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Bansal Buildcon (P.) Ltd. Vs. Satya NaraIn Gupta and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Judge
Reported in2006(4)AWC3829
AppellantBansal Buildcon (P.) Ltd.
RespondentSatya NaraIn Gupta and anr.
DispositionPetition dismissed
Cases ReferredBrij Mohan and Ors. v. Sugra Begum and Ors.
Excerpt:
.....of the aforesaid provisions of the registration act as well as the transfer of property act, the suit for specific performance of contract may not be maintainable, but those provisions may not affect the grant of the decree by the court in respect of the alternative relief sought by the plaintiff. therefore, if the trial court has postponed the aforesaid consideration of the maintainability of the suit raised from the side of the applicant-defendant to a subsequent stage, the order cannot be said to be illegal amounting to failure of exercise of jurisdiction. therefore, to say that the implication of the aforesaid amended provisions of registration act as well as the transfer of property act are not there in the present case, would be wholly fallacious. 18. however, looking into the..........of a reversion or other intangible thing, can be made only by a registered instrument.contract of sale--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. such contract can be made only by a registered instrument.6. section 3 of the transfer of property act defines:'instrument' as a non-testamentary instrument and 'registered' means registered in any part of the territories to which this act extends under the law for the time being in force regulating the registration of documents.the registration act, 1908 relates to the registration of the documents. section 17 of the act provides, that certain documents are required to.....
Judgment:

Umeshwar Pandey, J.

1. This revision challenges the order of the court below dated 17.12.2005, rejecting the applicant's prayer for dismissing the suit under Order VII, Rule 11, C.P.C.

2. The applicant-revisionist prayed for dismissing the suit and rejecting the plaint under Order VII, Rule 11, C.P.C. on the ground that the suit being one for decree of specific performance of contract of sale based on an unregistered agreement, was not maintainable and the plaint be rejected without further lingering the proceedings of the suit.

3. This petition was resisted by the other side and the court below after hearing the parties found that as the suit was at its final stage and the- parties have entered into evidence, this matter may be taken up at the stage of final disposal itself and should be decided alongwith entire issues involved in the suit. Accordingly, the prayer was refused.

4. The learned senior advocate Sri Ravi Kant appearing for the revisionist as assisted by Sri J. Nagar has tried to emphasise that an order under Order VII, Rule 11, C.P.C. for dismissal of the suit can be passed by the Court at the very initial stage of the suit or at any subsequent stage when the Court finds that the suit is palpably not maintainable in the face of the statutory bar. It has been emphasized by Sri Ravi Kant that since the plaintiff/opposite-party seeks to enforce a written contract of sale which is unregistered and proposes to obtain a decree in respect thereto, it is not possible in view of the amended provisions of Registration Act, 1908, as well as the Transfer of Property Act, 1882. A written contract of sale which is unregistered is not to be read in evidence and as such is Inadmissible. Thus, it could not be enforced through a decree of a court. My attention has been drawn to the U.P. Civil Laws (Reforms and Amendment) Act, 1976, as incorporating amendments in Registration Act, 1908, as well as the Transfer of Property Act, 1882, besides several other enactments. The relevant provisions of the aforesaid two Acts which have been amended are Sections 4 and 54 of the Transfer of Property Act and Sections 17 and 49 of the Registration Act as applicable to the State of U.P.

5. Section 54 of the Transfer of Property Act, as applicable to the State of U.P., w.e.f. 1.1.1977, reads as under:

Section 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 immovable property or in the case of a reversion or other intangible thing, can be made only by a registered Instrument.

Contract of Sale--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. Such contract can be made only by a registered instrument.

6. Section 3 of the Transfer of Property Act defines:

'Instrument' as a non-testamentary instrument and 'registered' means registered in any part of the territories to which this Act extends under the law for the time being in force regulating the registration of documents.

The Registration Act, 1908 relates to the registration of the documents. Section 17 of the Act provides, that certain documents are required to be compulsorily registered and, other documents are exempted from being registered.

7. Section 17(1)(b) of the Registration Act, as applicable to the State of U.P., reads as under:

Section 17(1)--The following documents shall be registered....

(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or Interest, whether vested or contingent to in immovable property.

8. Section 17(2)(v) of the Act reads as under:

Section 17(2).--Nothing in Clauses (b) and (c) of Sub-section (1) applies to:

(v) any document other than contract for sale not itself creating, declaring, assigning, limiting or extinguishing any right, title or Interest 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 or interest; or

9. The words 'other than contract for sale' occurring in Section 17(2)(v) of the Registration Act has been inserted by U. P. Act No. 57 of 1976, w.e.f. 1.1.1977.

Section 4 of the Transfer of Property Act reads as under:

Section 4, Enactments relating to contracts to be taken as part of Contract Act. The chapters and sections of this Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872 (IX of 1872).

(And Section 54, Paragraphs 2 and 3, 59, 107 and 123 shall be read as supplemental to the Indian Registration Act, 1908 (XVI of 1908).

10. Thus, from a combined reading of Sections 4 and 54 of the Transfer of Property Act and, Section 17 of the Registration Act, as applicable to the State of U.P., and, as amended by U.P. Act No. 57 of 1976, it is clear that every contract of sale of an immovable property shall be made only by a registered instrument. Even though, a contract for sale of immovable property does not by itself create any interest in or charge on such property and only creates a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest, nonetheless, the said document or contract for sale of an immovable property is required to be registered in the State of U.P. w.e.f. 1.1.1977.

Thus, the effect of the aforesaid amendments, is, that every document or a contract for sale in respect of an immovable property in U.P. made on or after 1.1.1977 is required to be registered.

11. The next question which arises for consideration is whether a document for sale of an immovable property which is not registered, could still be enforced in a suit for specific performance.

