Gujarat High Court
Kiritbhai Dahyabhai Patel vs Gujarat Eco Infrastructure Pvt Ltd on 18 October, 2019
Equivalent citations: AIRONLINE 2019 GUJ 473, 2020 AIR CC 406 (GUJ)
Author: J. B. Pardiwala
Bench: J.B.Pardiwala, A.C. Rao
C/FA/479/2019 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 479 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE J.B.PARDIWALA Sd/
and
HONOURABLE MR.JUSTICE A.C. RAO Sd/
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1 Whether Reporters of Local Papers may be allowed YES
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
CIRCULATE THIS JUDGMENT IN THE SUBORDINATE
JUDICIARY
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KIRITBHAI DAHYABHAI PATEL
Versus
GUJARAT ECO INFRASTRUCTURE PVT LTD
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Appearance:
MR ROHAN A SHAH(7497) for the Appellant(s) No. 1,2,3,3.1,3.2,3.3
MR RUSHABH H SHAH(7594) for the Appellant(s) No. 1,2,3,3.1,3.2,3.3
MR SHITAL R PATEL(2166) for the Respondent(s) No. 1,2
MS MAITHILI MEHTA, AGP for the Respondent - State.
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CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
and
HONOURABLE MR.JUSTICE A.C. RAO
Date : 18/10/2019
CAV JUDGMENT
(PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) Page 1 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT
1. This First Appeal under Section 96 of the Code of Civil Procedure, 1908 (for short, 'the CPC') is at the instance of the original plaintiffs and is directed against the judgment and decree passed by the 3rd Additional Senior Civil Judge, Bharuch, dated 30th November 2017 below Exh.22 in the Special Civil Suit No.98 of 2015, by which the court rejected the plaint under the provisions of Order 7, Rule 11 of the CPC.
2. For the sake of convenience, the appellants herein shall be referred to as the plaintiffs and the respondents herein shall be referred to as the defendants.
3. It appears that the plaintiffs instituted the Special Civil Suit No.98 of 2015 in the court of the 3 rd Additional Senior Civil Judge, Bharuch, with the following prayers :
"(1) The old tenure ancestral agricultural land situated in the sim of mouje village Aladar, Taluka Vagra, District Bharuch, bearing Revenue Survey No.35 paiki-1 admeasuring Hec.Are.Sq.Mts. 9-59-11 having consideration value of Rs.49.62 of the ownership of the plaintiff and with regard to the said land a sale deed No.126/2009 was executed on 03/02/2009 the same being of insufficient consideration, it is humbly requested to declare that the defendants do not have any kind of right, claim, entitlement or authority over the same and to resolve that the sale deed is illegal and revoked.
(2) After executing the sale deed pursuant to the subject matter land/property the possession of the same is continuously with us the plaintiff herein above uninterrupted, it is humbly requested to resolve the same and to pass such an order.Page 2 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT
(3) To declare that as the possession of the said subject matter property/land is with us the plaintiff herein above the defendants do not have any kind of right, authority or claim to bringing any kind of obstruction or obstacle in it.
(4) To pass an order granting permanent relief restricting the defendants, their men, agents, servants and all concerns from raising any kind of rights against our rights pertaining to the subject matter property/land in any way, manner or kind.
(5) Without following any prescribed procedure of law the defendants shall not take away the possession of the subject matter land/property from us the plaintiff herein above in any way, manner or kind, it is humbly requested to pass such an order in favour of us the plaintiff and against the defendants in the vast interest of justice.
(6) To realize the costs of the suit from the defendants.
(7) To grant each and every other such further relief/s which the Honourable Court may deem fit and proper looking to the facts and circumstances of the case."
4. Thus, the suit came to be instituted by the plaintiffs for a declaration, cancellation of sale-deed and permanent injunction. The dispute pertains to agricultural land situated in the sim of Mauje village Aladar, Taluka Vagra, District Bharuch, bearing Revenue Survey No.35, admeasuring 9-hectare-59-aare and 11 sq.meters. The plaintiffs claim to be the owners of the land in question. The defendants expressed their desire to purchase the aforesaid land from the plaintiffs.
Page 3 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT5. It is the case of the plaintiffs that it was represented by the defendants that the land being agricultural and the defendants being non-agriculturist, they would purchase on the premise that the same is to be used for industrial purpose. According to the plaintiffs, the total sale consideration fixed was Rs.85,80,000=00 (Rupees Eighty-five Lakh Eighty Thousand only). The plaintiffs executed the sale-deed in favour of the defendants in good faith by accepting Rs.20 lakh (Rupees Twenty Lakh only) from the defendants paid by way of a demand draft issued upon the HDFC Bank Limited, Bharuch Branch, dated 10th January 2009. According to the plaintiffs, it was represented by the defendants that the balance amount of Rs.65,80,000=00 shall be paid after the permission is granted by the competent authority to use the land for industrial purpose and the land is transferred in the name of the defendants. According to the plaintiffs, although they had executed the sale-deed in favour of the defendants in good faith, yet the defendants have to still pay the balance amount of Rs.65,80,000=00. It is also the case of the plaintiffs that on the strength of the sale-deed the defendants got their names mutated in the record of rights. Thus, it is the case of the plaintiffs that the defendants failed to make the balance payment towards the sale consideration and, therefore, the sale-deed should be cancelled as the sale cannot be said to be valid.
6. The cause of action as pleaded in the plaint is as under :
"The cause of action for filing the present suit has arisen within the territorial jurisdiction of this Hon'ble Court as the defendant no.1 committed breach of trust of the plaintiffs by Page 4 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT executing a sale-deed dated 3.2.2009, by avoiding to pay the balance amount of the sale consideration as agreed upon by the defendants, to the plaintiffs, by making an application dated 15.6.2015 for mutation of their names in the revenue record with respect to the suit land, and on 10.9.2015 when the defendants started threatening to take over the possession."
7. It appears that the defendants preferred an application Exh.22 under Order 7, Rule 11 of the CPC in the court of the learned Senior Civil Judge, Bharuch, and prayed that the plaint of the Special Civil Suit No.98 of 2015 be rejected, on the ground that there was no cause of action to institute the suit as full consideration has been paid to the plaintiffs and the case put up by the plaintiffs is false. According to the defendants, the suit instituted by the plaintiffs in its very nature is not maintainable. According to the defendants, at the most, the plaintiffs can pray for recovery of the balance amount of sale consideration but cannot seek a declaration for cancellation of the entire sale-deed. According to the plaintiffs, the suit is even barred by the period of limitation.
