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Manicka Goundan Vs. Elumalai Goundan Minor by Guardian Ammakannu Ammal and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Reported in(1956)2MLJ536
AppellantManicka Goundan
RespondentElumalai Goundan Minor by Guardian Ammakannu Ammal and ors.
Cases ReferredSatyanarayana v. Chinna Venkata Rao
Excerpt:
.....failed to obtain compulsory registration. 19, clearly demonstrate the untenability of the first proposition. every vendor is bound to do all that is necessary to perfect the title of the purchaser, which includes the execution and registration of a proper conveyance. well established equitable considerations would justify a court refusing to grant the relief of specific performance. to take an obvious case, if the vendor duly executes a sale-deed and hands it over to the vendee and the vendee neglects to present it for registration within the time prescribed and, therefore loses his right to have it registered, a court may well say that the plaintiff has only to blame himself for not securing registration and therefore he would not be entitled to any relief because of his own..........the facts necessary for discussing this question are briefly these. defendants 2 and 3 executed a sale-deed (exhibit p-1) on 2nd august, 1942, conveying the suit properties to the first plaintiff. the second defendant by a sale-deed dated 1st july, 1942, purported to convey the same properties to the first defendant. it has now been found by the courts below that this sale-deed was ante-dated and that it was actually executed subsequent to the execution of the sale-deed in favour of the first plaintiff. after the execution of the sale-deed in favour of the first plaintiff, evidently in view of the sale deed executed by the second defendant, in favour of the first defendant, the third defendant added the following at the end of the sale deed:should any dispute arise in respect of this it.....
Judgment:

P.V. Rajamannar, C.J.

1. This appeal raises an interesting question of law on which there is no direct authority. The facts necessary for discussing this question are briefly these. Defendants 2 and 3 executed a sale-deed (Exhibit P-1) on 2nd August, 1942, conveying the suit properties to the first plaintiff. The second defendant by a sale-deed dated 1st July, 1942, purported to convey the same properties to the first defendant. It has now been found by the Courts below that this sale-deed was ante-dated and that it was actually executed subsequent to the execution of the sale-deed in favour of the first plaintiff. After the execution of the sale-deed in favour of the first plaintiff, evidently in view of the sale deed executed by the second defendant, in favour of the first defendant, the third defendant added the following at the end of the sale deed:

Should any dispute arise in respect of this it shall not concern us.

2. Though the plural is used, only the third defendant made this endorsement. When the document was presented for registration the third defendant accepted execution; but the second defendant refused to join in the registration on the ground that there had been a material alteration in the sale-deed, referring to the endorsement made by the third defendant above mentioned. An application was made to the District Registrar by the first plaintiff for compulsory registration. But the application was rejected. Thereupon he filed a suit in the Court of the District Munsif, Ami (O.S. No. 167 of 1943) for setting aside the order of the Registrar refusing registration. The suit was dismissed. An appeal filed against the decree in the suit was also dismissed. On 21st July, 1944, during the pendency of the appeal, the first plaintiff filed a suit for declaration of his title to the suit property and for an injunction and in the alternative, for possession of the entire property or for partition and possession of a half share. Subsequently, after certain proceedings which it is not necessary to mention, the plaint was amended and an alternative relief for specific performance was added and it was prayed that the second defendant may be directed to execute a fresh deed in respect of his half share. Meanwhile the first plaintiff died and plaintiffs 2 to 5 were brought on record as his legal representatives. The learned District Munsif held that because the plaintiffs had not performed their part of the contract and had not expressed their willingness and readiness to pay the share of the consideration to the second defendant, the plaintiffs were not entitled to obtain specific performance. He therefore granted a decree declaring the plaintiffs' right to a half share in the suit properties belonging to the third defendant and directed a partition. On appeal by the plaintiffs the learned District Judge held that the plaintiffs were entitled to specific performance in respect of the share of the second defendant and directed defendants 1 and 2 to execute a deed of conveyance in favour of the plaintiffs of the moiety in the suit properties which belonged to the second defendant and to put the plaintiffs in possession of the same. The first defendant filed a second appeal against the said decision of the District Judge (S.A. No. 271 of 1949) which was disposed of by Subba Rao, J. Two questions of law only were raised before the learned Judge, namely (1) that the suit for specific performance was not maintainable as a sale-deed had already been executed both by the second and third defendants and in view of Section 77 of the Indian Registration Act and (2) that specific performance could not be granted to the plaintiffs as they had not expressed their readiness and willingness to perform their part of the contract. The learned Judge decided both the questions against the first defendant and held that the suit for specific performance was maintainable as against the second defendant and dismissed the second appeal but granted leave to file ati appeal under the Letters Patent.

