Andhra HC (Pre-Telangana)
Banguru Ramathulasamma vs Yedem Masthan Reddy And Ors. on 10 August, 1998
Equivalent citations: 1998(5)ALD502, 1998(4)ALT796, 1999 A I H C 1, (1999) 1 CIVILCOURTC 213, (1999) 3 LANDLR 31, (1998) 5 ANDHLD 502, (1998) 4 ANDH LT 796, (1998) 2 LS 216
Author: R. Bayapu Reddy
Bench: R. Bayapu Reddy
ORDER
1. This revision Petition is filed by the first defendant in OS No. 284 of 1989 on the file of the District Munsif, Gudur questioning the impugned order dated 22-2-1996 holding that the disputed document dated 20-11-1981 sought to be marked by the plaintiff as evidence on his behalf was held to be an agreement of sale and not a sale deed and therefore admissible in evidence.
2. The first respondent herein is the plaintiff in the suit which was filed for the relief of the permanent injunction relating to the suit property against the present revision petitioner, who is the first defendant and also against the second and third defendants in the suit. The plaintiff is alleged to have purchased the suit property from second and third defendants under the disputed document dated 20-11-1981 which is described as an agreement of sale. During the course of evidence of the plaintiff the said document was sought to be marked as evidence on his behalf and the learned Counsel appearing for the first defendant who is contesting the suit raised an objection for making the said document on the ground that the document is in the nature of a sale deed and not a mere agreement of sale, that it is unstamped and unregistered and as such it is inadmissible in evidence. The lower Court rejected such objection by the impugned order relying upon the decision of this Court reported in Tinmam Gurappa v. Naidu Ramana Reddy. , and holding that it is only an agreement of sale and not a sale deed. Questioning the said orders the present revision petition is filed by the first defendant.
3. Heard both the Counsel.
4. In order to see whether a document is admissible in evidence or not, the nature and contents of such document are to be looked into. The suit document is dated 20-11-1981 under which the plaintiff is alleged to have purchased the immovable property for Rs.10,000/- from the second and third defendants. The salient features of the said document are that the entire sale consideration of Rs.10,000/- was received by the vendors and possession of the property was also delivered to the plaintiff under the said document. It is further mentioned in the said document that eversince the date of that document the vendee who is the plaintiff shall have absolute rights in that property in his own right. It is also mentioned that in case the plaintiff requires registered document to be executed in future such document can be obtained, it is clear from such averments in the disputed document that though it is styled as an agreement of sale and though it is further averred that the vendee can have a registered sale deed executed in case he desires to have such a registered document in future, the terms and conditions of the document clearly reveal that the rights in the property sold under the document were transferred to the plaintiff under the said document creating absolute rights in his favour eversince the execution of that document and possession of the property was also delivered to him and the entire sale consideration was received by the vendors. Under such circumstances, it can clearly be said that the disputed document is one which creates and declares the right to immovable property in favour of the vendee after extinguishing the right and title of the vendor under the said document itself. Section 17(1) (b) of the Indian Registration Act (for short "the Act') says that the documents which purport to create, declare assign limit or extinguish any right, title or interest of the value of Rs.100/- and upwards to or in immovable property shall be registered. Clause (v) of Section 17 (2) however provides that a document need not be registered if the document itself does not create, declare assign, limit or extinguish any right, title or interest of the value of Rs.100/- and upwards in any immovable property but merely creates a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right or interest. But, in the present case, even though a right to obtain a regular registered document in future is contemplated in the document and such right is given to the vendee, if he so desires, to have such a registered document in future, creating and declaring and assigning the rights in favour of the vendor in the immovable property after extinguishing their own rights in the property is not postponed till the execution of such a registered document in future and the said document does not merely create a right to obtain another registered document in future. As already stated above, rights of the vendors in the disputed property arc extinguished and such rights are created in favour of the vendees under the document itself and as such the document does not come under the exception mentioned under Clause (v) of Section 17(2) of the Act. Therefore, simply on account of the feet that the document is styled as an agreement of sale and also on account of the fact that the execution of a future registered document is contemplated in the disputed document such document cannot be considered only as agreement of sale as found by the lower Court. The disputed document in view of its specific terms and conditions creating and declaring rights of the vendee in the immovable property after extinguishing the rights of the vendors and as possession was delivered to the vendee thereby enabling him to enjoy the suit property eversince then and also as the entire sale consideration was received on the same day, such document can be considered only as a registered (sic regular) sale deed and not as mere agreement to sell. The lower Court has therefore erred in holding that the document is only an agreement of sale.