8. The court below adjudicated the application, and vide order dated 30th November 2017, rejected the plaint. While rejecting the plaint, the court below observed as under :
"(6) On bare reading of the plaint it appears that an agricultural land of old tenure situated at Village Aladar, Taluka Vagra, Dist : Bharuch bearing Revenue Survey No. 35/1 admeasuring Hec.9-59-11 Are for the assessment Rs.49.60 ps. was in the ownership of present plaintiff and Page 5 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT the same was sold by the plaintiff to the defendant in the name of defendant No.2 and the sum of Rs. 22,00,000/-
was given and remaining consideration of Rs. 65,80,000/- was decided to be paid which was allegedly not paid till today. It is further, pleaded that on dtd. 03/02/09 a registered sale deed being No. 126/09 was executed at Sub-Registrar office, Vagra Taluka and after that Revenue proceeding for mutation in terms or that transaction were initiated. It is further pleaded that sum of Rs.65,80,000/- is not paid to the plaintiff till today and possession of the disputed land is with plaintiff, therefore, the registered sale deed No.126/09 and sale transaction was without consideration and without possession which pertains to be declared as "Null and Void".
(7) Therefore, the plaintiff has prayed to declare the said registered sale deed No. 126/09 as illegal, null and void, and to declare that the plaintiffs are in the direct possession without any obstruction till today, the defendants have no any right to interfere into the same.
(8) Looking to the averments, the suit is filed on dated 17/10/2015 for the cancellation of the sale-deed No. 126/09 and plaintiff has submitted a photo-copy of that sale-deed vide marked at 3/1 and defendant side has also submitted a photo-copy of sale-deed vide marked at 20/2 on bare reading of that photo-copies of sale deed, the same is presented and registered on Date 03/02/09 before Sub- Registrar of Vagra.
Page 6 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT(9) Considering the amount of sale consideration at para-7 of alleged sale deed discloses the payment of sale consideration/sale price wherein some cash amount as well as cheque or draft No. are disclosed and total sum of Rs. 85,80,000/- are clearly written on para No.21 of that sale deed. It can be seen from the document placed and relied upon for the plaintiff vide mark 3/1 and same document was placed and relied upon vide mark 20/2 discloses that the sum of Rs.85,80,000/- are duly paid to the plaintiff and after verifying that fact, the registration was done, now the fact that the sale is without proper consideration goes against that of the document mark 3/1.
(10) Further, the plaintiff has submitted that possession of suit property is with plaintiff till now and plaintiff is cultivating the same and plaintiffs have grown cotton crop and paid revenue since years 2009. This averment also goes against the document placed and relied upon by the plaintiff themselves vide mark 3/1 wherein page No. 25 discloses that there is no yielding from the suit property and there is huge cost of cultivation, therefore, plaintiff cannot afford cultivation over the suit property. This factual aspect also going against the pleadings and documentary evidence and on prima-facie it can be considered that the plaintiff is not clear in submitting that whether they are cultivating the suit property or not? Further, on page No.25 by mark 3/1 it is clearly seen that the possession of suit property is handed over to the defendant from the very same day of registration of sale deed. Considering the aspect of possession, the plaintiff side has not placed any cogent Page 7 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT evidence which can show that they are in direct possession of suit property. Per contra their pleading and documentary evidence discloses total different facts and opposite averments. Further, there is no any application for Panchnama by Court Commissioner filed till date, therefore the actual condition of disputed property did not come on record.
(15) Looking to the facts and record, considering the averments from both the sides and arguments, this court is of the view that the plaint is clearly time barred under Article 91 of the Limitation Act and cause of action arose in 2009 which is clearly time barred, and when the statute provides for deemed knowledge which is a statutory provision, there is no question of explaining of extending the limitation.
In Sopan Sukhdeo Sable & ors v/s Assistnt Charity Commissioner & ors (2004(3) SCC 137) it is held by the Hon'ble supreme court of India that...
"The basic question to be decided while dealing with an application filed under Order 7 Rule 11(a) of CPC is whether a real cause of action has been set out in the plaint or something purely illusory has been stated with a view to get around Order 7 Rule 11. The trial Court must remember that if on a meaningful and not formal reading of the plaint is manifestly vexatious and meritless in the sense of not disclosing a clear right to sue, it should exercise the power under Order Page 8 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT 7 Rule 11(a) taking care to see that the ground mentioned therein is fulfilled. If clever drafting has created the illusion of a cause of action, it has to be nipped in the bud at the first hearing by examining the party searchingly under Order 10 of the Code. It is true that by ingenious drafting a cause of action in the nature of red herrings cannot be brought into the judicial arena."
"There can not be any compartmentalization, dissection, segregation and inversions of the language of various paragraphs in the plaint. If such a course is adopted, it would run counter to the cardinal canon of interpretation according to which a pleading has to be read as a whole to ascertain its true import. It is not permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed us it stands without addition or subtraction or words or change of its apparent grammatical sense. The intention of the concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole. As the same it should be borne in mind that no pedantic approach should be adopted to defeat justice on hairsplitting technicalities."
9. Being dissatisfied with the judgment and decree passed by the court below, the plaintiffs are here before this Court with the present First Appeal.
Page 9 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT10. Mr.Rohan A.Shah, the learned counsel appearing for the plaintiffs, vehemently submitted that the court below committed a serious error in rejecting the plaint. He would submit that the plaint could not have been rejected on the ground of limitation. He would submit that for an inquiry under Order 7, Rule 11 of the CPC, only the pleadings of the plaintiffs can be looked into. The plaint cannot be rejected on the basis of the allegations made by the defendant in his written-statement or in an application for rejection of the plaint. He would submit that the court has to read the entire plaint as a whole to find out, whether it discloses a cause of action, and if it does, then the plaint cannot be rejected by the court exercising the powers under Order 7, Rule 11 of the CPC. He would submit that essentially whether the plaint discloses a cause of action is a question of fact which has to be gathered on the basis of the averments made in the plaint in its entirety taking those averments to be correct. According to Mr.Shah, the plaint could be rejected only if the cause of action is not pleaded at all in the plaint.
11. According to Mr.Shah, all the aforesaid aspects have been completely ignored by the court below while passing the impugned order.
