1. This second appeal was heard by Sri Justice Seth. He has formulated two questions and referred them to a larger Bench, for opinion. These questions are:--
' (1) whether title to a property in case of auction sale by the Custodian passes on the date of the sale or on the date of deposit of the sale amount or on the date when the sale deed is executed in respect of such sale?
(2) Whether in case of auction sale by Custodian execution of sale deed is essential in law?'
2. It is not necessary to mention facts of the case, for we think that the questions referred to us are pure questions of law. Section 10(2)(o) of the Administration of Evacuee Property Act is the only material provision. It is necessary to interpret this provision for answering these questions.
3. Section 10(2)(o), in so far as it is material for our purpose, reads:--
'. . . . .the Custodian may, . . . transfer in any manner whatsoever any evacuee property, notwithstanding anything to the contrary contained in any law or agreement relating thereto: .....'
It appears to us that the second question stands first in order of priority. If our answer to this question is in the affirmative, the first question answers itself. If our answer to the second question is in the negative, then alone it will be necessary to find out whether title to the property auction-sold by the Custodian passes on the date of the auction or on the date on which the auction money is deposited. So, we shall take up the second question first.
4. Under Section 8 of the Administration of Evacuee Property Act the evacuee property vests in the Custodian. It has been held that notwithstanding this vesting the evacuee continues to be the owner of the property. When the Custodian sells the evacuee property under Section 10(2)(o), he sells it, in effect, for the evacuee in exercise of his statutory power. The property sold by him may in one case be worth less than Rs. 100/-and in another more than Rs. 100/-. To either sale, prima facie, the provisions of the Transfer of Property Act would apply. So the sale of a property worth less than Rs. 100/- may be made either by a registered instrument or orally by delivery of possession. Title to such property shall pass to the vendee on his taking possession. The sale of a property worth Rs. 100/- or more may be made only by a written and registered sale deed. Title to such property shall pass to the vendee only on the due execution and registration of a sale deed.
5. Counsel for the appellants has however strenuously argued that Section 10(2)(o) enables the Custodian to sell a property worth more than Rs. 100/-orally or in writing or by a written and registered sale deed. He has got discretion to adopt any of these courses. This is rather a startling argument and should not be readily accepted.
6. Counsel supports his argument by relying on the phrase 'in any manner whatsoever' in Section 10(2)(o). It is mentioned that it is this phrase that enables the Custodian to sell a property worth more than Rs. 100 either orally or in writing or by a written and registered sale deed in his discretion. This interpretation of the phrase is unacceptable to us. In our view, it permits the Custodian to adopt any of the known modes of transfer. He may sell, lease, mortgage or exchange an evacuee property. He may perhaps not gift an evacuee property.
7. Counsel for the appellants submits that if this was the legislative intention, the word 'transfer' alone was sufficient and the phrase will be a surplusage. The submission is attractive. But it is not correct. It appears to us that the phrase 'in any manner whatsoever' has been super-added to the word 'transfer' in order to put it beyond doubt that the Custodian could also sell an evacuee property. It is well known that often the Legislature adds words by way of abundant caution. It seems to us that section 10(2)(o) is an instance of such an abundant caution.
8. The interpretation suggested by counsel for the appellants overlooks the history of the Registration Acts since the 18th century in England. The registration of documents was gradually made compulsory for the avowed purpose of suppressing fraud on innocent subsequent transferees. It is difficult to conceive that the Legislature intended to take a retrogressive step through the vague phrase 'in any manner whatsoever' in Section 10(2)(o). If the Legislature had intended to do away with the necessity of a registered sale deed in case of an evacuee property worth more than Rs. 100/- we are sure that it would have expressed itself in very clear words. In M.K. Ranganathan v. Government of Madras : 2SCR374 , Sri Justice Bhagwati, while interpretation the amended Section 232(1) of the Indian Companies Act, said;--
'Whereas before the amendment the secured creditor stood outside the winding up and could, if the mortgage-deed so provided, realise his security without the intervention of the court by affecting a sale either by private treaty or by public auction, no such sale could be effected by him after the amendment and that was certainly a fundamental alteration in the law which could not be effected unless one found words used which pointed unmistakably to that conclusion or unless such intention was expressed with irresistible clearness .........such a great and sudden change of policy could not be attributed to the Legislature and it would be legitimate therefore, to adopt the narrower interpretation of those words of the amendment rather than an interpretation which would have the contrary effect.'
