Punjab-Haryana High Court
Rukna vs Wali Mohd. on 3 November, 1999
Author: M.L. Singhal
Bench: M.L. Singhal
JUDGMENT M.L. Singhal, J.
1. Wali Mohmad instituted suit for possession through specific performance of the agreement to sell dated 24.5.1989 against Rukna son of Nikka respecting land measuring 3 bighas situated in the area of Village Azimabad Tehsil Malerkotla on payment of Rs. 38,000/- minus Rs. 35000/- paid/as earnest money or on payment of whatever amount is adjudged by the Court payable to Rukna, in the alternative, for the recovery of Rs. 38000/- as damages i.e. Rs. 35000/- as earnest money plus Rs. 3000/- as damages and also for permanent injunction restraining him from interfering with his possession or alienating the land in any manner whatever to any one else, It was alleged in the plaint that on 24.5.1989, Rukna son of Nikka defendant executed an agreement to sell land measuring 3 bighas to him for a sum of Rs. 38000/-. Out of sum of Rs. 38000/-, Rs. 35000/- was paid to him as earnest money. It was sfipulated in the agreement that defendant shall execute sale deed in favour of the plaintiff or in whose favourthe plaintiff wanted him to execute sale deed, till 25.5.1992. Defendant put him in possession of the land at the spot. It was stipulated in the agreement that in case defendant defaulted and failed to execute sale deed as per stipulations, the plaintiff could compel him to execute sale deed through the process of the Court. Plaintiff had always been ready and willing to pay the remaining sum of Rs. 3000/- to the defendant and obtain from him the sale deed but the defendant defaulted. A week prior to 25.5.1992, the plaintiff tendered to the defendant a sum of Rs. 30007- and told him that he was ready to go ahead and obtain sale deed but to no effect. On 5.5.1992, the plaintiff served registered AD notice to the defendant calling upon him to execute saje deed as stipulated and also that he was ready and willing to pay him the remaining sum of Rs. 3000/- and spend the stamp and registration charges and to obtain sale deed from him. Defendant gave reply to that notice on 20.5.1992 denying without any basis his liability to perform his part of contract. On 25.5.1992, he reached the office of Sub Registrar with the amount of Rs. 3000/- as also the amount required for stamp and registration charges. He waited for the defendant till 5 p.m. but he did not turn up. Thereupon, he got his affidavit attested from Shri Sehwaj Khan, Advocate (Oath Commissioner) on stamp paper which was indicative of his readiness and willingness to perform his part of agreement and the absence of readiness and willingness to perform his part of the agreement by the defendant.
2. Defendant contested the suit of the plaintiff urging that he never executed any agreement to sell dated 24.5.1989 in favour of the plaintiff It was denied that he received any sum of Rs. 35000/- as earnest money.
Agreement set up was false and forged. In fact land measuring 6 bighas 5 biswas belonging to him was under mortgage with the plaintiff in the sum of Rs. 16000/-. On 24.5.1989, defendant came to the Tehsil premises alongwith the plaintiff so that he could repay him the mortgage debt. He repaid him Rs. 16000/- as mortgage debt in the presence of Gurdev Singh; son of Bachan Singh. At the same time, he repaid Rs. 14500/- to that Gurdev Singh also on account of some writing. Plaintiff took advantage of his simplicity and illiteracy and fabricated the so called agreement to sell.
