G.K. Misra, J.
1. Plaintiff is the appellant. He sold the disputed land to the defendant on 14-8-1956 for Rs. 300/- by a registered sale deed Ex. A. On the very day, the defendant executed a unregistered agreement for sale (Ex. 1) stipulating to reconvey the same property to the plaintiff on receipt of Rs. 300/- within three years from that date. During the stipulated period, the plaintiff offered the money personally to the defendant and also remitted the money by money-order, but the defendant refused to accept the money. The suit is for specific performance of the agreement Ex. 1.
2. The defendant alleged that Ex. 1 was not genuine. His case is that at the time of the sale there was paddy crop on the suit land. As the crop had been grown by the plaintiff, there was an agreement that it would be divided half and half between them. By way of security the plaintiff procured a blank sheet of stamp paper containing defendant's signature. The defendant pleads that possibly the plaintiff had utilised that paper as the agreement (Ex. 1).
3. Both the Courts below concurrently rejected the defence version of story and held that Ex. 1 was genuine and duly executed by the defendant. They, however, dismissed the plaintiff's suit on the finding that Ex. I was compulsorily registrable and in the absence of registration, it cannot constitute the basis of the suit. The second appeal has been filed against the appellate decree dismissing the plaintiffs suit.
4. They only point for consideration is whether Ex. 1 is compulsorily registrable. Mr. Sovesh Chandra Roy contends that Ext. 1 is registrable under Section 17(1)(b). Registration Act which lays down;
'Other non-testamentary instruments which purports or operate 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 one hundred rupees and upwards, to or in immoveable property.' Mr. R. N. Mohanty, On the other hand contends that Section 17(2)(v) applies. It lays down:
'Sub-section (2) Nothing in Clauses (b) and (c) of Sub-section (i) applies to:
X X X XX (v) any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immoveable property, bat merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest.'
The Explanation to Section 17, Sub-section (2) says:
'A document purporting or operating to effect a contract for the sale of immoveable property shall not be deemed to require or ever to have required registration by reason only of the fact that such document contains a recital of the payment of any earnest money or of the whole or any part of the purchase money.' This Explanation was introduced by Section 2 of Act 2 of 1927. The proviso under Section 49 of the Act makes the position further clear. It enacts:
'49. No document required by Section 17 or by any provision of the Transfer of Property Act, 1882, to be registered shall:
(a) affect any immoveable 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 immoveable 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.'
Thus the Explanation to Section 17(2) and the proviso to Section 49 make it absolutely clear that even an unregistered document affecting immoveable property required to be compulsorily registrable may be received as an evidence of a contract in a suit for specific performance. Clause (v) applies only to a document which does not itself create a right in immoveable property. It does not apply to a document which itself creates such right. Documents of the latter class must be registered if the right is of the value of one hundred rupees or upwards. Whether a document belongs to former class or latter class depends upon the intention of the parties as expressed in the instrument. If a document itself creates an interest in the immoveable property, the fact that it contemplates execution of another document will not exempt it from registration under this clause. The document itself need not contain a recital of the execution of another document.
5. Judged by the aforesaid test Ext. 1 itself does not create, declare, assign, limit or extinguish any right, title or interest in the disputed land.
Mr. Roy lays special emphasis on the condition incorporated in Ex. 1 to the effect that the defendant was prohibited during the contractual period of three years not to transfer the land to any other person. This clause does not limit or extinguish the right, title or interest of the defendant. Even without this clause, the defendant was precluded from transferring the land to any other person during the stipulated period of three years. If a third person would obtain a transfer of the land during this period, he cannot be protected if he is not a bona fide purchaser for value without notice. If the stranger purchaser would be a bona fide purchaser without notice, the deft, would have been liable to pay damages for breach of the contract. The existence of the aforesaid condition does not make any difference to the jural relationship created between the plaintiff and the defendant.