3. Mr. A Sundaram Ayyar, learned Counsel for the first defendant-appellant confined his arguments before us to the first question only. His contention in short was that once a sale-deed had been executed by the second and third defendants, a suit for specific performance was not maintainable. The only remedy which the first plaintiff had was that provided by the Registration Act. In support of his contention he relied on certain rulings of this Court. The first of them is the decision in Venkataswami v. Kristayya : (1893)3MLJ169 . In that case, in pursuance of an agreement between the plaintiff and the defendant for the transfer of a mortgage the defendant duly executed a deed but it was not registered. The plaintiff brought a suit praying for a decree directing execution and registration of a fresh deed to effectuate the original agreement. It was held by Muttusami Ayyar and Handley, JJ., that the suit was not maintainable. The learned Judges were of the opinion that independently of the provisions of Section 77 of the Registration Act no suit to compel registration of a document would lie. They found that the plaintiff who had possession of the document could have presented it for registration within the time allowed and if the defendant had appeared and admitted the execution, the document would have been registered but if he had appeared and denied execution and registration had been refused, the plaintiff would have been entitled to an enquiry before the Registrar under Sections 73 to 76. If the defendant did not appear, the plaintiff might have proved execution of the document, and on such proof would have been entitled to registration. If the registering officer refused to register the document, an appeal would have lain to the Registrar under Section 72, and if the decision of the Registrar was also adverse to the plaintiff, he would have a remedy by suit under Section 77 of the Act. They observed:

Plaintiff had therefore a complete remedy under the Act, and, not having chosen to follow it, has only himself to blame that the efficacy of the document has not been completed by registration...The agreement to transfer the mortgage was so far carried out that the deed of transfer was executed and no suit will lie to compel defendant to do that which he has already done. The only act wanting on his part to complete the contract was to register the deed of transfer, and this act, as we have shown, he could only be compelled to do by the proper proceedings under the Registration Act, followed by suit under Section 77, if plaintiff failed to obtain his rights by such proceedings.

This decision was followed in Palani Goundan v. Paramasiva Goundan (1896) 6 M.L.J. 263. It was there held that where the Registrar refused under Section 34 of the Registration Act to register a sale-deed on the ground that it has not been presented for registration within the four months allowed by law, the proper course for the party presenting the deed was to bring a suit to compel its registration on account of the refusal of the Registrar to register it, and that a suit for execution by the vendor of a fresh registered document did not lie. The decision on which the appellant's counsel most relied on is that in Satyanarayana v. Chinna Venkata Rao (1925) 50 M.L.J. 674 : I.L.R. Mad. 302. What was actually decided in that case was that on denial of execution by the vendor and refusal by the Registrar to register the sale-deed presented by the purchaser for registration, the sole remedy of the purchaser was to file a suit as provided by Section 77 of the Registration Act and not a suit for specific performance of the contract by the execution of a new sale-deed and delivery of possession. In that case one of the contracting parties to an agreement to sell objected to the registration of the document and the registration authorities after an enquiry refused to order registration as against her. The plaintiffs brought a suit for specific performance without filing a suit under Section 77 of the Registration Act within thirty days of the refusal by the Registrar. The third defendant pleaded that she did not execute the sale-deed. It was in these circumstances that it was held that the suit was not maintainable. The learned Chief Justice, Coutts Trotter, C.J., referring to Section 77 of the Registration Act said:

That is a statutory remedy given to a person who stands in the position that he is entitled to have a document registered by somebody else, that that somebody else has refused and the Registrar has upheld the refusal and he wants to have that compulsorily registered as against the other person.

The learned Chief Justice stressed on the fact that Section 77 prescribed a limitation period of thirty days. He observed:

The undertaking of a person who enters into a contract for the sale of real property is to do everything whereby an operative agreement in law can be effected. He has not done everything if he failed in an instrument where the obligation is cast upon him to obtain its registration and, therefore, a step in the creation of the legal relation of purchaser and vendor being wanting, you can compel the person who has not taken that step to take it. The answer appears to me to be very simple. Section 77 of the Registration Act not only tells you how you are to do that, but says that if you want to effect that purpose of having registration forcibly carried out by a decree of the Court, you must do it within 30 days.

The learned Chief Justice in the concluding portion of his judgment made certain observations which we think are very important. After stating that the remedy of specific performance, though provided by statute in this country, was nevertheless 'simply a crystallization into statutory form of an equitable remedy,' pointed out that laches was an answer to a claim for specific performance. He observed:

How it can be said that a man who is given an express statutory remedy by an Act of Legislature under Section 77 of the Registration Act and has failed to take advantage of it, has not been guilty of laches and is entirely free from blame, passes my comprehension. It appears to me that a man who has failed to adopt the remedy expressly provided by the statute cannot come to this Court and ask for an exercise in his favour of a discretionary and equitable remedy.

