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Gobardhan Vs. Raghubir Singh - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1930All101
AppellantGobardhan
RespondentRaghubir Singh
Excerpt:
- - 559, and in the view we take of the questions urged before us, this appeal must fail and is dismissed with costs. apart from authority, the provisions of sections 17(1)(b) and 17(2)(v), clearly cover the question before us. act, clearly lays down that a contract for the sale of immovable property is a contract which does not of itself create any interest in or charge on such property. but even if it is not distinguishable, it cannot be regarded as good law now......representative. it has been found by the lower appellate court that raghubir relinquished his right of repurchase under the agreement dated 11th july 1917 by a document executed by him on 3rd february 1920 which was not registered. the lower appellate court had also found that this deed was for consideration and that the relinquishment is valid except for want of registration, which in its view was compulsory. subsequently, on 15th january 1924, raghubir sold two-thirds of his rights under the agreement of 11th july 1917 to badri and baldeo plaintiffs 1 and 2. the present suit was brought by badri, baldeo and raghubir, claiming possession of the property in suit treating the transaction evidenced by the deeds of 10th july 1917 and 11th july 1917 as one of mortgage, and in the.....
Judgment:

1. Second appeals 1684 of 1926 and 559 of 1927 arise out of the same suit brought by Badri Singh, Baldeo Singh and Raghubir Singh for redemption, on foot of two documents, one dated 10th July 1917 and the other dated 11th July 1917, alleged to evidence a transaction of mortgage, and in the alternative for possession of the property in suit on foot of the second of the two documents treating it as an agreement to reconvey the property. The facts in detail are these: Gayadin was originally the owner of the property in dispute. By the earlier deed above mentioned he purported to sell the property for Rs. 1400 to Gobardhan appellant before this Court. By the second of those deeds Gobardhan, the vendee, agreed to reconvey the property sold to him by the first deed, on receipt of Rs. 1,400 to Gayadin or his male lineal descendants at any time they or any of them desired to repurchase, Gayadin died, and Raghubir, plaintiff 3, is his son and legal representative. It has been found by the lower appellate Court that Raghubir relinquished his right of repurchase under the agreement dated 11th July 1917 by a document executed by him on 3rd February 1920 which was not registered. The lower appellate Court had also found that this deed was for consideration and that the relinquishment is valid except for want of registration, which in its view was compulsory. Subsequently, on 15th January 1924, Raghubir sold two-thirds of his rights under the agreement of 11th July 1917 to Badri and Baldeo plaintiffs 1 and 2. The present suit was brought by Badri, Baldeo and Raghubir, claiming possession of the property in suit treating the transaction evidenced by the deeds of 10th July 1917 and 11th July 1917 as one of mortgage, and in the alternative, as already stated, on the basis of the agreement dated 11th July 1917, giving them the rights to repurchase the property.

2. The Court of first instance at first dismissed the suit, holding that the transaction did not amount to a mortgage, and that the plaintiff had not claimed any relief explicitly on foot of the agreement dated 11th July 1917. On appeal the lower appellate Court allowed amendment of the plaint so as to contain the alternative relief of possession on foot of the agreement dated 11th July 1917. The lower appellate Court remanded the suit to the Court of first instance for a finding on the question whether the plaintiffs were entitled to succeed on the basis of the agreement dated 11th July 1917, assuming the transaction of 10th July 1917, taken with the agreement was not one of mortgage. The Court of first instance held that plaintiffs 1 and 2 acquired no interest under the deed dated 15th January 1924, because Raghubir had no assignable interest. His right, whatever it was, created by the agreement of 11th July 1917 was in personam. On receipt of the finding of the first Court the lower appellate Court dismissed the suit of plaintiffs 1 and 2 but decreed possession on payment of Rs. 1,400 to Raghubir. As regards the deed of relinquishment dated 3rd February 1920, which was set up as a bar against any possible claim by Raghubir, who, according to the defendant, had relinquished all rights by that document, it was held that in the absence of registration it was not admissible in evidence. In that view Raghubir's right to repurchase was left unaffected. The defendant has filed appeal No. 1684 of 1926, impugning the decree of the lower appellate Court in so far as it is in favour of Raghubir. Second appeal No. 559 of 1927 has been preferred by Badri and Baldeo in so far as they have not been held to be entitled to any relief, the transfer by Reghubir in their favour being held ineffective.

3. The learned advocate for the appellant in appeal No. 559 of 1927 has contended that the sale deed of 10th July 1917 and the agreement of 11th July 1917 should be read together and considered to evidence a transaction amounting to a mortgage. The lower appellate Court has held that the requisite conditions to make the transaction a mortgage are wanting. We think that the view of the lower appellate Court is correct. Unless the property in dispute can be considered to be no more than a security and the money advanced as a loan, the transaction cannot be characterized as a mortgage. The first deed conveys in explicit terms all right, title and interest of the vendor without any reservation of any kind. The second document merely gives a right of repurchase to specified individuals, namely the vendor and his lineal male descendants. It is not a right which can run with the land, nor is it a right which can enure for the benefit of the legal representatives of the vendor. It is no more than a privilege. There is no subsisting right to a debt recognized by these documents. The property affected by them can in no sense be considered to be mere security. Under these circumstances we think that the finding of the lower appellate Court that the two documents relate to two different transactions, the first evidencing a transaction of sale and the second evidencing an agreement by the vendee to resell the property under given conditions is correct.

4. In view of what we have held in respect of the nature of the transaction it must be conceded that Raghubir did not possess what would be called equity of redemption in case the transaction were one of mortgage. As already stated, he had a personal right to repurchase which could not be alienated to others, at any rate any one who is not a male descendant of the original vendor. It is not suggested that Badri and Baldeo are the male descendants of the vendor.