5. It is seen from a perusal of the impugned order that the lower Court does not even refer to the contents of the document before coming to the conclusion that it is only an agreement of sale and not regular sale deed. He passed the impugned order holding the document as agreement of sale only in view of the decision in Tirunam Gurappa's case (supra). But each case depends upon its own facts and the nature and contents of the disputed document. In the above said decision of this Court, the disputed document the contents of which are extracted in the judgment, does not reveal about the receipt of sale consideration. It is no doubt true that in the said disputed document also possession was delivered to the vendee and rights in the property were conferred upon the vendees even under that document and the execution of a registered document in future was contemplated. This Court, however, came to the conclusion, in view of the nature of the contents of the said document, that the said document is only an agreement of sale and not a sale deed. Such conclusion was arrived at on account of the fact that the document was styled as an agreement of sale and it further contemplated the execution of a registered sale deed in future in pursuance of such agreement. But the effect of the specific recitals in the disputed document concerned in that decision to the effect that eversince the date of execution the vendor wilt not have any rights in the properties that were sold was not specifically considered. The learned Judge also observed that when a document is construed, the entire document will have to be looked into for ascertaining the intention of the parties that each of the clauses by itself is not conclusive and that the intention of the parties will have to be gathered on a reading of the entire document. Having made such observations made, the learned Judge did not consider the effect of the recital to the effect that eversince the date of execution of the document the vendor has lost his rights in the property and will not claim any rights in the property in future before coming to the conclusion that the document is only an agreement of sale and not a regular sale deed. As already found above, if rights of the vendor in the property are extinguished and such rights are conferred upon the vendees under the document, such document, though styled as an agreement of sale and though execution of a registered document in future is contemplated in that document, it cannot be said, that it is a mere agreement of sale and not a sale deed inasmuch as the rights in the immovable property are conferred under that document itself upon the vendee.
6. Three decisions including the decision of the Supreme Court were cited before his lordship in the above mentioned decision in Tirunam Gurappa's case (supra) and the learned Judge tried to distinguish those decisions on the ground that those decisions were rendered in view of the nature and contents of the disputed document concerned in those cases. But a perusal of the said decisions including the decision of the Supreme Court clearly shows that in the present case the disputed document is to be held only as a sale deed and not a mere agreement to sell. One of the said decisions relied upon before the learned Judge in the above said decision in Tirunam Gurappa's case (supra) is the decision of the Supreme Court in Kasinath Bhasker v. B. Vishweshwar, . The disputed document in that case was a mortgage deed. While referring to the provisions of Section 17 of the Act their Lordships of the Supreme Court have observed in paragraph 16 after referring to the observations made by S.D. Mullah in his commentary as follows.
"Wcagree with Sir Dinsha Mulla at p. 86 of the 5th edition of his Indian Registration Act that, 'If the document itself creates an interest in immovable property, the fact that it contemplates the execution of another document will not exempt it from registration under this clause.' As we have seen, this document of itself limits or extinguishes certain interests in the mortgaged property. The operative words are reasonably clear. Consequently, the document is not one which merely confers a right to obtain another document. It confers the right only in certain contingencies, namely, 'if you so wish' or 'if necessity may arise'. Its purport is to effect an immediate alteration to effect an immediate extinguishment and limitation. Clause (10) merely confers an additional right, namely the right to obtain another document 'if you so wish' or 'if necessity may arise'. Therefore, the document in question is not one which merely creates a right to obtain another.'' It is clear from such observations made by their Lordships of the Supreme Court that when the disputed document of itself limits or extinguishes certain interests in the property and when such document is not one which merely confers right to obtain another document, the effect of such document is immediate extinguishment of the rights of the executant in the property and conferring such right in favour of the person in whose favour the document is executed and such document is compulsorily registerable as it is not a document which merely creates a right to obtain another document. It is further observed in paragraph 17 of the judgment that an agreement to sell or an agreement to transfer at some future date is to be distinguished because such document does not by itself purport to effect transfer and it merely embodies a present agreement to execute another document in future which will when executed have that effect. Such a document which merely contemplates execution of another document does not have the effect of extinguishment or limitation of the rights of the executant under that document, ft is clear from the observations made by their Lordships of the Supreme Court that if a disputed document does not by itself extinguish the rights of the vendor and does not confer such rights in the vendee, it is to be considered only as an agreement