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K. Hutchi Gowder Vs. H. Bheema Gowder - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Case NumberAppeal No. 252 of 1955
Judge
Reported inAIR1960Mad33
ActsEvidence Act - Sections 92; Indian Registration Act - Sections 49 and 77; Transfer of Property (Amendment) Supplementary Act, 1929
AppellantK. Hutchi Gowder
RespondentH. Bheema Gowder
Cases ReferredLindsay Petroleum Co. v. Hurd
Excerpt:
indian registration act (xvi of 1908), section 49 proviso-scope of--whether sale deed or other instrument relating to immovable property which for want of registration is inoperative to affect such property may be treated as agreement to execute same--circumstances under which party who has obtained unregistered deed can enforce his rights ; on 13th september 1946, the plaintiff, defendant and four others, each of whom owned an one-sixth share in an estate, entered into an agreement by which the defendant and the four others agreed to sell their undivided one-sixth shares to the plaintiff in consideration of his paying each of them, a sum of rs. 10,000. the amount was paid. in july 1949, the plaintiff and the vendors agreed that in the place of a deed of conveyance, each of the vendors..... (1) the plaintiff appeals from the judgment of the learned subordinate judge, ootacamund, dated 31-12-1954 in o. s. no. 226 of 1952 on his file. the plaintiff prayed for a decree directing the defendant to execute and register a deed of release or, in the alternative, an instrument of conveyance, in respect of the defendant's undivided 1/6th share in the property known, as wakefield estate, nilgiris. the subordinate judge dismissed the plaintiff's suit. hence the appeal.(2) on 13-9-1946 the plaintiff, defendant and four others entered into the agreement ex. a. 1. the document states that each of those six persons owned an undivided 1/6th share in the wakefield estate. the defendant and the four others agreed under that document to sell each his undivided 1/6th share in the estate to the.....
Judgment:
(1) The plaintiff appeals from the judgment of the learned Subordinate Judge, Ootacamund, dated 31-12-1954 in O. S. No. 226 of 1952 on his file. The plaintiff prayed for a decree directing the defendant to execute and register a deed of release or, in the alternative, an instrument of conveyance, in respect of the defendant's undivided 1/6th share in the property known, as Wakefield Estate, Nilgiris. The Subordinate Judge dismissed the plaintiff's suit. Hence the appeal.

(2) On 13-9-1946 the plaintiff, defendant and four others entered into the agreement Ex. A. 1. The document states that each of those six persons owned an undivided 1/6th share in the Wakefield estate. The defendant and the four others agreed under that document to sell each his undivided 1/6th share in the estate to the plaintiff in consideration of his paying to each of them Rs. 10,000/-. Rs. 1,000 was paid on the date of the agreement. Paragraph 13 of the agreement states.

"The purchaser will pay the balance of the purchase money, viz. rupees nine thousand only to each of the vendors on or before the 10th day of October 1946, and on payment of the balance of the purchase money, each of the vendors will execute and register in favour of the purchaser or his nominee a proper and valid conveyance of their sixth undivided share in the aforesaid premises known as the Wakefield Estate subject to the liabilities hereinbefore mentioned and deliver possession of their share to the purchaser. The costs of stamp on the conveyance and registration charges and purchaser's Solicitor's fees will be borne by the purchaser. And the purchaser will pay and discharge the liability under the mortgage indenture and under the aforesaid promissory note for rupees fifty nine thousand only and all other liabilities payable in respect of the said Wakefield Estate."

The promissory note referred to in that paragraph is the note which had been executed by all the six persons in favour of one Ricobthas Fathaimull and Co., for Rs. 59,000. Paragraph 5 of the agreement is in these terms:

"If the vendors should fail to execute and register the conveyance when called upon, the purchaser will be either entitled to claim the refund of the deposit of Rs. 1,000 only from each of the vendors with interest at 9 per cent per annum from date of payment till date of repayment or to specifically enforce the agreement against the vendors."

The balance of Rs. 9,000 payable out of the price to each of the five vendors named in Ex. A. 1 was only paid by the plaintiff on 10-10-1946. Ex. A. 6 is the receipt granted by the defendant acknowledging receipt of Rs. 9,000. The defendant and the four other vendors did not immediately execute a sale deed in favour of the plaintiff but sent to him the letter Ex. B. 3, which is in these terms:

"We shall execute the conveyance in respect of our one fifth share within 30 days from this date as soon as you have arranged to release us from our liability to Messrs. Ricobthas Fathaimull and Co., under the Promissory note, dated 15-8-1946 as you obtained back the receipt issued by us six persons to 19 persons for Rs. 9,500 each."

The letter was signed by the defendant and three others on 10-10-1946 and by the 5th vendor on 16-10-1946.