12. Mr.Shah, in support is his submissions, has placed reliance on the following decisions :
(1) Chhotanben and another v. Kiritbhai Jalkrushnabhai Thakkar and others, (2018)6 SCC 422;Page 10 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT
(Averments in the plaint are required to be considered and limitation is a triable issue) (2) Vaish Aggarwal Panchayat v. Inder Kumar and others, 2015 SCC Online SC 751;
(Plaint cannot be rejected on the ground of limitation under Order 7, Rule 11(d) without proper pleadings, framing of issues and leading evidence) (3) Urvashiben and another v. Krishnakant Manuprasad Trivedi, 2019(1) SCALE 29;
(Merits and demerits of matter cannot be considered and whether the plaintiff had noticed refusal is an issue to be adjudicated) (4) Kuldeep Singh Pathania v. Bikram Singh Jayral, (2017)5 SCC 345;
(Cause of action can be gathered on the basis of the averments in the plaint) (5) Bhikhalalbhai Hemrajbhai Shah v. Vatsalaben Mahendrabhai Shah, 2012 LawSuit (Gujarat) 605 : (Special Civil Application No.8184 of 2007, decided on 1 st August 2012);
(Averments are to be gathered from reading the plaint as a whole to determine the cause of action. Mere ground that the plaintiff may not succeed cannot be a ground of rejection) Page 11 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT (6) Shantibhai Somabhai Patel and another v. Deceased Ranchodbhai Pujabhai Padhiyar and others, 2019 LawSuit (Gujarat) 165 : (Second Appeal No.168 of 2018, decided on 25th March 2019) (7) Parmar Narmadaben v. Amratlal Motibhai Prajapati, (2016)4 GLR 3205.
13. On the other hand, this Appeal has been vehemently opposed by Mr.Sheetal R.Patel, the learned counsel appearing for the defendants. Mr.Patel would submit that no error, not to speak of any error of law, could be said to have been committed by the court below in rejecting the plaint. He would submit that a combined reading of Section 8 and Section 54 of the Transfer of Property Act suggests that on execution and registration of a sale-deed, the ownership and all interests in the property would pass to the transferee.
14. Mr.Patel would submit that the plaintiffs have admitted in the plaint the receipt of Rs.20 lakh by way of a demand draft. According to Mr.Patel, the balance amount was, thereafter, paid to the defendants in cash and only after the entire sale consideration was paid, that the plaintiffs executed the sale-deed in favour of the defendants.
15. In such circumstances, according to Mr.Patel, on the date of the institution of the suit, the plaintiffs had no cause of action against the defendants.
16. Mr.Patel would submit that the plaint has been rightly rejected by the court below and no interference is warranted at Page 12 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT the end of this Court in exercise of its supervisory jurisdiction under Article 227 of the Constitution of India. In such circumstances referred to above, Mr.Patel prays that there is no merit in this First Appeal, therefore, the same be dismissed.
ANALYSIS :
17. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is, whether the court below committed any error in passing the impugned order.
18. The case of the plaintiffs is very specific. According to the plaintiffs, they agreed to sell the land in question in favour of the defendants for a total sale consideration of Rs.85,80,000=00. Only an amount of Rs.20 lakh was paid by the defendants to the plaintiffs. Acting in good faith and relying upon the defendants, the plaintiffs executed the sale-deed in favour of the defendants with an understanding that the balance amount would be paid once the necessary permission is granted by the competent authority in favour of the defendants to use the land for industrial purpose. There is a clear allegation of fraud on the part of the defendants. On the other hand, the defence of the defendants is that the entire sale consideration has been paid. In fact, the defendants have gone to the extent of submitting that the balance amount was paid to the plaintiffs in cash. This fact has been outright denied by the plaintiffs. Whether the full consideration has been paid or not, is a question of fact and can be decided only after giving an opportunity to the plaintiff to prove his case that the defendants have not paid the total sale consideration.
Page 13 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT19. At this stage, we deem it appropriate to quote Sections 8 and 54 respectively of the Transfer of Property Act :
"8. Operation of transfer.--- Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the properly, and in the legal incidents thereof.
Such incidents include, where the property is land, the easements annexed thereto the rents and profits thereof accruing after the transfer, and all things attached to the earth;
and, where the property is machinery attached to the earth, the moveable parts thereof;
and, where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things provided for permanent use therewith;
and, where the property is a debt or other actionable claim, the securities therefor (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer;
and, where the property is money or other property yielding income, the interest or income thereof accruing after the transfer takes effect."Page 14 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT
"54. 'Sale' defined.--- 'Sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Sale how made.--- Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
Contract for sale.--- A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property."
20. The definition indicates that in order to constitute a sale, there must be transfer of ownership from one person to another, i.e., all rights and interests in the properties which are possessed by that person are transferred by him with his free consent to Page 15 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT another person. The transferor cannot retain any part of his interest or right in that property, or else it would not be a sale. The definition further says that the transfer of ownership has to be for a 'price paid or promised or part-paid and part-promised'. Price thus constitutes an essential ingredient of the transaction of sale. The words 'price paid or promised or part-paid and part-promised' indicate that the actual payment of the whole of the price at the time of the execution of sale deed is not a sine qua non to the completion of the sale. Even if the whole price is not paid but the document is executed and thereafter registered, if the property is of the value of more than Rs.100, the sale would be complete.
21. The word 'price' is used in its ordinary sense as meaning money only. It is used in the same sense as in section 77 of the Indian Contract Act, 1872 as enacted. The Supreme Court has held that though 'price' is not defined in the TP Act, it is used in the same sense as in the Sale of Goods Act, 1930, and means the money consideration for the sale of goods (see CIT v. Motor and General Stores (P) Ltd., AIR 1967 SC 200). The Supreme Court has also held that the presence of a money consideration is an essential element in a transaction of sale; if the consideration is not money, but some other valuable consideration, it may be an exchange or barter, but not a sale.
22. Where the intention of the parties is that the passing of the title would depend upon the passing of the consideration, evidence is admissible for the purpose of contradicting the recital in the deed acknowledging the receipt of the consideration.
Page 16 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT23. In Bishundeo Narain Rai vs. Anmol Devi & Ors., reported in 1998(7) SCC 498, the Supreme Court had the occasion to consider the question as to when the ownership and title in a property will pass to the transferee, under a deed of conveyance. The Supreme Court observed :
"Section 8 of the Transfer of Property Act declares that on a transfer of property all the interests which the transferor has or is having at that time, capable of passing in the property and in the legal incidence thereof, pass on such a transfer unless a different intention is expressed or necessarily implied.
A combined reading of Section 8 and Section 54 of the Transfer of Property Act suggests that though on execution and registration of a sale deed, the ownership and all interests in the property pass to the transferee, yet that would be on the terms and conditions embodied in the deed indicating the intention of the parties. It follows that on execution and registration of a sale deed, the ownership title and all interests in the property pass to the purchaser unless a different intention is either expressed or necessarily implied which has to be proved by the party asserting that the title has not passed on registration of the sale deed. Such intention can be gathered by intrinsic evidence, namely, from the averments in the sale-deed itself or by other attending circumstances subject, of course, to the provisions of Section 92 of the Evidence Act, 1872."