5. It is next contended that under Section 23(b), Specific Relief Act, Badri and Baldeo are entitled to enforce the agreement, which their assignor Raghubir could have enforced. This argument begs the whole question, which is whether they are legal representatives of Raghubir at all. If the latter had only a personal interest, which he could not assign, Badri and Baldeo can in no sense be regarded as his representatives so as to be entitled., to obtain specifie performance under Section 23(b), Specific Belief Act. This argument must therefore be rejected. No other argument was addressed to us in support of second appeal No. 559, and in the view we take of the questions urged before us, this appeal must fail and is dismissed with costs.

6. Appeal No. 1684 of 1926 must, in our opinion, succeed. We are unable to agree with the view taken by the lower appellate Court as regards the necessity of registration of the deed of relinquishment dated 3rd February 1920. It is true it purports to extinguish the right of Raghubir to repurchase the property in dispute. Qua registration it stands on the same footing as a document which creates the right to repurchase. If an agreement to reconvey the property, which creates the right is not compulsorily registrable, it should follow that an agreement to extinguish the same right cannot require registration. We have referred to the close analogy existing between the two agreements, because the case law bearing on the question referred to by the lower appellate Court and relied on before us relates to agreements to reconvey the property. Apart from authority, the provisions of Sections 17(1)(b) and 17(2)(v), clearly cover the question before us. While under the former a non-testamentary instrument which purports or operates to create. Declare assign, limit or extinguish any right, title or interests...of the value of Rs. 100 and upwards to or in immovable property requires registration, under the latter any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of Rs. 100 and upwards to or in immovable property but merely creating a right to obtain another document which will, when executed, create declare, assign, limit or extinguish any such right, title and interest is not compulsorily registrable. The test, therefore, is whether the document in question itself creates any right in immovable property, or merely creates a right to obtain another document, which when executed, will create or extinguish a right in immovable property,

7. We have no doubt that the right extinguished by the agreement dated 3rd February 1920, is a right to obtain another document, which when executed, will confer a right in immovable property. The right disposed of or dealt with by the agreement itself does not attach to any immovable property. It is, as we have already stated, the identical right created by the agreement dated 11th July 1917. The same right is created by one and extinguished by the other. Neither in one case nor in the other the right is a right to or in immovable property. Section 54, T.P. Act, clearly lays down that a contract for the sale of immovable property is a contract which does not of itself create any interest in or charge on such property. Whatever doubt might have previously existed on the effect of this provision, Act 2 of 1927 has made it clear that such document was never meant to be one requiring registration. The learned advocate for the plaintiff-respondent has referred to another part of Section 54, T.P. Act, in support of the contention that a right of repurchase is intangible property, and therefore, any document putting an end to such a right is compulsorily registrable under section. We are not prepared to give effect to this argument holding, as we do, that the right to repurchase, which has been extinguished by the agreement of 3rd February 1920 is a purely personal right. It cannot be regarded as intangible property of the character contemplated by Section 54, T.P. Act.

8. The lower appellate Court has referred to the case of Suraj Pershad v. Phul Singh [1906] A.W.N. 180, as an authority for the proposition that an agreement to reconvey property is compulsorily registrable. It is possible to distinguish that case from the one before us; but even if it is not distinguishable, it cannot be regarded as good law now. It proceeds on the assumption that the right to repurchase property in future is a right to or in immovable property. We have already discussed this aspect of the question and shown that this view cannot be accepted. The parties to the suit out of which the appeal before the learned single Judge who decided that case arose were not the parties to the agreement but their representatives-in-interest, and if the agreement in question in that case were regarded as conferring merely a personal right, the suit was liable to dismissal on that ground. The party relying on the agreement had, therefore, to accept the position that the agreement contained a covenant running with the land. On this hypothesis registration becomes compulsory. The judgment is a very brief one and the various questions which require consideration are not adverted to.

9. Bala Khandapa v. Sadashiv Hari A.I.R. 1921 Bom. 442, is another case relied on by the lower appellate Court. It was held that the deed of sale and the agreement together evidence the transaction of a mortgage and could not be construed separately as evidencing two transactions. On that supposition the agreement was an integral part of the document creating a mortgage and, therefore, compulsorily registrable.

10. In a later case Mir Gazi v. Miya Ali [1914] 38 Bom. 703, it was held that an agreement to reconvey property sold by a contemporaneous deed does not require registration. In Sangawa v. Huchangowda A.I.R. 1924 Bom. 174, the same view was taken. Lastly, in Harikisandas Bhagwandas v. Bai Dhanu : AIR1926Bom497 , which is a ruling of Full Bench of the Bombay High Court, a distinction has been drawn between a case in which the agreement and the sale-deed constitute a mortgage and a case in which it is to be regarded as a sale with an agreement to resell. In the former registration of the agreement is compulsory, evidently because it evidences the transaction of the mortgage. In the latter case the agreement relating to a purely personal right does not require registration.

11. The view which has been repeatedly taken by the Bombay High Court and which we are inclined to take is based on the provisions of Section 17, Registration Act already referred to.

12. In view of the conclusions arrived at by us on the question of registration, we hold that the agreement of 3rd February 1920, is admissible in evidence, though unregistered. It is not impugned on any other ground. The right of Raghubir to repurchase the property in dispute was expressly abandoned and he had no right left which could be transferred, assuming he had a transferable right, by the latter deed of 15th January 1924 in favour of Badri and Baldeo, plaintiffs 1 and 2. This being so, Raghubir lost his right to repurchase when he executed the agreement dated 3rd February 1920; and he cannot now claim to exercise that right.

13. In view of the conclusions arrived at by us, this appeal is allowed. The plaintiffs suit is dismissed with costs in all the Courts.


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