Gujarat High Court
Minaben Vijaybhai Deshani vs Navinchandra Gulabray Kotak on 4 July, 2018
Author: J.B. Pardiwala
Bench: J.B.Pardiwala
C/SA/164/2018 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SECOND APPEAL NO. 164 of 2018
With
CIVIL APPLICATION NO. 1 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE J.B.PARDIWALA
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1 Whether Reporters of Local Papers may be allowed to see the
judgment ? NO
2 To be referred to the Reporter or not ?
NO
3 Whether their Lordships wish to see the fair copy of the
judgment ? NO
4 Whether this case involves a substantial question of law as to
the interpretation of the Constitution of India or any order made
NO
thereunder ?
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MINABEN VIJAYBHAI DESHANI
Versus
NAVINCHANDRA GULABRAY KOTAK
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Appearance:
MR SANDEEP N BHATT(190) for the PETITIONER(s) No. 1,2,3,4
MS SONAL S BHATT(2870) for the PETITIONER(s) No. 1,2,3,4
MR MEHUL S SHAH, SR. ADVOCATE WITH MR. AVINASH G KOTAK(6378)
for the RESPONDENT(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 04/07/2018
ORAL JUDGMENT
1 This Second Appeal under Section 100 of the Code of Civil Procedure, 1908 is at the instance of the original defendants and is Page 1 of 12 C/SA/164/2018 JUDGMENT directed against the judgment and order dated 21st April 2018 passed by the 3rd Additional District Judge, Rajkot in Regular Civil Appeal No.30 of 2012, by which the first Appellate Court allowed the appeal filed by the respondent herein - original plaintiff and passed a decree for specific performance of contract by allowing the Special Civil Suit No.25 of 2003.
2 The facts giving rise to this Second Appeal may be summarised as under:
2.1 The appellants herein are the original defendants. The respondent herein is the original plaintiff. The appellants herein executed an agreement to sale dated 30th December 1999 with respect to a flat bearing No.7 situated on the 3rd floor of Shreenathji Apartment at Rajkot.
It is not in dispute that at the time of the agreement to sale, the appellants herein received the entire sale consideration of Rs.1,50,000/, as fixed in the agreement. It is also not in dispute that the respondent herein was put in possession of the flat. The case of the appellants herein is that although the total sale consideration in the agreement to sale is shown to be Rs.1,50,000/, yet the understanding between the parties was of a higher amount and the respondent herein was obliged to make the payment of the balance amount, which was fixed by the parties. However, Mr. Bhatt, the learned counsel appearing for the appellants fairly conceded that this part of the case put up by the defendants has not been believed even by the Civil Court.
2.2 It appears that in the agreement to sale, time fixed for execution of the sale deed was six months. However, on expiry of the time period of six months, the respondent herein - original plaintiff did not get the sale deed executed in his favour. However, the respondent herein - original plaintiff, before expiry of three years from the date of execution of the agreement, issued notice to the appellants herein calling upon Page 2 of 12 C/SA/164/2018 JUDGMENT them to execute the sale deed. As the defendants declined to execute the sale deed, the original plaintiff was left with no other option, but to file a Special Civil Suit No.25 of 2003 (old Civil Suit No.1301 of 2002).
2.3 The appellants herein - original defendants appeared before the Civil Court and denied the entire case put up by the plaintiff. According to the defendants, time was made the essence of contract in the agreement. The say of the defendants is that although they had received the amount of Rs.1,50,000/ fixed towards sale consideration, as stated in the agreement and the plaintiff was also put into possession, yet as the plaintiff did not take steps to get the sale deed executed, it could be said that he was not ready and willing to perform his part of the contract.
2.4 Having regard to the pleadings, the Civil Court framed the following issues vide Exhibit : 24:
"1 Whether the plaintiff proves that in order to buy suit property from the respondents, he executed agreement to sale and paid total consideration amount?
2 Whether the plaintiff proves that the respondents handed over to him the possession of suit property?
3 Whether the plaintiff proves that though injunction order was passed, the respondents usurped the possession of suit property?
4 Whether the defendants prove that they are yet to recover Rs. 2,00,000/ from the plaintiff as the excess amount?
5 Whether the plaintiff was ready and willing to execute the
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C/SA/164/2018 JUDGMENT
contract? and still he is ready and willing?
6 Whether the plaintiff is entitled to get the relief sought for?
7 What order and decree?"
2.5 The issues framed by the Civil Court referred to above came to be
answered is as under:
"(1) Affirmative.
(2) Affirmative.
(3) Negative.
(4) Negative.
(5) Negative.
(6) Negative.
(7) As per final order."