24. In Kaliaperumal vs. Rajagopal & Anr., reported in 2009(4) SCC 193, the Supreme Court again considered the issue and held:
Page 17 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT"It is now well settled that payment of entire price is not a condition precedent for completion of the sale by passing of title, as Section 54 of Transfer of Property Act, 1882 ("the Act", for short) defines `sale' as a transfer of ownership in exchange for a price paid or promised or part paid and part promised. If the intention of parties was that title should pass on 10 execution and registration, title would pass to the purchaser even if the sale price or part thereof is not paid. In the event of non-payment of price (or balance price as the case may be) thereafter, the remedy of the vendor is only to sue for the balance price.
He cannot avoid the sale. He is, however, entitled to a charge upon the property for the unpaid part of the sale price where the ownership of the property has passed to the buyer before payment of the entire price, under Section 55(4)
(b) of the Act. Normally, ownership and title to the property will pass to the purchaser on registration of the sale deed with effect from the date of execution of the sale deed. But this is not an invariable rule, as the true test of passing of property is the intention of parties. Though registration is prima facie proof of an intention to transfer the property, it is not proof of operative transfer if payment of consideration (price) is a condition precedent for passing of the property.
The answer to the question whether the parties intended that transfer of the ownership should be merely by execution and registration of the deed or whether they intended the transfer of the property to take place, only after Page 18 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT receipt of the entire consideration, would depend on the intention of the parties. Such intention is primarily to be gathered and determined from the recitals of the sale deed. When the recitals are insufficient or' ambiguous the surrounding circumstances and conduct of parties can be looked into for ascertaining the intention, subject to the limitations placed by section 92 of Evidence Act. x x x x There is yet another circumstance to show that title was intended to pass only after payment of full price. Though the sale deed recites that the purchaser is entitled to hold, possess and enjoy the scheduled properties from the date of sale, neither the possession of the properties nor the title deeds were delivered to the purchaser either on the date of sale or thereafter.
It is admitted that possession of the suit properties purported to have been sold under the sale deed was never delivered to the appellant and continued to be with the respondents. In fact, the appellant, therefore, sought a decree for possession of the suit properties from the respondents with mesne profits. If really the intention of the parties was that the title to the properties should pass to the appellant on execution of the deed and its registration, the possession of the suit properties would have been delivered to the appellant."
25. Where the sale deed recites that on receipt of the total consideration by the vendor, the property was conveyed and possession was delivered, the clear intention is that the title Page 19 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT would pass and possession would be delivered only on payment of the entire sale consideration. Therefore, where the sale deed recited that on receipt of the entire consideration, the vendor was conveying the property, but the purchaser admits that he has not paid the entire consideration or if the vendor proves that the entire sale consideration was not paid to him, the title in the property would not pass to the purchaser. (see Janak Dulari Devi and another v. Kapildeo Rai and another, reported in (2011)6 SCC
555)
26. We may refer to and rely upon a decision of this Court in the case of Parmar Narmadaben v. Amratlal Motibhai Prajapati, reported in 2016(4) GLR 3205. M.R.Shah, J. (as His Lordship then was), speaking for the bench in almost identical facts, had the occasion to deal with the subject, more particularly, the power of the court to reject the plaint on the grounds on which the court below has rejected the plaint. We quote the relevant observations thus :
"At the outset it is required to be noted that in the present case the original defendant submitted the application at Exh.14 to reject the plaint in exercise of powers under Order VII Rule 11(a) and (d) of the CPC. However, by impugned order as such the learned Judge has rejected the plaint only under Order VII Rule 11(d) of the CPC and not under Order VII Rule 11(a) of the CPC viz. that the plaint does not disclose any cause of action. That while rejecting the plaint (para 18) the learned Judge has observed as under:
"18. It is to be noted that the plaintiff had rights and interest in the disputed property which was sold to Page 20 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT defendant. Looking to the pleading and relief claimed by the plaintiff are not according to the cause of action set out by the plaintiff in para-6 of the plaint. Hence, considering the ratio laid down in above referred judgments and averments made in the plaint and relief claimed by plaintiff, this Court is of the opinion that the suit of the plaintiff is not tenable according to law, hence, as discussed here in above, I pass the following order in the interest of justice.
Having heard learned advocates appearing for respective parties, we failed to appreciate the findings recorded by the learned Judge that the suit of plaintiff is not tenable according to law and therefore, the same is liable to be rejected under Order VII Rule 11(d) of the CPC. At the outset it is required to be noted that initially the learned Counsel appearing on behalf of the original defendant relied upon Section 54 of the Transfer of Property Act in support of his submission that the suit is barred by law. However, subsequently, he has fairly conceded that the application of the original defendant be restricted to the application below Order VII Rule 11(a) of the CPC viz. the plaint does not disclose any cause of action and therefore, elaborate submissions have been made by the learned advocates appearing for respective parties with respect to applicability of Order VII Rule 11(d) of the CPC. Even otherwise having heard learned Counsel appearing for the respective parties and considering the averments in the plaint and the relief sought and even considering Section 54 of the Transfer of Property Act read with Section 92 of the Evidence Act, we Page 21 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT are of the opinion that it cannot be said that the suit and/or the relief sought in the plaint can be said to be barred by any law more particularly the Transfer of Property Act. Section 54 of the Transfer of Property Act speaks about transfer of ownership, however provided the full sale consideration is paid or part consideration is paid and part consideration is to be paid in future. Therefore, considering Section 54 of the Transfer of Property Act read with Section 92 of the Evidence Act, it can be said that there is a presumption of execution of the sale deed but there cannot be any presumption of actual payment of sale consideration even if it is mentioned in the sale deed that a particular amount towards full sale consideration has been paid. The contents in the sale deed with respect to payment of sale consideration are always question of fact which is required to be proved by leading evidence. It is required to be noted that in the plaint it is specifically averred and alleged by the plaintiff that though in the sale deed it is stated that Rs.10 crores towards sale consideration has been paid by cheques, there is no averment in the application below Exh.14 submitted by the original defendant that he has actually paid the full consideration of Rs.10 crores by cheques as stated in the sale deed and how and by which cheques they are paid. Under the circumstances, we are of the opinion that the suit / plaint is not liable to be rejected under Order VII Rule 11(d) of the CPC.