This observation was relied upon by one of us in Buddhan Singh v. Nabi Bux : AIR1962All43 . In that case it was held by majority that a trespasser in possession of a piece of land could not be said 'to hold the land.' It was then said by one of us;
'If consideration of a mere 'great and sudden change of policy' appeared to Bhagwathi, J. to be a proper reason for not giving the whole meaning to the general words of Section 232(1) of the Indian Companies Act, it would, I think, be far less proper for me to think that the word 'hold' is intentionally used in Section 9 by the Legislature for the purpose of acknowledging mere might as right .....'
9. It is relevant to notice that in a pari materia statute the Legislature has expressly dispensed with the necessity of a written and registered sale deed in respect of a property worth more than Rs. 100/-. Section 20(1) of the Displaced Persons (Compensation and Rehabilitation) Act, 1954, enables the Managing Officer to transfer a property out of compensation pool by sale of such property to a displaced person or to any other person whether the property is sold by public auction or otherwise. Sub-section (2) of Section 20 expressly provides that every Managing Officer selling any immovable property under Sub-section (1) shall be deemed to be a Revenue Officer within the meaning of Sub-section (4) of Section 89 of the Indian Registration Act, 1908. Rule 90(15) made under the said Act directs the Managing Officer to issue a sale certificate to the purchaser in the form specified in Appendix XXII on XXIII, as the case may be. A certified copy of the sale certificate shall be sent by him to the Registering Officer within the local limits of whose jurisdiction the whole or any part of the property to which the certificate relates is situate. It was quite easy for the Legislature to adopt this very device in relation to the sales made by the Custodian. But the legislature did not do so.
10. The analogy of the Receiver under the Provincial Insolvency Act is also instructive. Just as the property of an evacuee vests in the Custodian, so the property of a person against whom an order of adjudication is made under the Provincial Insolvency Act is vested in the Receiver. Both administer estates; the one of an evacuee, the other of an insolvent. Like the Custodian, the Receiver is also empowered to sell the property vested in him. But it has been held that the sale by him of a property worth more than Rs. 100/- should be evidenced by a written and registered sale deed. (Kamsala Narasappa v. Husain Sab : AIR1935Mad55 ). We see no reason why a sale by the Custodian should be treated differently.
11. Counsel for the appellants has entirely banked on the phrase 'in any manner whatsoever' in Section 10(2)(o) in support of his argument that the Custodian may orally sell the property worth more than Rs. 100/-. But, as already shown, we are not prepared to go that far and leave the door wide open for perpetration of fraud on innocent subsequent transferees. We think that the phrase empowers a Custodian to transfer in any one of the well-known modes an evacuee property. In other words, it empowers him to sell, lease, mortgage or exchange an evacuee property.
12. So we answer the second question in the affirmative.
13. In view of our affirmative answer to the second question it will necessarily follow that title to a property sold by public auction by the Custodian does not pass to the auction purchaser on the date of the auction sale nor on the date of the deposit of the auction money by him. It passes only when the Custodian executes a registered sale deed in favour of the auction purchaser where the property is worth Rs. 100/- or more. In case of a property worth less than Rs. 100/-the title to the property sold by public auction by the Custodian shall pass neither on the date of the auction sale nor on the date of the deposit of the auction money but on the date on which the Custodian executes a registered sale deed or delivers possession over the property to the auction purchaser.
14. The case shall now go back to the learned single Judge for deciding the appeal on merits.