4. One difference between that case and the present case which appears to us to be of great significance is that in that case the plaintiffs, who alleged that there was wrongful refusal by Registrar to register the deed, did not file a suit under Section 77 of the Registration Act, whereas in the present case the first plaintiff did resort to such a suit, indeed he even went up on appeal but failed to obtain compulsory registration. The ratio decidendi of the decision in Satyanarayana v. Chinna Venkata Rao (1925) 50 M.L.J. 674 : I.L.R. Mad. 302, is emphasised in a subsequent decision of a division Bench of this Court in Venkatasubbayya v. Venkatarathnamma (1954) 1 M.L.J. 396 : I.L.R. (1954) Mad. 775. There when the document was presented for registration, one of the executants alone admitted execution and the Sub-Registrar refused to register it against the other executant. On appeal the District Registrar confirmed the order of the Sub-Registrar. The person in whose favaour the document was executed thereupon filed a suit for specific performance. It was held that the proper procedure to be adopted was to file a suit for enforcing the registration of the document before resort could be had to a suit for specific performance. At page 786 the ratio decidendi of Satyanarayana v. Chinna Venkata Rao (1925) 50 M.L.J. 674 : I.L.R. Mad. 302, is thus set out:

When a contract was entered into in favour of a party and in pursuance thereof a deed of transfer was executed, and when that party has already set in motion the machinery for enforcing the registration of that deed of transfer, the next step which the party should have legitimately taken was the institution of the suit for enforcing the registration as contemplated by Section 77 of the Registration Act...In our opinion, when once this machinery has been set in motion, the logical conclusion should be that action should be taken under Section 77 of the Registration Act and it was incumbent upon the party to file a suit to enforce the registration before she could think of a suit for specific performance.

The conclusion of the learned Judges is thus summed up:

We hold that the proper procedure to be adopted by the respondent in the present case is to file a suit for enforcing the registration of the document executed in her favour before she could report to a suit for specific performance.

This again was a case where a suit under Section 77 of the Registration Act had not been filed.

5. Reference was made by Mr. M.S. Venkatarama Ayyar, learned Counsel for the respondent, to the view taken by other Courts which are not exactly ad idem, with the view expressed in Satyanarayana v. Chinna Venkata Rao (1925) 50 M.L.J. 674 : I.L.R. Mad. 302, namely, Jhaman y. Amrit I.L.R.(1945) Pat. 325, and Balkishen Das v. Bechan Pandey I.L.R.(1931) All. 68, but we do not think it necessary to deal with them for the purpose of this case. But reference must be made to two other decisions of this Court before we proceed to state our conclusion. One is in Nynakka Routhen v. Vavana Mahomed Naina Routhen (1869) 5 M.H.C.R. 123, There the document in question was, after execution destroyed by fire before it could be registered. It was held that the plaintiff was entitled to ask the Court to compel the defendant to execute a fresh document, that is, to specific performance of the agreement. The other is Chinna Krishna Reddi v. Doraisami Reddi I.L.R.(1897) Mad. 19. where a document of conveyance was executed but before registration the defendant vendor got hold of the document fraudulently by stealing it from the plaintiff and concealed it for the purpose of preventing registration from taking place. It was held that the plaintiff was entitled to specific performance and to have a fresh document executed and registered. Both these decisions were cited to the division Bench which decided Satyanarayana v. Chinna Venkata Rao (1925) 50 M.L.J. 674 : I.L.R. Mad. 302, and the learned Chief Justice who delivered the judgment of the Bench did not express dissent from either.