Now, so far as the applicability of Order VII Rule 11(a) of the CPC is concerned, it is the case on behalf of the original defendant that the plaintiff is not entitled to the reliefs Page 22 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT which are sought in the plaint and therefore, the plaintiff has no right to sue and pray for the reliefs prayed in the suit and therefore, the plaint is liable to be rejected under Order VII Rule 11(a) of the CPC. Number of submissions have been made relying upon the some of decisions referred to herein above that the only remedy available to the plaintiff is the non-payment of balance sale consideration and the plaintiff cannot pray and/or is not entitled to the relief of cancellation of the sale deed is concerned, we are afraid, on the aforesaid ground the plaint can be rejected in exercise of powers under Order VII Rule 11(a) of the CPC. Non-disclosure of the cause of action in the plaint and whether the plaintiff is entitled to the reliefs sought in the plaint, both are different. In a given case it may happen that when the suit is filed, it discloses the cause of action but after the trial the plaintiff may not be entitled to certain reliefs. Therefore, on the aforesaid ground the plaint cannot be rejected in exercise of powers under Order VII Rule 11(a) of the CPC.
As per the catena of decisions of the Hon'ble Supreme Court, while considering the application under Order VII Rule 11(a) of the CPC, only the averments in the plaint are required to be seen. If any decisions are required on the point, it is in the case of Sopan Sukhdeo Sable (Supra). Considering the averments in the plaint more particularly in para 6, it cannot be said that the plaint does not disclose any cause of action. Cause of action pleaded in the plaint is playing fraud and non-payment of the sale consideration of the Rs.10 Crores alleged to have been paid by cheques and so stated in the sale deed. Therefore, it cannot be said that on bare reading Page 23 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT of the plaint it does not disclose any cause of action at all.
It is the case on behalf of the original defendant and as submitted by Shri Sanjanwala, learned Senior Advocate appearing on behalf of the original defendant that the plaintiff is not entitled to such a relief and therefore, the relief of cancellation of the sale deed for non-payment of sale consideration and therefore, she has no right to sue and therefore, the plaint is liable to be rejected under Order VII Rule 11(a) of the CPC. The aforesaid submission seems to be attractive but liable to be rejected. The provisions of Order VII Rule 11(a) of the CPC is required to be considered very strictly and in exceptional circumstances as the plaint is being rejected at the threshold and the plaintiff shall be non-suited without trial and before the proceedings of the suit are commenced. Considering the averments in the plaint disclosing the cause of action and the original plaintiff being one of the co-owner, it cannot be said that she has no right to sue at all. As observed herein above, in a given case the plaintiff may not get any relief as prayed. But if the plaint discloses cause of action and the plaintiff has a right to sue, the plaint cannot be rejected in exercise of powers under Order VII Rule 11(a) of the CPC. Even otherwise there are divergent views of different High Courts whether the plaintiff is entitled to the reliefs which are sought in the plaint. Under the circumstances and in the facts and circumstances of the case, the plaint is not liable to be rejected under Order VII Rule 11(a) of the CPC. As observed herein above, as such by passing the impugned order the learned Judge has rejected the plaint in exercise of powers under Order VII Rule 11(d) of the CPC. However, as the Page 24 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT original application was to reject the plaint under Order VII Rule 11(a) of the CPC also and elaborate submissions have been made by the learned Counsel appearing for the respective parties, we have considered the issue whether in the facts and circumstances of the case, the plaint is liable to be rejected in exercise of powers under Order VII Rule 11(a) of the CPC and in the facts and circumstances of the case, considering the averments in the plaint disclosing cause of action and more particularly even in the application it is not the case on behalf of the defendant at all that he has paid the full consideration of Rs.10 crores by cheques so stated in the sale deed either to the plaintiff and/or other co-owners. The aforesaid is required to be considered vis-a-vis the averments and allegations in the plaint that a fraud has been committed inasmuch as though no sale consideration alleged to have been paid by cheques has been paid, the sale deed is got executed by the persons who are illiterate."
27. On the point of limitation, the court below has observed as under :
"(15) Looking to the facts and record, considering the averments from both the sides and arguments, this court is of the view that the plaint is clearly time barred under Article 91 of the Limitation Act and cause of action arose in 2009 which is clearly time barred, and when the statute provides for deemed knowledge which is a statutory provision, there is no question of explaining of extending the limitation."Page 25 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT
28. We fail to understand how Article 91 of the Limitation Act could have been invoked in the case on hand. Article 91 reads thus :
Description of suit Period of Time from which Limitation period begins to run
91. For compensation,--
(a) for wrongfully taking or Three When the person detaining any specific movable years having the right to the property lost, or acquired by possession of the theft, or dishonest property first learns in misappropriation, or conversion. whose possession it is.
(b) for wrongfully taking or Three When the property is
injuring or wrongfully detaining years wrongfully taken or
any other specific movable injured, or when the
property. detainer's possession
becomes unlawful.
29. Article 91 applies only to the suits for compensation. We fail to understand on what basis the court below has come to the conclusion that the suit filed by the plaintiff is for compensation.
The entire approach of the court below on the point of limitation is absolutely incorrect. If at all any Article is to be applied for the purpose of limitation, then it has to be Article 59 of the Act, 1963. In any view of the matter, having regard to the averments in the plaint, more particularly, the averments as regards the cause of action, we are of the view that the issue regarding the suit being barred by limitation is a triable issue and for which reason the plaint could not have been rejected at the threshold in exercise of the powers under Order 7, Rule 11(d) of the CPC. It is not a case where the suit from the statement made in the plaint could be said to be barred by law.
Page 26 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT30. The Supreme Court, in the case of Chhotanben and another v. Kiritbhai Jalkrushnabhai Thakkar and others, reported in (2018)6 SCC 422, had observed as under :
"15. What is relevant for answering the matter in issue in the context of the application under Order VII Rule 11(d), is to examine the averments in the plaint. The plaint is required to be read as a whole. The defence available to the defendants or the plea taken by them in the written statement or any 14 application filed by them, cannot be the basis to decide the application under Order VII Rule 11(d). Only the averments in the plaint are germane. It is common ground that the registered sale deed is dated 18th October, 1996. The limitation to challenge the registered sale deed ordinarily would start running from the date on which the sale deed was registered. However, the specific case of the appellants (plaintiffs) is that until 2013 they had no knowledge whatsoever regarding execution of such sale deed by their brothers - original defendant Nos.1 & 2, in favour of Jaikrishnabhai Prabhudas Thakkar or defendant Nos.3 to 6. They acquired that knowledge on 26.12.2012 and immediately took steps to obtain a certified copy of the registered sale deed and on receipt thereof they realised the fraud played on them by their brothers concerning the ancestral property and two days prior to the filing of the suit, had approached their brothers (original defendant Nos.1 & 2) calling upon them to stop interfering with their possession and to partition the property and provide exclusive possession of half (1/2) portion of the land so designated towards their share. However, when they realized 15 that the original defendant Nos.1 & 2 would not Page 27 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT pay any heed to their request, they had no other option but to approach the court of law and filed the subject suit within two days therefrom. According to the appellants, the suit has been filed within time after acquiring the knowledge about the execution of the registered sale deed. In this context, the Trial Court opined that it was a triable issue and declined to accept the application filed by respondent No.1 (defendant No.5) for rejection of the plaint under Order VII Rule 11(d). That view commends to us.