3. On these pleadings of the parties, the following issues were framed by the learned trial Court :-
1. Whether the defendant executed agreement to sell dated 24.5.89 as alleged ? OPP
2. Whether the defendant received Rs. 35000/- as earnest money from the plaintiff at the time of execution of agreement to sell ? OPP
3. Whether the plaintiff was always ready and willing to perform his part of the contract ? OPP
4. Whether the agreement to sell dated 24.5.89 is forged and fictitious document ? OPD
5. Whether the plaintiff is entitled for the specific performance of the contract or in the alternative, is entitled to receive Rs. 38000/- from the defendant, as claimed by him ? OPP
6. Relief.
4. Subordinate Judge 1st Class, Malerkotla decreed the plaintiff's suit for possession through specific performance on payment of Rs. 38000/- minus Rs. 35000/- paid as earnest money and also for permanent injunction restraining the defendant from alienating land in suit in any manner whatsoever to any body else, in view of his findings, that defendant had agreed to sell land measuring 3 bighas with the plaintiff vide agreement to sell dated 24.5.S9 for a sum of Rs. 38000/- out of which amount he had received Rs. 35000/- as earnest money and further the defendant had undertaken to execute sale deed in favour of the plaintiff on or before 25.5.1992 on receiving sum of Rs. 3000/-. It was further found that plaintiff was ready and willing to pay the remaining sum of Rs. 3000/- and obtain sale deed from him and it was the defendant who defaulted and prevaricated in executing sale deed in his favour on receipt of Rs. 3000/- and, thus, complying with the agreement. It was found that plaintiff was present all along in the office of Sub-Registrar on 25.5.1992 with a view to paying the remaining sum of Rs. 3000/- to ihe defendant and obtaining sale deed from him and it was the defendant who did not turn up with a view to perform him part of agreement. Agreement dated 24.5.89 was found to be genuine and not false, forged or fictitious as set up by the defendant.
5. Aggrieved from this judgment and decree dated 28.4.1995 passed by Subordinate Judge 1st Class, Malerkotla, defendant wen! in appeal. Appeal was dismissed by learned Additional District Judge, San-
grur vide order dated 6.4.98 thereby affirming the findings of the learned Subordinate Judge 1st Class, Malerkolia.
6. Aggrieved from this judgment and decree passed by learned Addl. Distt. Judge, Sangrur, defendant has come up in further appeal to this Court,
7. I have heard the learned counsel for the patties and have gone through me records.
8. It was submitted by the learned counsel for the appellant that agreement Ex.P.1 dated 24.5.1989 is a waste paper. It could not be enforced as it required registration. Without registration, it gave rise to no mutual rights and obligations between the parties. It was submitted that as per agreement Ex.P1 deal was struck at Rs. 38000/- out of which Rs. 35000/- was paid as earnest money. Possession was also transferred by the prospective vendor to the prospective vendee. It was submitted that nothing more remained to be done by the defendant so far as this agreement is concerned, when in pursuance of this agreement, possession had been delivered to the plaintiff by the defendant. Where under an agreement to sell possession is transferred from prospective vendor to prospective vendee, it is not a simple agreement to sell. It is an agreement requiring registration. Agreement requiring registration will not be receivable as evidence of any transaction. Agreement cannot form the basis of plaintiff's claim. It cannot be specifically enforced by the plaintiff through filing suit. In support of this submission, he drew my attention to Prug Narayan Mook Badhir Vidyalaya Sainiti v. Hukam Singh & Ors., 1997(1) CCC 458 (Allahabad), where it was held that "a contract of sale of immovable property, if it is required to be registered by law relating to registration, will not be enforceable if it is not registered. Law relating to registration of documents provided that a document which purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent of the value of Rs. 100 and upwards to or in immovable property shall have to be registered. Exception to it is that in case, the document does not itself operate tocre-ate any right, title or interest of a value of Rs. 100 or upwards to or in immovable property but only creates a right to obtain another document which when executed, will create, declare, assign, limit or extinguish any such right, litle or interest, then the document will not be required to be registered.
9. Law of registration does not require registration of an instrument relating to contract in respect of transfer of immovable property if by that agreement or contract.
(a) no interest, right or litle is created in favour of a person;
(b) the document in question does not limit or extinguish the right or title of the holder of that immovable property.
(c) the document does not declare or assign any right.
interest etc. in favour of any person;
(d) the immovable property in question is not valued at Rs. 100 or more.