(3) The plaintiff alleged in the plaint that in July 1949 he and the vendors (defendant and the four others) agreed that, in the place of a deed of conveyance, each of the vendors would execute a deed of release, and that, in pursuance of that oral agreement, three of the other vendors had executed release deeds and had had them duly registered and that the fourth vendor being dead his legal representatives had agreed to execute and get registered a deed of release. In regard to the defendant, the plaintiff alleged that he had executed a release deed Ex. A. 2 in favour of the plaintiff on 30-10-1949. The release was, however, not registered. The plaintiff alleged that the defendant had failed to register the release deed executed by him and contended,

"The plaintiff is entitled to enforce the agreement dated 13-9-1949 as subsequently modified between the parties by compelling the defendant to execute and register a proper release deed or at least to execute and register a proper conveyance in favour of the plaintiff,"

On those allegations, the plaintiff prayed for a decree directing the defendant to execute and register a proper release deed, or, in the alternative, a proper conveyance of the defendant's 1/6th share in the Wakefield Estate.

(4) The defendant admitted execution of the agreement dated 13-9-1946 and receipt of Rs, 10,000, the price payable to the defendant for his 1/6th share of the estate. The defendant pleaded however that the plaintiff had not discharged the liabilities which under paragraph 3 of the agreement dated 13-9-10946, he was bound to discharge, and that the defendant was not bound to execute any conveyance or release deed until those liabilities were discharged. The defendant denied that he had agreed to in July 1949 that he would execute a release deed instead of a sale deed. In regard to the release deed. Ex. A. 2, the defendant pleaded that the date and month of the release deed filed in Court had been tampered with.

He did not deny the genuineness of his signature found in that document. He pleaded that the suit to enforce the agreement of 1946 was barred by limitation. In regard to the alleged agreement to execute a release deed, the defendant pleaded that, even if true, the agreement had been performed by the execution of the release deed filed in Court and that the plaintiff was not entitled to ask for the execution of a fresh release deed. The defendant pleaded further that the agreement alleged to have been entered it in July 1949 had, even if true, been superseded by the agreement executed by the plaintiff on 29-11-1949.

(5) The release deed dated 30-10-1949 contains a clause

"the releasor hereby assures and declares that......... whenever called upon by the releasee, the releasor will do sign and execute deeds and writings for better securing the estate at the cost of the releasee in manner aforesaid."

During trial, a contention was raised in the lower Court on behalf of the plaintiff that, on that clause, the plaintiff was entitled to call upon the defendant to execute a deed of conveyance. The defendant demurred.

(6) The learned Subordinate Judge found that the agreement on the part of the plaintiff to discharge the liabilities mentioned in para 3 of the agreement dated 13-9-1946 was not a condition precedent to the performance by the defendant of his obligation to execute a deed of conveyance; that the agreement to execute a deed of conveyance had been modified in July 1949 by an agreement to have a deed of release executed in the place of a deed of conveyance or sale; that the release deed Ex. A. 2 was in fact executed by the defendant on 30-10-1949, the date it bore, in performance of the agreement which had been entered into in July 1949 to execute a deed of release in place of a deed of sale and that the agreement to execute a deed of conveyance or deed of sale had not been superseded by the agreement dated 29-11-1949.

The learned Subordinate Judge held further that the suit, in so far as it sought to enforce the agreement of September 1946, was barred by limitation, that the agreement of July 1949 to execute a deed of release in the place of a deed of sale having been performed by the execution of Ex. A. 2 (the deed of release dated 30-10-1949), the agreement was not outstanding any longer for performance; that the plaintiff having failed to present the document for compulsory registration and get it registered was not entitled to ask for the execution of a fresh deed of release and that the clause in the release deed that the defendant would, whenever called upon, sign and execute all deeds for better securing the estate did not entitle the plaintiff to call on the defendant to execute a deed of conveyance. On those findings, the learned Subordinate Judge dismissed the plaintiff's suit.

(7) The first question or decision is whether, under the terms of the agreement Ex. A. 1, the plaintiff was bound to discharge the liability under the mortgage and the promissory note and other liabilities payable in respect of the estate (referred to in paragraph 3 of the agreement) before the plaintiff could call upon the defendant or any of the other four vendors to execute a conveyance, in respect of his undivided 1/6th share in the estate. In para 3 of the agreement, the plaintiff's right to obtain a sale deed is linked to his obligation to pay the price on or before 10-10-1946. His obligation to discharge the mortgage promissory note and other liabilities is an independent obligation, which would give rise to a claim for damages in the event of the plaintiff not discharging those liabilities and the vendors or any of them being damnified thereby. Clause 3 of Ex. A. 1 says that, on the price being paid "the vendors will execute and register in favour of the purchaser or his nominee a proper and valid conveyance." Clause 4 of Ex. A. 1 says

"If the vendors should fail to execute and register the conveyance when called upon, the purchaser will be...... entitled........ to specifically enforce the agreement against the vendors."

The effect of those two clauses is that, on paying the price, the plaintiff would become entitled to call on the defendant to execute a sale deed and, if the defendant failed to execute a sale deed, when called upon, the plaintiff would become entitled specifically to enforce the agreement and obtain a sale deed. The plaintiff's right to sue for specific performance would accure on the defendant's failure after receipt of the price, to execute a sale deed on being called upon to do so.