16. The High Court on the other hand, has considered the matter on the basis of conjectures and surmises and not even bothered to analyse the averments in the plaint, although it has passed a speaking order running into 19 paragraphs. It has attempted to answer the issue in one paragraph which has been reproduced hitherto (in paragraph 7). The approach of the Trial Court, on the other hand, was consistent with the settled legal position expounded in Saleem Bhai and others v. State of Maharashtra and Others, (2003)1 SCC 557, Mayar (H.K.) Ltd. and others v. Owners & Parties, Vessel M.V. Fortune Express and others, (2006)3 SCC 100, and also T.Arivandandam v. T.V. Satyapal and another, (1977)4 SCC
467.
17. These decisions have been noted in the case of Church of Christ Charitable Trust and Educational Charitable Society Vs. Ponniamman Educational Trust, (2012)8 SCC 706, where this Court, in paragraph 11, observed thus:Page 28 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT
"11. This position was explained by this Court in Saleem Bhai v. State of Maharashtra, in which, while considering Order 7 Rule 11 of the Code, it was held as under: (SCC p. 560, para 9) "9. A perusal of Order 7 Rule 11 CPC makes it clear that the relevant facts which need to be looked into for deciding an application thereunder are the averments in the plaint. The trial court can exercise the power under Order 7 Rule 11 CPC at any stage of the suit-before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial. For the purposes of deciding an application under clauses (a) and (d) of Rule 11 of Order 7 CPC, the averments in the plaint are germane; the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage, therefore, a direction to file the written statement without deciding the application under Order 7 Rule 11 CPC cannot but be procedural irregularity touching the exercise of jurisdiction by the trial court."
It is clear that in order to consider Order 7 Rule 11, the court has to look into the averments in the plaint and the same can be exercised by the trial court at any stage of the suit. It is also clear that the averments in Page 29 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT the written statement are immaterial and it is the duty of the Court to scrutinise the averments/pleas in the plaint. In other words, what needs to be looked into in deciding such an application are the averments in the plaint. At that stage, the pleas taken by the defendant in the written statement are wholly irrelevant and the matter is to be decided only on the plaint averments. These principles have been reiterated in Raptakos Brett & Co. Ltd. v. Ganesh Property, (1998)7 SCC 184 and Mayar (H.K.) Ltd. v. Vessel M.V. Fortune Express, (2006)3 SCC 100."
18. The High Court has adverted to the case of Church of Christ Charitable Trust and Educational Charitable Society (supra), which had occasion to consider the correctness of the view taken by the High Court in ordering rejection of the plaint in part, against one defendant, on the ground that it did not disclose any cause of action qua that defendant. The High Court has also noted the decision relied upon by the contesting respondents in the case of Mayur (H.K.) Ltd. and Ors. (supra), which has restated the settled legal position about the scope of power of the Court to reject the plaint under Order VII Rule 11(d) of CPC.
19. In the present case, we find that the appellants (plaintiffs) have asserted that the suit was filed immediately after getting knowledge about the fraudulent sale deed executed by original defendant Nos.1 & 2 by keeping them in the dark about such execution and within two days from Page 30 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT the refusal by the original defendant Nos.1 & 2 to refrain from obstructing the peaceful enjoyment of use and possession of the ancestral property of the appellants. We affirm the view taken by the Trial Court that the issue regarding the suit being barred by limitation in the facts of the present case, is a triable issue and for which reason the plaint cannot be rejected at the threshold in exercise of the power under Order VII Rule 11(d)."
31. The Supreme Court, in the case of Vaish Aggarwal Panchayat (supra), had observed as under :
"14. In this regard a reference to a three-Judge Bench decision in Balasaria Construction (P) Ltd. v. Hanuman Seva Trust and others would be fruitful. Be it noted the said case was referred to a larger Bench vide Balasaria Construction (P) Ltd. v. Hanuman Seva Trust. The order of reference reads as follows:-
"4. This case was argued at length on 30-8-2005. Counsel appearing for the appellant had relied upon a judgment of this Court in N.V. Srinivasa Murthy v. Mariyamma for the proposition that a plaint could be rejected if the suit is ex facie barred by limitation. As against this, counsel for the respondents relied upon a later judgment of this Court in Popat and Kotecha Property v. State Bank of India Staff Assn. in respect of the proposition that Order 7 Rule 11(d) was not applicable in a case where a question has to be decided on the basis of fact that the suit was barred Page 31 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT by limitation. The point as to whether the words "barred by law" occurring in Order 7 Rule 11(d) CPC would include the suit being "barred by limitation"
was not specifically dealt with in either of these two judgments, cited above. But this point has been specifically dealt with by the different High Courts in Mohan Lal Sukhadia University v. Priya Soloman, Khaja Quthubullah v. Govt. of A.P., Vedapalli Suryanarayana v. Poosarla Venkata Sanker Suryanarayana, Arjan Singh v. Union of India wherein it has been held that the plaint under Order 7 Rule 11(d) cannot be rejected on the ground that it is barred by limitation. According to these judgments the suit has to be barred by a provision of law to come within the meaning of Order 7 Rule 11 CPC. A contrary view has been taken in Jugolinija Rajia Jugoslavija v. Fab Leathers Ltd., National Insurance Co. Ltd. v. Navrom Constantza, J. Patel & Co. v. National Federation of Industrial Coop. Ltd. and State Bank of India Staff Assn. v. Popat & Kotecha Property. The last judgment was the subject-matter of challenge in Popat and Kotecha Property v. State Bank of India Staff Assn. This Court set aside the judgment and held in para 25 as under:
"25. When the averments in the plaint are considered in the background of the principles set out in Sopan Sukhdeo case the inevitable conclusion is that the Division Bench was not right in holding that Order 7 Rule 11 CPC was Page 32 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding with the assumption that only the non-execution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they have independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years needs evidence to be adduced. It is not a case where the suit from statement in the plaint can be said to be barred by law. The statement in the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11. This is not so in the present case."