2.6 It is pertinent to note that the Trial Court answered the first issue
with regard to payment of the entire sale consideration in the 'affirmative'. The Trial Court answered the second issue also with regard to the fact that the plaintiff was put in possession of the property also in the 'affirmative'. The fourth issue whether the defendants prove that they have yet to receive the amount of Rs.2 Lac has been answered in the 'negative'. Despite the same, the issue No.5 surprisingly came to be answered in the 'negative'. According to the Trial Court, the plaintiff was not ready and willing to perform his part of the contract. On such ground, the suit came to be dismissed.
2.7 At this stage, it is pertinent to note that in the written statement, the defendants took up a plea that the suit for specific performance of contract was not maintainable as the agreement to sale was Page 4 of 12 C/SA/164/2018 JUDGMENT unregistered. Although no such issue has been framed by the Trial Court, yet such defence or plea raised by the defendants came to be accepted by the Trial Court and the Trial Court recorded a finding that the suit is not maintainable on an unregistered agreement to sale.
2.8 As the suit came to be dismissed, the respondent herein - original plaintiff, being dissatisfied with the judgment and order, preferred Regular Civil Appeal No.30 of 2012 in the District Court at Rajkot. The regular civil appeal filed by the original plaintiff came to be allowed vide judgment and order dated 21st April 2018. The suit came to be decreed in favour of the plaintiff.
3 Being dissatisfied with the judgment and decree passed by the first Appellate Court, the original defendants are here before this Court with this Second Appeal under Section 100 of the C.P.C.
4 In the memorandum of Second Appeal, the following substantial questions of law have been formulated:
"(A) Whether Ld. Lower Appellate Court has erred in setting aside the judgment and decree passed by Ld. Trial Court by substituting its own reasons which are based on assumptions?
(B) Whether Ld. Lower Appellate Court has erred in law by allowing the appeal by substituting findings of Ld. Trial Court in the suit of specific performance of contract and Ld. Trial Court has rightly exercised its discretion judiciously after considering the material available on record?
(C) Whether Ld. Lower Appellate Court has erred in law by not applying the principles of Evidence Act by finding that burden to prove the identity of property is on plaintiff where in fact burden of proof become in Page 5 of 12 C/SA/164/2018 JUDGMENT significant when the both the parties have produced evidence?
(D) Whether the Ld. Lower Appellate Court has erred in law to decide and giving definite finding about the proper interpretation of documents for conferring title over suit land?
(E) Whether the judgment of the Ld. Lower Appellate Court is unjust, perverse and also without properly considering the evidence on record in accordance with provisions of law?
(F) Whether the Ld. Lower Appellate Court has committed gross error of law by giving vague finding that readiness and willingness of plaintiff for performance of his part of contract in view of S. 16 and 20 of Specific Relief Act.
(G) Whether the Ld. Lower Appellate Court erred in law by not considering that aspect that agreement to sell is unregistered document which cannot look into in view of S. 17 of Registration Act?"
5 Mr. Bhatt, the learned counsel appearing for the appellants - original defendants vehemently submitted that the first Appellate Court committed a serious error in allowing the appeal and passing a decree of specific performance in favour of the original plaintiff. Mr. Bhatt vehemently contended that the suit for specific performance on an unregistered agreement to sale could not have been held to be maintainable and the appeal ought to have been dismissed only on this ground alone. Mr. Bhatt submitted that in the agreement to sale, time was made the essence of the contract. Once time is made the essence of the contract, the parties are obliged to abide by the same. Despite expiry of six months, as fixed in the agreement to sale, no steps were taken by the plaintiff to get the sale deed executed in his favour. This conduct on Page 6 of 12 C/SA/164/2018 JUDGMENT the part of the plaintiff would suggest that he was not ready and willing to perform his part of the contract.
6 Mr. Bhatt submitted that the relief of specific performance of contract is discretionary in nature. It need not be granted just because it is lawful to do so. Having regard to the fact that the plaintiff did not take steps to get the sale deed executed, the first Appellate Court ought to have dismissed the appeal.
7 In such circumstances referred to above, Mr. Bhatt prays that there being merit in this Second Appeal, the same may be admitted on the substantial questions of law formulated in the memorandum of the Second Appeal.
8 On the other hand, this Second Appeal has been vehemently opposed by Mr. Mehul S. Shah, the learned senior counsel appearing for the respondent - original plaintiff. The respondent herein is on a caveat. Mr. Shah submitted that no error, not to speak of any error of law could be said to have been committed by the first Appellate Court in allowing the appeal and passing a decree of specific performance in favour of the plaintiff. He would submit that a suit for specific performance of contract is maintainable on an unregistered agreement to sale. He would submit that the Trial Court committed a serious error in dismissing the suit having answered the issues Nos.1 and 2 in the 'affirmative' and having answered the issue No.4 in the 'negative'. Mr. Shah would submit that the defendants have not disputed execution of the agreement as well as putting the plaintiff in possession on the date of the agreement including receipt of payment of Rs.1,50,000/ towards the sale consideration. If that be so, then there was nothing at the end of the plaintiff to do anything, except to call upon the defendants to execute the sale deed.