6. On a consideration of all the authorities it appears to us that there is no need to subscribe to either of two extreme propositions. One is that a party to an agreement has no right whatever in any circumstances to seek specific performance of the agreement once a document has been executed in pursuance of the agreement but the document is not registered. The other is that a party to an agreement is entitled to compel the other party who has duly executed a document in pursuance of the agreement to go on executing fresh documents by resorting to a suit or suits for specific performance so long as no document has been registered. The decisions in Nynakka Routhen v. Vavana Mohamed Maina Routhen (1869) 5 M.H.C.R. 123, Chinna Krishna Reddi v. Doraisami Reddi I.L.R.(1897) Mad. 19, clearly demonstrate the untenability of the first proposition. The acceptance of the second proposition would mean that a party can take advantage of his own negligence or laches. In our opinion the correct view to take, which also seems to us to be just and equitable, is this. Taking the case of an agreement to sell, it cannot be said that the contract has been fully performed till there is a properly executed document which is also registered. It cannot be said that the moment a document is executed the contract ceases to be in force. The purchaser is always entitled to insist upon his right to have a proper registered instrument. Every vendor is bound to do all that is necessary to perfect the title of the purchaser, which includes the execution and registration of a proper conveyance. It is true that the purchaser can resort to proceedings under the Registration Act and the special statutory remedy under Section 77 of that Act to obtain registration of the executed document. But if for any reason it becomes impossible to obtain registration after resort to such proceedings or because of other circumstances which prevent any resort to such proceedings under the Act then undoubtedly the vendee is entitled to bring a suit for specific performance of the agreement to sell in his favour. This does not however mean that every such suit should be decreed. Being an equitable remedy, a Court is not bound to grant specific performance in every case in which an agreement has not been carried out in its entirety. Well established equitable considerations would justify a Court refusing to grant the relief of specific performance. To take an obvious case, if the vendor duly executes a sale-deed and hands it over to the vendee and the vendee neglects to present it for registration within the time prescribed and, therefore loses his right to have it registered, a Court may well say that the plaintiff has only to blame himself for not securing registration and therefore he would not be entitled to any relief because of his own negligence. Or if a vendee after the execution of the sale-deed fraudulently makes alterations in the document to the detriment of the vendor and therefore registration is refused, he cannot obtain the relief of specific performance because of his fraudulent conduct. It is this principle that is adverted to by the learned Chief Justice in the concluding paragraph of his judgment in Satyanarayana v. Chinna Venkata Rao (1925) 50 M.L.J. 674 : I.L.R. Mad. 302, which has already been extracted earlier on.

7. Subba Rao, J., was inclined to follow the ruling in Satyanarayana v. Chinna Venkata Rao (1925) 50 M.L.J. 674 : I.L.R. Mad.49, and was apparently of the opinion that it would govern the present case but for the amendment to Section 49 of the Registration Act and the insertion of the following proviso:

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 oi the Specific Relief Act, 1887, or as evidence of part performance of a contract for the purposes pf Section 53-A of the Transfer of Property Act 1882, or as evidence of any collateral transaction not required to be effected by registered instrument.

8. We fail to see how that provision can have any bearing on the question which we have been discussing, namely, as to the maintainability of a suit for specific performance in circumstances such as have been found in this case. That provision deals with a rule of evidence. It says that an unregistered document, in spite of the prohibition contained in Section 49, can in certain cases be received as evidence. A rule of evidence cannot certainly enlarge or alter substantive law. A rule of evidence cannot confer rights if there are none under the general law. The only thing which follows from the proviso is that if a suit for specific performance is maintainable, then in such a suit an unregistered document can be received in evidence. But whether a suit for specific performance would or would not lie in given circumstances must be decided on other considerations and on legal principles. How far the observations of Coutts Trotter, C.J., in Satyanarayana v. Chinna Venkata Rao (1925) 50 M.L.J. 674 : I.L.R. Mad. 302, that it was a 'very vicious method of construction' to say that a document, which purports to be one thing, can be allowed to be treated when it is found imperfectly to contain what it purports to be as a valid document of a different kind or order altogether, can be sustained after the above amendment to Section 49 of the Registration Act is a different matter; but that does not arise in this case as Mr. Sundaram Ayyar did not contend that Exhibit P-1 was not admissible as evidence of an agreement to sell.

9. Applying the above principles to the facts of the present case what we have is this. After the execution of the sale-deed by the second and third defendants, when it became known that the second defendant had executed another sale-deed in favour of the first defendant and trouble might ensue on that account, the third defendant apparently with the consent of the first plaintiff, made the endorsement to which reference was made at the opening of the judgment, providing that he would not be liable if there was any dispute as to title. The first plaintiff by consenting to such an endorsement was really releasing the third defendant from his obligation under the law. If any one was affected by it, it was only the first plaintiff. The second defendant was not a party to the endorsement and any rights inter se between the second and third defendants could not be affected by it. The second defendant himself was in no manner injured by the endorsement. It may be that the registration authorities were right in refusing registration because there was a material alteration. But in our opinion, we cannot say that the first plaintiff was guilty of such conduct as to preclude him from obtaining the relief of specific performance to which he was certainly entitled on the findings of the Courts below. If the first plaintiff had made any alteration fraudulently calculated to injure the vendors or any of them, then, of course, he would not be entitled to the equitable relief of specific performance. But he was not guilty of any such fraud. We therefore come to the conclusion that the plaintiffs were entitled to a decree. In this we agree with Subba Rao, J., though not on the same reasoning of the learned Judge. In the result this Letters Patent Appeal is dismissed; but we make no order as to costs as we have not entirely accepted the reasoning of Subba Rao, J.


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