5. Noticing the conflict between the various High Courts and the apparent conflict of opinion expressed by this Court in N.V. Srinivasa Murthy v. Mariyamma and Popat and Kotecha Property v. State Bank of India Staff Assn. the Bench referred the following question of law for consideration to a larger Bench:
"Whether the words 'barred by law' under Order 7 Rule 11(d) would also include the ground that it is barred by the law of limitation.""
15. The three-Judge Bench opined that there was no conflict of opinion and thereafter the matter came back to the Page 33 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT Division Bench for adjudication. The Division Bench reproduced what has been stated by the three-Judge Bench. It is as under:-
"Before the three-Judge Bench, counsel for both the parties stated as follows:
"...It is not the case of either side that as an absolute proposition an application under Order 7 and Rule 11(d) can never be based on the law of limitation. Both sides state that the impugned judgment is based on the facts of this particular case and the question whether or not an application under Order 7 Rule 11(d) could be based on law of limitation was not raised and has not been dealt with. Both sides further state that the decision in this case will depend upon the facts of this case."
16. After so stating, the Division Bench opined that in the facts of the said case, the suit could not be dismissed as barred by limitation without proper pleadings, framing of issue on limitation and taking evidence, for question of limitation is a mixed question of fact and law and on ex-facie reading of the plaint it could not be held that the suit was barred by time."
32. The Supreme Court, in the case of Mayar (H.K.) Ltd. v. Vessel M.V.Fortune Express, reported in (2006)3 SCC 100, has dealt with a similar issue, which reads thus :
Page 34 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT"12. From the aforesaid, it is apparent that the plaint cannot be rejected on the basis of the allegations made by the defendant in his written statement or in an application for rejection of the plaint. The court has to read the entire plaint as a whole to find out whether it discloses a cause of action and if it does, then the plaint cannot be rejected by the court exercising the powers under Order 7 Rule 11 of the Code. Essentially, whether the plaint discloses a cause of action, is a question of fact which has to be gathered on the basis of the averments made in the plaint in its entirety taking those averments to be correct. A cause of action is a bundle of facts which are required to be proved for obtaining relief and for the said purpose, the material facts are required to be stated but not the evidence except in certain cases where the pleadings relied on are in regard to misrepresentation, fraud, willful default, undue influence or of the same nature. So long as the plaint discloses some cause of action which requires determination by the court, the mere fact that in the opinion of the Judge the plaintiff may not succeed cannot be a ground for rejection of the plaint. ..."
33. The Supreme Court, in the case of Virender Nath Gautam v. Satpal Singh, (2007)3 SCC 617, has dealt with a similar issue. Para 52 reads as follows :
"52. The High Court, in our considered opinion, stepped into prohibited area of considering correctness of allegations and evidence in support of averments by entering into the merits of the case which would be permissible only at the stage of trial of the election petition and not at the stage of Page 35 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT consideration whether the election petition was maintainable and dismissed the petition. The said action, therefore, cannot be upheld and the order deserves to be set aside."
34. Mr.Patel in the last submitted that even if the entire case put up by the plaintiffs is believed or accepted to be true, the reliefs prayed for in the plaint cannot be granted. In other words, according to Mr.Patel, if it is the case of the plaintiffs that full sale consideration was not paid on the date of the execution of the sale-deed and the understanding between the parties was that the balance sale consideration shall be paid by the purchaser after he obtains the necessary permission to put the land for industrial use, then at the most the plaintiffs can pray for recovery of the balance amount of the sale consideration but the plaintiffs cannot pray for cancellation of the entire sale-deed. In fact, we see no good reason to enter into this controversy in the present case. We have only examined the matter from a limited angle, i.e. whether the plaint could have been rejected by the court below.
35. However, in the aforesaid context, we may refer to some case-law.
36. A Division Bench of the Madhya Pradesh High Court, in the case of Sukaloo v. Punau, reported in AIR 1961 (MP) 176, had observed as under :
"6. The finding of the Courts below that the amount of Rs.4000/- was not paid under the sale-deed was based on a consideration of the pecuniary circumstances of the Page 36 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT plaintiff. It is a finding of fact which was binding in second appeal and was therefore accepted by the learned Single Judge. However, the decision of the Courts below was reversed by the learned Single Judge on two grounds, viz.,
(i) that although the sale was without consideration, the title in the property had passed to the plaintiff by the execution and the registration of the sale-deed; and (ii) that the sale-deed being without consideration amounted to a gift.
Accordingly, the claim for damages was decreed for Rs. 500/- which was the value of the crop as found by the Courts below.
7. The first point which arise, in this appeal is whether the sale-deed, being without consideration, passed the title in the property to the plaintiff-respondent. Section 54 of the Transfer of Property Act provides that a sale must be (i) by a registered document if it is worth more than Rs. 100/-; and
(ii) there must be a price paid or promised or part-paid and part-promised. There is little difficulty in holding that title in property can pass by sale even if no consideration is paid provided that the parties intend that it should be paid at some future date. The difficulty arises, in the instant case, on account of the fact that the recital that the whole consideration had been paid before the execution of lie deed has been found to be false.
8. The point arose directly for consideration on facts very much similar to the present case in Hemraj Manvari v. Trimbav Kunbi AIR 1924 Nag 146. Hallifax, A. J.C., deciding that case observed as follows :
Page 37 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT"In all the rulings cited as apparently contradictory there was a transfer of ownership made in the prescribed manner which is the first of the two essentials of a sale. But in every case in which there was a promise of payment it is held that the second essential of a sale is present, and the whole definition is satisfied where the promise was subsequently kept or broken. So also in each case in which there was neither payment nor promise, it is held that the second essential is absent and the definition is not satisfied."
A contrary view was taken by the Patna High Court in Bhonu Lal v. W.A. Vincent, AIR 1922 Pat 619. A distinction was drawn in that case between an ordinary contract and a conveyance. Interpreting Section 54 of the Transfer of Property Act it was held that it is not an essential condition for a sale that the purchase money should be paid. The following observations made in that decision are pertinent :
"I cannot do better than quote the weighty observation of Farran, C.J., in Tatia v. Babaji, ILR 22 Bom 176, I am not, however, said the distinguished Chief Justice, as at present advised, prepared to assent to the train of thought which puts conveyances of lands in the Mofussil, perfected by possession or registration, where the consideration expressed in the conveyance to have been paid has not in fact been paid, in the same category as contracts void for want of consideration. The radical distinction between a Page 38 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT perfected conveyance and a contract does not seem to have been sufficiently borne in mind throughout the judgment'.