of sale and that if on the other hand the rights of the vendor are extinguished and such rights are conferred in favour of the vendee under that document itself it is not a document which merely creates a right to obtain another document which when executed alone will create rights in favour of the vendee. In the present case, the disputed document clearly states that under the document itself the rights of the vendor are extinguished and such rights were transferred in favour of the vendee to whom possession was also delivered after receiving the entire sale consideration and it is not mentioned in the document that such rights will be conferred upon the vendee only upon execution of regular registered sale deed in future. Therefore, simply because the document was described as an agreement of sale and also the execution of future registered sale deed is contemplated, if the vendee is willing for such course, such document cannot be considered as mere agreement of sale inasmuch as the rights of the vendor are extinguished in the immovable properties and such rights are conferred on the vendee. The lower Court relied only on the decision of this Court in Tirunam Gurappa 's case (supra) and failed to consider this aspect while referring to the decision of the Supreme Court in Kasinath's case (supra). What is observed by the learned Judge of mis Court in Tirunam Gurappa's case (supra) is that the learned Judges of the Supreme Court while considering that case held that the document itself viz., assignment of mortgage created interest in the property and therefore requires registration irrespective of the fact whether it contains a further clause contemplating the execution of another document and that such observations have no application to the facts of the case before him. But the learned Judge does not refer to the recitals in the disputed document before him to the effect that the rights of the vendor are extinguished under that document itself even though the execution of a future registered sale deed was contemplated. The learned Judge then proceeded to observe that the question in the case before him was whether the disputed document was an agreement of sale or an out right sale deed and that if it is to be considered as an agreement of sale the question of creating any interest in immovable property does not arise. It is to be observed with great respect to the learned Judge who rendered that decision that the question to be considered in such case is whether the rights of the vendor are extinguished and such rights are conferred upon the vendee under that document which has come up for consideration to decide whether the disputed document is an agreement of sale or sale deed and not vice versa i.e., when the document is described as an agreement of sale the further question whether such document itself creates any interest in the immovable property does not arise. Therefore, such observations made by the learned Judge in the said decision while trying to distinguish the decision in Kasinath's case (supra) cannot be accepted.
7. I Even in the decision in K. Santakumari v. K. Susheela Devi, , which was also referred to in Tirunam Gurappa's case (supra) it is clearly observed that in construing an instrument in order to decide whether it is an agreement to sell or a contract of sale the cumulative effect of the recitals contained therein and the relevant facts have to be taken into account, that the mere offer to execute and register a sale deed at a later date does not take away the effect of a clear recital transferring the right and title of the vendor to the vendee or change the character of a document from sale to agreement to sell. It is further observed that the mere use of the word 'agreement' is not conclusive of the nature of the document. It is therefore clear from the observations made in the said decision also that when the rights of the vendor are transferred in favour of the vendee under the agreement and possession of the property is also delivered, the mere use of the words describing the document as an agreement and enabling the vendee to obtain a future registered sale deed in case he desires to do so does not change the nature ofthe document from a sale deed to an agreement of sale.
8. In the decision in Madho Rao v. Pateiba, AIR 1953 Hyd. 225, it is observed by the Division Bench that when the document embodies a complete sale and not merely an executory contract and when the transfer of ownership is effected under the document itself, it cannot be considered as an agreement of sale. In the decision in Venkatasubbaiah v. Venkatachaiamaiah, 1961 ALT 983, which is sought to be relied upon by the learned Counsel appearing for the respondents it is specifically held that when any document by itself does not create, assign or limit or extinguish any right or interest in immovable property and which merely creates a right to obtain a document in future such a document need not be registered under Section I7(2)(v) of the Act. But in the present case, as already stated above, the disputed document extinguishes the right of the Vendor in the immovable property and creates such right in favour of the vendee and it is not a document which merely contemplates the execution of a registered document under which alone the right in the immovable property can be said to have been created in favour of the Vendee as and when it will be executed. Therefore, in view of the circumstances explained above, the orders of the lower Court cannot be sustained. The disputed document is to be considered only as a regular sale deed and not a mere agreement of sale. Inasmuch as the said document was not duly, stamped and was not registered under Section 17 (b) of the Act it cannot be admitted in evidence. Therefore, the orders of the lower Court are liable to be set aside.
9. In the result, the revision petition is allowed and the orders of the lower Court are set aside holding that the disputed document is not admissible in evidence. No Costs.