10. It was submitted that through this agreement, interest, right or title was created and correspondingly right, interest or title was extinguished so far as the defendant was concerned and, therefore, the agreement required registration. Tn case document which is required to be registered is not registered, it is not admissible in evidence in proof of any transaction in respect of the property to which it relates and it will create no right in favour of the person holding such document so as to enable him to enforce it by taking recourse to suit. Agreement, which was said to be requiring registration -was indicating the following things :
(i) Sum of Rs. 20,000/- was paid by the other party to defendants as consideration;
(ii) Other party had been vested with the right to get a sale-deed executed for the transfer of the suit land from defendants on payment of Rs. 15000/-which remained unpaid;
(iii) The other party had been given right of possession over the land in suit and to raise constructions thereon of school building and hostel building and to use the land in other manner they so liked;
(iv) Extinction of the right of possession of the defendants over the land in suit except on the standing crops depending at the option of the other party for choosing the time to exercise their right of having the land.
11. Agreement did not leave any right in the land with respondents except for the following :
(i) In case, the other party does not decide to use the land in any manner they choose and the crop standing thereon is not destroyed then to collect it when it is ripe.
(ii) to receive a sum of Rs. 15,000/- more for executing the sale-deed so as to transfer absolute title and right in the land in suit in favour of the other party. In case, the other party does not want to purchase the land and fails to pay the remaining sum of Rs. 15,000/- which it agreed to pay and the agreement of sale is repudiated, then the right to claim back possession of the land in suit after their eviction." Agreement Ex.P1 did not require registration as it was merely an agreement to sell. Under this agreement to sell, a sum of Rs. 35000/- had been paid to the prospective vendee defendant as earnest money. 25.5.92 was stipulated as the date for the receipt of the remaining sale money by the defendant and the defendant was to execute the sale deed. Agreement to sell Ex.Pl was not sale as defined in Section 54 of the Transfer of Property Act. Section 54 of the Transfer of Property Act says that "sale" is a transfer of ownership in exchange fora price paid or promised or part paid and part-promised."
Section 54 defines contract of sale as follows :-
"A contract for the sale of immovable 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."
A contract for sale of immovable property creates an enforceable obligation and not any interest or charge on it. In Sunil-v. Kishan, AIR 1995 SC 1891, it was held that under a contract for sale, the vendor received consideration before executing a sale deed and put the purchaser in possession. The land in question was acquired under the Land Acquisition Act. It was held that the agreement for sale of land does not confer any title and the purchaser, under such a circumstance, is not entitled to compensation, even by operation of Section 53A of the Transfer of Property Act.
12. This also shows that agreement of sale does not confer any title. It merely gives the right to claim specific performance against the other party. Delivery of possession under such an agreement to sell does not make the agreement to sell any the belter. Vendee does not become owner of the property. He will become owner thereof only if there is transfer of property to him from the vendor. When a title to the goods passes under the contract, it is a sale. When a title does not pass, the contract is an agreement to sell. Reference may be made to State v. Cannon Dunkerley & Co., AIR 1958 SC 560.
13. In my opinion, it was merely an agreement to sell. No right, title or interest was created in the immovable property in favour of the plaintiff though there was delivery of possession to the vendee and the payment of part-consideration to the vendor by the vendee. There will be transfer of ownership only if the sale deed is executed and got registered under Section 17 of the Registration Act in pursuance of his agreement to sell.
14. Since the plaintiff had paid a sum of Rs. 35000/- as earnest money and only a sum of Rs. 3000/- remained to be paid to the defendant, it cannot be believed that the plaintiff defaulted and prevaricated. In fact the defendant defaulted and prevaricated or else he would have been before the Sub-Registrar on 25.5.92 when the plaintiff was all along there before the Sub-Registrar till 5 p.m. Plaintiff was ready and willing to pay the remaining sale money and obtain the sale deed from defendant and the default lay with the defendant.
15. In view of what has been said above, this appeal fails and is dismissed.
16. Appeal dismissed.