In my opinion, the document operated as a conveyance on the date of its execution, unless indeed it could be shown by the vendor that there was a separate oral agreement constituting a condition precedent to the attaching of any obligation under the document. But such a separate oral agreement could be proved only by the vendor or his representative-in-interest."
In another case, decided by the Patna High Court, Jagdeep Sahay v. Sonu Lal, 52 Ind Cas 363 : (AIR 1919 Pat 469), it was decided that :
"...in a sale of immovable property, title to the property passes to the purchaser on the execution of the deed of sale, unless there is a contract between the parties that title to the property will not pass to the purchaser until the full consideration has been paid; but such a contract must be alleged and proved by the party setting it up."
The learned Single Judge has referred to Basalingava v. Chinnava, AIR 1932 Bom 247, which contains the following observations :
"There is a distinction between a sale where the consideration is intended to be paid and a not paid, Page 39 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT and where the consideration is not intended by both parties to be paid at all. In the former case the title would pass to the purchaser and in the latter case though the vendor was tricked into going through the form of execution and registration of the document, the sale deed would be void as a colourable transaction."
This case was referred to in Chandrashankar v. Abhla Mathur, AIR 1952 Bom 56. After quoting the above observations from Basalingaya's case, AIR 1932 Bom 247, their Lordships examined the facts of that case to see whether the intention of the parties was that title in the property should be passed on the execution of the conveyance without the consideration being fully paid. It was actually found that the recital about the payment of Rs. 699/- as consideration for the sale was false. Still, it was held that as the intention of the parties was to transfer title, the non-payment of the consideration made no difference and the sale-deed operated from the date of its execution.
9. On a review of the decisions above, we are of the opinion that it is the intention of the parties which has to be looked into to decide whether the sale-deed operated as a transfer of interest from the vendor to the vendee on the date of its execution. If this was the intention, then it does not matter whether the whole of the consideration or part of it remained unpaid. Further, where a registered deed of sale purporting to operate as a conveyance on the face of it exists, the burden of proving that it was not so intended is on the party who asserts this fact."
Page 40 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT37. In the case of Official Receiver of Salem v. Chinna Goundan, reported in AIR 1957 (Madras) 630, a learned Single Judge of the Madras High Court had observed as under :
"...Many a sale deed is executed with a recital that a consideration is received that day; but when the vendor denies it, he is allowed to show that the consideration has not been received as recited, and to recover the consideration. But the mere fact that there is a recital that the consideration had been received, while as a matter of fact, it has not been received, is not enough to show that no consideration was intended to pass and that the document was a bogus one executed gratuitously.
Often, in courts, sale-deeds are filed where the consideration is recited as received, whereas it is not received as a matter of fact. That is why there is also a lien in favour of the vendor for the unpaid consideration. Specific evidence of a convincing nature must be adduced to show that a sale deed reciting the payment of consideration was really executed for no consideration, and that no consideration was intended to be paid.
No doubt, a piece of evidence tending to show that, will be the recital of the receipt of the consideration when no consideration has, as a matter of fact, been paid as recited. But such a recital will not be conclusive. A court has to go into the whole evidence and come to its own conclusion. The learned District Judge went into the whole matter and held that though the consideration of Rs. 200, recited in the Page 41 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT assignment deed, had not been paid, the assignment itself was really intended to be executed for a consideration of Rs. 200 and was not intended to be executed gratuitously."
38. In the case of Bhartu v. Nawal @ Chhote, reported in AIR 2012 (Allahabad) 91, a learned Single Judge of the Allahabad High Court had observed as under :
"As far as second question of law regarding payment of sale consideration is considered both the courts below have given very cogent reasons for holding that no sale consideration was paid by the defendant to the plaintiff. In the sale deed the sale consideration of Rs.5,000/- was shown to have been paid earlier in advance in the village. In order to prove the payment of sale consideration defendant examined one Mukandi Lal as D.W.2 who stated that plaintiff had borrowed a sum of Rs.5,000/- from him and this amount was paid to him by the plaintiff. Defendant stated that after taking the amount of Rs.5,000/- from him the plaintiff had repaid the loan of Mukandi Lal."
"Sale is defined under Section 54 of the Transfer of Property Act as follows:-
"Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Accordingly, mere non-payment of sale consideration does not vitiate the sale provided that it is promised to be paid. However, if in the sale deed the consideration is said to have already been paid but this assertion is found to be Page 42 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT incorrect then the transaction does not amount to sale in the eye of law as per the definition of the sale."
39. Section 54 of the Transfer of Property Act, 1882, defines the term 'sale' as, "'Sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised". The mere fact that a sale-deed recites the payment of consideration which is not true cannot render the document invalid. To support a sale, it is not necessary that the whole of the price should be paid. The price may be paid or promised wholly or in part. If, according to the tenor of the document, the consideration was not actually paid but the document shows that there was an intention to pay, then in that case the document is not rendered invalid on account of the non-payment of the consideration. If, on the other hand, the intention was not to pay any consideration, then the document is of no effect. There is a distinction between a sale where the consideration is intended to be paid and is not paid, and where the consideration is not intended by both the parties to be paid at all. In the former case, the title passes to the purchaser, and in the latter case, though the vendor is tricked into going through the form of execution and registration of the document, the sale deed is void as a colourable transaction. To support a sale, it is not necessary that the whole of the price should be paid. The price may be paid or promised wholly or in part. If the vendor has executed the sale-deed with the intention of transferring the property in question but the consideration has not actually passed to him within his knowledge but he still had the intention of transferring the property in question; in such a case, the provisions of Section 55 of the Transfer of Property Act, 1882, Page 43 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019 C/FA/479/2019 CAV JUDGMENT will be applicable where the unpaid amount shall remain a charge on the property. But, the title of the property will be transferred to the vendee.
40. In our opinion, the impugned order is not sustainable in law. The court below has failed to apply the correct principles of law so far as Order 7, Rule 11 of the CPC is concerned.
41. In the result, this Appeal succeeds and is hereby allowed. The impugned judgment and decree passed by the court below is hereby quashed and set-aside. The Special Civil Suit No.98 of 2015 is restored to the court of the 3 rd Additional Senior Civil Judge, Bharuch, to be proceeded further in accordance with law.
42. Decree shall be drawn accordingly.
(J. B. PARDIWALA, J.) (A. C. RAO, J.) /MOINUDDIN Page 44 of 44 Downloaded on : Sun Oct 20 01:34:19 IST 2019