6. The learned lower appellate Court placed reliance on Gajanan Narayan v. Jivangiri Chamelgiri, AIR 1926 Bom 131 and Soshil Kumar v. Madan Gopal, AIR 1953 Punj 292 in support of his conclusion that Ex. 1 requires registration. AIR 1953 Punj 292 merely gives a statement of fact and does not discuss any law in support of its conclusion. With respect, I am unable to accept it as correct. There was difference of opinion between the two Division Benches in Vaman Trimbak Joshi v. Changi Damodar, AIR 1926 Bom 97 and AIR 1926 Bom 131. On account of this conflict of authority, the matter was referred to a Full Bench in Harkisandas Bhagwandas v. Bai Dhanu, AIR 1926 Bom 497 (FB). The majority of the learned Judges held on identical facts that an agreement of that nature did not require registration. Macleod, C. J. expressed himself thus:
'If two parties agree beforehand that one party shall sell immovable property to the other, and that the purchaser shall agree to re-sell the property at a price to be tendered by the vendor within a certain time, the latter agreement to be contained in a separate document, when the relative documents are executed, they evidence not one transaction but two transactions. The sale-deed passes the title absolutely to the purchaser, the agreement to re-sell in no way limits his right as owner. If he breaks the agreement and sells to a third party, he lays himself open to an action for damages while the right of the third party to retain the property will depend upon whether or not he had notice of the agreement. When the parties intend to create a mortgage the situation is different. The ostensible vendor does not lose all interest in the property, he retains for himself a transferable and heritable right, so that the sale deed and the agreement to reconvey do evidence a single and inseparable transaction.
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The intention of the parties must be proved by the Court according to the facts of each case, and, ordinarily speaking, I should say that when the agreement to sell is evidenced by a separate document that would be proof that, although the parties had come to a previous arrangement with regard to a particular course of conduct between themselves, there was an intention to give effect to that arrangement by entering into two transactions.'
But the other learned Judges constituting the majority did not agree with Macleod, C. J. The view of Shah, J., in the majority judgment, is thus expressed:
'The agreement to reconvey is not compulsorily registrable in view of the provisions of Section 17 Sub-section (2), Clause (v) because it merely creates a right to obtain another document which will, when executed, create an interest in immoveable property; but by itself it creates no right in the immoveable property nor does it limit any right created by the deed of sale. On principle, I am unable to see any distinction between the case of an agreement subsequently and separately executed apart 'from the sale, and the case of an agreement contemplated in the question referred to us where it forms part of the transaction of a bona fide sale between the parties. The intention of the parties in both cases is the same, viz., to separate an agreement, which by itself creates no interest in immoveable property from the sale. There is nothing in law to prevent parties from having separate documents as to terms simultaneously agreed upon, provided the terms really admit of being evidenced by different documents, which are permissible in law or rather which are not prohibited by law.
The real test in my opinion, is not whether the transaction is the same, but whether the intention of the parties in a given case is to create or limit the right in immoveable property worth Rs. 100 and over by an agreement not registered or to keep strictly within the limits contemplated by Clause (v) of Section 17, Sub-section (2). Where there is nothing in the terms of the agreement to show that by itself it creates or limits any right in Immoveable property, but merely gives a right to obtain another document and where the intention of the parties ex hypothesi, as contemplated by the question, is to treat the document as strictly limited by the terms, I do not see any reason why the exemption allowed under the said clause of the Section should not take effect with reference to it.'
The view of the majority, expressed by Shah, J., has my respectful concurrence. This view has been followed in Gobardhan v. Raghubir Singh, AIR 1930 All 101. It is regrettable that the attention of the Courts below was not drawn to this Full Bench decision. Kashinath Bhaskar v. Bhaskar Vishweshwar, AIR 1952 SC 153 and Ram Kumar Himatsingha v. Gajendra Chandra, AIR 1957 Assam 68, relied upon by Mr. Roy, are distinguishable. The former is a clear case of mortgage and the latter is one in which interest in immoveable property directly passed.
7. Reading Ex. I as a whole, it is merely an agreement by the vendee to reconvey the property to the vendor on payment of money by him within the stipulated period and the document comes within the purview of Section 17(2)(v) and is not compulsorily registrable. The plaintiff's suit for specific performance must accordingly be decreed.
8. In the result, the judgments of the Courts, below are set aside, the appeal is allowed and the plaintiff's suit is decreed with costs throughout.