Page 7 of 12C/SA/164/2018 JUDGMENT 9 In such circumstances referred to above, Mr. Shah submitted that
there being no merit in this Second Appeal, the same may be dismissed.
10 Having heard the learned counsel appearing for the parties and having considered the two judgments of the Courts below, I am of the view that none of the questions formulated in the memorandum of Second Appeal could be termed as substantial question of law. They are all pure questions of fact. The first Appellate Court is the last and final Court of fact. The first Appellate Court, upon reappreciation of the evidence, has rightly allowed the appeal of the plaintiff and decreed the suit.
11 At the cost of repetition, I state that having accepted the entire amount towards the sale consideration and having put the plaintiff into possession of the property, it would not lie in the mouth of the plaintiff herein to say that the plaintiff was not ready and willing to perform his part of the contract.
12 With regard to the contention that a suit for specific performance of contract is not maintainable on an unregistered agreement to sale, I can do no better to answer this contention than by referring to and relying upon a decision of the Supreme Court in the case of S. Kaladevi v. V.R. Somasundaram and others [AIR 2010 SC 1654]. I may quote the relevant observations of the Supreme Court as under:
"10. Section 17 of 1908 Act is a disabling section. The documents defined in clauses (a) to (e) therein require registration compulsorily. Accordingly, sale of immovable property of the value of Rs. 100/ and more requires compulsory registration. Part X of the 1908 Act deals with the effects of registration and nonregistration. Section 49 gives teeth to Section 17 by providing effect of nonregistration of documents required to be registered. Section 49 reads thus:
"S.49. Effect of nonregistration of documents required to be registered. No document required by section 17 or by any Page 8 of 12 C/SA/164/2018 JUDGMENT 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."
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 Limited, 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 and Kashmir; the former Chief Court of Oudh; the Judicial Commissioner's Court at Peshawar, Ajmer and Himachal Page 9 of 12 C/SA/164/2018 JUDGMENT 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.
13. In Kalavakurti Venkata Subbaiah v. Bala Gurappagari Guruvi Reddy [AIR 1999 SC 2958], the question presented before this Court was whether a decree to enforce the registration of sale deed could be granted. That was a case where respondent therein filed a suit for specific performance seeking a direction to register the sale deed. The contention of the appellant, however, was that decree for specific performance based on unregistered sale deed could not be granted. This Court noticed the provisions contained in Part XII of 1908 Act, particularly Section 77, and difference of opinion between the various High Courts on the aspect and observed:
"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 Page 10 of 12 C/SA/164/2018 JUDGMENT 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 SubRegistrar 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. 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."
14. This Court then held that the first appellate court rightly took the view that under Section 49 of the 1908 Act, unregistered sale deed could be received in evidence to prove the agreement between the parties though it may not itself constitute a contract to transfer the property. It was held:
"......The document has not been presented by the respondent to the SubRegistrar at all for registration although the sale deed is stated to have been executed by the appellant as he refuses to cooperate with him in that regard. Therefore, various stages contemplated under Section 77 of the Act have not arisen in the present case at all. We do not think, in such a case when the vendor declines to appear before the SubRegistrar, the situation contemplated under Section 77 of the Act would arise. It is only on presentation of a document the other circumstances would arise. The first appellate court rightly took the view that under Section 49 of the Act the sale deed could be received in evidence to prove the agreement between the parties though it may not itself constitute a contract to transfer the property.....".
15. The issue before us is only with regard to the admissibility of unregistered sale deed dated 27.2.2006 in evidence and, therefore, it is neither appropriate nor necessary for us to consider the contention raised by learned counsel for the respondents about the maintainability of suit as framed by the plaintiff or the circumstances in which the sale deed was executed. If any issue in that regard has been struck by the trial court, Page 11 of 12 C/SA/164/2018 JUDGMENT obviously, such issue would be decided in accordance with law. Suffice, however, to say that looking to the nature of the suit, which happens to be a suit for specific performance, the trial court was not justified in refusing to admit the unregistered sale deed dated 27.2.2006 tendered by the plaintiff in evidence."
13 It is no doubt true that the relief of grant of specific performance is discretionary and it need not be granted only because it is lawful to grant, however, once the first Appellate Court has thought fit to grant such a decree having regard to the evidence on record, then this Court, in a Second Appeal under Section 100 of the C.P.C., should be extremely slow in disturbing such findings recorded by the first Appellate Court.
14 In view of the above, this Second Appeal fails and is hereby dismissed.
15 As the Second Appeal has been ordered to be dismissed, the connected civil application would not survive and the same is also disposed of.
(J.B. PARDIWALA, J.) CHANDRESH Page 12 of 12