12. Section 49 of the Registration Act as it existed prior to the U.P. Amendment Act No. 57 of 1976, read as under:

49. Effect of non-registration of documents required to be registered.--No document required by Section 17 or by any provision of the Transfer of Property Act, 1882, to be registered shall:

(a) affect any immovable property comprised therein, or

(b) confer any power to adopt, or

(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:

Provided that an unregistered document affecting immovable property and required by this Act, or the Transfer of Property Act, 1882. to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877. or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument.

With effect from 1.1.1977, Section 49 of the Registration Act as applicable to the State of U.P., was amended as under:

49. Effect of non-registration of documents required to be registered.--No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882), or of any other law for the time being in force to be registered shall:

(a) affect any immovable property comprised therein, or

(b) confer any power or create any right or relationship, or

(c) be received as evidence of any transaction affecting such property or conferring such power or creating such right or relationship unless it has been registered:

Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), of a contract for the purposes of Section 53A of the Transfer of Property Act, 1882 (4 of 1882), or as evidence of any collateral transaction not required to be effected by registered instrument.

13. By the Amendment Act 57 of 1976, as applicable in the State of U.P. in Clause (b) of Section 49, the words 'confer any power to adopt or' has been substituted with the words 'confer any power or create any right or relationship, or' and in the proviso, the words 'as evidence of contract in a suit for specific performance under Chapter II of the Specific Relief Act 1877, or' has been omitted.

14. The result of this amendment is that, prior to 1.1.1977. an unregistered document affecting Immovable property could be enforced in a suit for specific performance of a contract, but after the amendment of Section 49 of the Registration Act, w.e.f. 1.1.1977, an unregistered document could not be enforced in a suit for specific performance of a contract.

15. The aforesaid amended provisions of the two Acts as applicable to the State of U.P. make it evident that a written agreement of sale if sought to be enforced through a decree of specific performance, it has to be necessarily registered and otherwise it could not be enforced. The learned Counsel in this context has cited the case law of Vithalbhat (P.) Ltd. v. Union Bank of India : AIR2005SC1891 and on its strength it has been tried to emphasize that since the suit itself is not maintainable, the Court could not postpone the adjudication on the point whether the suit has to be dismissed and plaint is to be rejected under Order VII, Rule 11, C.P.C. The court below, while passing the impugned order, has observed that the whole matter involving such adjudication may be looked into at the final stage when the parties have already entered into evidence in support of their respective claims made in the suit. It has also been observed by the court below that an alternative relief too has been sought and it is for the refund of the money which is claimed to have been paid by the plaintiff to the defendant and, therefore, the plaint itself could not be rejected. I fully agree with such observations of the court below that even in view of the aforesaid provisions of the Registration Act as well as the Transfer of Property Act, the suit for specific performance of contract may not be maintainable, but those provisions may not affect the grant of the decree by the Court in respect of the alternative relief sought by the plaintiff. Otherwise also in paragraph 18 of the aforesaid judgment of Vtthalbhai (P.) Ltd. (supra), the Apex Court has specifically observed as below:

In Samar Singh v. Kedar Nath this Court while dealing with an election petition has held that the power to summarily reject conferred by Order VII, Rule 11 of the Code of Civil Procedure can be exercised at the threshold of the proceedings and is also available, in the absence of any restriction statutorily placed, to be exercised at any stage of subsequent proceedings. However, the Court has also emphasized the need of raising a preliminary objection as to maintainability as early as possible though the power of the Court to consider the same at a subsequent stage is not taken away.

16. The specific finding of the Apex Court is that such preliminary objection as to the maintainability of the suit has to be decided as early as possible, but the power of the Court to consider the same at a subsequent stage is not taken away. Therefore, if the trial court has postponed the aforesaid consideration of the maintainability of the suit raised from the side of the applicant-defendant to a subsequent stage, the order cannot be said to be illegal amounting to failure of exercise of Jurisdiction. The suit as against the present applicant- defendant for recovery of the amount may not be found to be maintainable, but it may be maintainable in so far as it stands against the defendant to whom the plaintiff claims to have made the payment towards the execution of the agreement of sale.

17. The learned Counsel appearing for the opposite-party/plaintiff, while citing the case law of Brij Mohan and Ors. v. Sugra Begum and Ors. : [1990]3SCR413 , has tried to Impress upon the Court that there may be specific performance of even an oral agreement of sale and as such the suit cannot be said to be wholly not maintainable for non-registration of the agreement of sale. In the present case, the plaintiff/opposite party has not come with a case for such decree of specific performance based solely upon an oral agreement. On the contrary the plaintiff has come with specific case of written agreement of sale which is obvious from different paragraphs of the pleadings as it appears in Annexure-2 to the petition. Therefore, it is not a case based on pure oral agreement between the parties and a decree of specific performance of contract has been sought on the basis of written agreement executed between the parties from time to time on different dates. None of these agreements is a registered document. Therefore, to say that the implication of the aforesaid amended provisions of Registration Act as well as the Transfer of Property Act are not there in the present case, would be wholly fallacious. The aforesaid case law of Brij Mohan (supra), would not be at all applicable to this case.

18. However, looking into the facts and circumstances as discussed above, if the court below has postponed adjudication upon the objections raised by the defendant- revisionist on the point of maintainability of the suit, the order cannot be found to be one in which the Court has wrongly refused to exercise jurisdiction or failed to exercise jurisdiction vested in it.

19. The revision, thus, does not appear to have force and is hereby dismissed.

20. It is, however, observed that the trial court would take up the hearing of the suit expeditlously and decide it within a period of maximum three months from the date of a receipt of certified copy of this order from deciding the appeal are; proceedings either of the parties.,


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