurappagari Guruvi Reddy, (1999) 7 SCC 114 . In that case, the foremost issue before the Hon'ble court was whether a decree for specific performance could be granted based on an unregistered sale deed. The Hon'ble court in paragraph 10 of the said judgement observed as follows:- "10. The difference of opinion amongst the various High Courts on this aspect of the matter is that Section 77 of the Act is a complete code in itself providing for the enforcement of a right to get a document registered by filing a civil suit which but for the special provision of that section could not be maintainable. Several difficulties have been considered in these decisions, such as, when the time has expired since the date of the execution of the document whether there could be a decree to direct the Sub-Registrar to register the document. On the other hand, it has also been noticed that an agreement for transfer of property implies a contract not only to execute the deed of transfer but also to appear before the registering officer and to admit execution thereby facilitating the registration of the document wherever it is compulsory. The provisions of the Specific Relief Act and the Registration Act may to a certain extent cover the same field but so that one will not supersede the other. The provisions of the Specific Relief Act and the Registration Act may to a certain extent cover the same field but so that one will not supersede the other. Where the stage indicated in Section 77 of the Act has reached and no other relief except a direction for registration of the document is really asked for, Section 77 of the Act may be an exclusive remedy. However, in other cases it has no application, inasmuch as a suit for specific performance is of a wider amplitude and is primarily one for enforcement of a contract and other consequential or further relief. If a party is seeking not merely the registration of a sale deed, but also recovery of possession and mesne profits or damages, a suit under Section 77 of the Act is not an adequate remedy." As clear from the above quoted observation, the remedy to a party wanting to enforce his right to get document registered the remedies twofold. The first remedy is contained in sec 77 of Registration Act, 1908 and the second is a suit for specific performance. In this case, Section 77 of Registration Act will not be applicable since it is not a case where the registrar refused to register the document in question. Thus, the only remedy left for the appellant is to get a decree by way of specific performance. The judgment given in Ouseph Varghese would not aid the defendant-respondent in any manner. Thus, the first appellate court erred in holding that the suit was not maintainable on the basis of an unregistered sale deed. In view of the above discussion, first substantial question of law is decided in favour of the appellant. SUBSTANTIAL QUESTION NO. 2 As far as question no. 2 is concerned, for answering the said question & reference must be made to Section 49 of the Indian Registration Act, 1908. Section 49 of the act reads as follows: Effect of non-registration of documents required to be registered. SUBSTANTIAL QUESTION NO. 2 As far as question no. 2 is concerned, for answering the said question & reference must be made to Section 49 of the Indian Registration Act, 1908. Section 49 of the act reads as follows: Effect of non-registration of documents required to be registered. No document required by section 17 1 [or by any provision of the Transfer of Property Act, 1882 (4 of 1882)], to be registered shall (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: [Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument. A bare perusal of the proviso to the Section makes it abundantly clear that an unregistered document affecting any immovable property required to be compulsorily registered, can be taken as evidence of a contract in a suit for specific performance. Further, this issue is no longer res integra. The Hon'ble Supreme Court in S. Kaladevi has clearly observed that Section 49 of the Registration Act would not preclude the admission/receipt of an unregistered sale deed as evidence to prove the contract in a suit for specific performance. In view of the above this question is also decided in favour of the appellant. SUBSTANTIAL QUESTION No. 3 6. The third question that requires to be addressed in the instant second appeal is whether the plaintiff is specifically and expressly required to aver his readiness and willingness when he has already performed all essential terms of the contract. For answering this question, reference has to be made to Section 16(c) of the Specific Relief Act. The third question that requires to be addressed in the instant second appeal is whether the plaintiff is specifically and expressly required to aver his readiness and willingness when he has already performed all essential terms of the contract. For answering this question, reference has to be made to Section 16(c) of the Specific Relief Act. Section 16 of the Act reads as follows: Personal bares to relief.- Specific performance of a contract cannot be enforced in favour of a person (a) who would not be entitled to recover compensation for its breach; or (b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or (c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant. Explanation.-For the purposes of clause (c), - (i) where a contact involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed in the court; (ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction. Even a cursory reading of the Section makes it amply clear that in a suit for specific performance, the plaintiff has to prove two things under two different circumstances for getting the equitable relief from the court. The first situation is when the plaintiff has already performed his part of the contract. In this situation, the plaintiff needs to prove and aver that he has so performed his part of the contract. The other circumstances is one in which the plaintiff is yet to perform the essential terms of his part of the contract. Only in such situations the plaintiff required to aver and prove his readiness and willingness. The operative word which needs to be kept in mind while interpreting this section and distinguishing the two circumstances is "or". The judgments cited by the learned counsel for the defendant would be of little avail. Only in such situations the plaintiff required to aver and prove his readiness and willingness. The operative word which needs to be kept in mind while interpreting this section and distinguishing the two circumstances is "or". The judgments cited by the learned counsel for the defendant would be of little avail. Thus, readiness and willingness needs to be proved only when the person seeking for specific performance is yet to perform his part of the contract. As per the plaintiff all essential terms of the contract were acted upon. Not only was there complete payment of sale consideration but the sale deed was also executed. The only thing that could not be completed was the registration of the said sale deed. In these circumstances there was no need for plaintiff to aver and prove his readiness and willingness. In Sayed Dastagir considering the language in Section 16(c) of the Specific Relief Act, 1963 it was observed by the Hon'ble Supreme Court that it does not require any specific phraseology but only that the plaintiff must aver that he has performed or has always been and is willing to perform his part of the contract. So the compliance of "readiness and willingness" has to be in spirit and substance and not in letter and form. So to insist for a mechanical production of the exact words of a statute is to insist for the form rather than the essence. So the absence of form cannot dissolve an essence if already pleaded." In the instant case, in paragraphs Nos. 2 of the plaint, the plaintiff has specifically mentioned that on 26.06.1987 he had purchased the disputed plot for a consideration of Rs.1000/- and on the same day paid the entire amount and was put in physical and actual possession by the defendant on the land in question. On a perusal of the material and evidence available on record it is revealed that the execution of the sale deed (Ex.3) is duly proved. The trial court also held that entire sale consideration was paid and possession of the suit property was handed over by the defendant to the plaintiffs. The findings of the trial court in this regard are based on correct appreciation of the oral as well as documentary evidence available on record. The trial court also held that entire sale consideration was paid and possession of the suit property was handed over by the defendant to the plaintiffs. The findings of the trial court in this regard are based on correct appreciation of the oral as well as documentary evidence available on record. In view of the above, when the plaintiff has been able to prove execution of the sale deed (Ex.3) and payment of the entire consideration amount and also possession of the suit property was handed over, there was no need for him to specifically aver readiness and willingness since he had already performed his part of the contract and thus, the former part of Section 16 (3) of Specific Relief Act will kick-in. In view of the above substantial question no. 3 is also decided in favour of the appellant. Substantial Question of law 4 In view of the above, it is more than clear that the judgment & decree of the appellate court was not only perverse on issue no. 1 but on other counts also and hence, liable to be set aside. This question is also decided in favour of the appellant. 7. In view of the discussion above, this second appeal is allowed and the judgment and decree of the first appellate court is quashed and set aside and judgment & decree of the trial court is restored. There shall be no order as to costs.