Agreeing with the learned Subordinate Judge, we hold that the discharge of the mortgage and the promissory note and the other liabilities referred to in the last sentence of clause 3 of Ex A. 1 was not integrally connected with the plaintiff's right to ask for sale deed or the defendant's liability to execute and register a sale deed. The defendant's liability to execute and register a sale deed arose as soon as, after payment of the price, the plaintiff called upon the defendant to execute a sale deed.

(8) After receiving on 10-10-1946 the entire balance of the price payable under the agreement, Ex. A. 1, the defendant wrote to the plaintiff the letter Ex. B-3 in which he said that he would execute the conveyance in respect of his 1/6th share "within 30 days from the date as soon as you have arranged to release us from our liability to Messrs. Ricobthas Fathaimull and Co." The defendant, D. W. 2, does not say that subsequent to the execution of the agreement Ex. A. 1, the plaintiff entered into a fresh agreement by which he bound himself not to ask for a sale deed until the liabilities referred to in the last sentence of para 3 of the agreement had been discharged by the plaintiff.

Ex. B. 3 cannot therefore be read as proving a subsequent agreement between the plaintiff and the defendant in regard to the conditions to be fulfilled before the plaintiff could call upon the defendant to execute a sale deed. Ex. B-3 appears to have been sent by the defendant in the belief that, under the agreement Ex. A. 1, the plaintiff was not entitled to call for a sale deed until he had discharged the debt due on the promissory note in favour of Messrs. Ricobthas Fathaimull and Co. That belief was unfounded. Therefore, the fact that the defendant wrote on 10-10-1946 that he would execute a sale deed only after the promissory note had been discharged cannot affect the plaintiff's right under Ex. A.-1 to demand a sale deed as soon as he had paid the price.

(9) The next question for determination is whether the plaintiff and the defendant agreed in July 1949 that, in the place of a conveyance, which under Ex. A. 1 the defendant had promised to execute, the defendant would execute a deed of release. A deed of release was actually executed by the defendant in favour of the plaintiff.

(10) The reason why a deed of release was executed instead of a conveyance is that one Sivarama Iyer, who had been a Revenue Inspector and who was a document writer, advised the parties that a release deed would be less expensive than a conveyance but would be equally effective and the parties accepted his advice. According to P.Ws. 1 and

2., Sivarama Iyer gave that advice and all the five vendors including the defendant accepted the advice and agreed in July 1949 to execute release deeds. Two of the five vendors executed the release deeds Exs. A. 3 and A. 4 in August 1949. P. W. 2, another of the vendors, executed the release deed Ex. A. 5 in November 1949.

The fact that each of two vendors executed a release deed in the place of conveyance renders the evidence of P. Ws. 1 and 2 probable, namely, that before August 1949 there had been an agreement between all the vendors on the one hand and the plaintiff on the other that release deeds should be executed in the place of conveyances. The defendant denies that he agreed to execute a release deed. We accept the evidence of P.Ws. 1 and 2 not hold that the defendant and the four other vendors named in Ex. A. 1 agreed with the plaintiff in July 1949, on the advice and in the presence of Sivarama Iyer, to execute release deeds in the place of conveyances.

(11) The agreement entered into in July 1949 that release deeds would be executed modified, only on that point, the agreement Ex. A. 1. In every other respect, Ex. A. 1 remained in full force and effect. After July 1949 that agreement had to be given effect to with the words "deed of release" substituted for the word "conveyance". Otherwise the rights and liabilities under Ex. A, remained unaffected.

(12) It appears to have been contended in the lower court though that contention was not repeated at the hearing of the appeal, that the modification that a release deed would be executed in the place of a conveyance could not be given effect to because that was a modification in a written agreement made by an oral agreement. Proviso 4 to S. 92 of the Evidence Act enacts that the existence of any distinct subsequent oral agreement to modify a contract, whose terms have been reduced to writing, may be proved, except in cases in which such contract is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents. The agreement, Ex. A. 1, being an agreement to convey, though reduced to writing, is not required by law to be in writing. The agreement was not registered under the Indian Registration Act. The agreement could therefore be validly modified by the oral agreement entered into between the parties in July 1949.

(13) The next question for decision is whether the defendant executed the release deed Ex A. 2 on 30-10-1949. The defendant does not deny his signature to the document. He admits that he read the document before he signed it. In the written statement, the defendant stated "the date and month of the alleged release deed...... have been tempered with.'' He did not satisfy the month or the date when he executed the document. He suggested to the plaintiff in cross-examination that the month was corrected from September to October. He did not suggest that any alteration in the date (apart from the month) had been made. As D.W. 2, however, the defendant said that he signed Ex. A. 2 in January 1949.

That is also the evidence of the witness D.W. 3. The learned Subordinate Judge thinks that the document had been typed out on 30-1-1949 and that since the defendant signed the document on 30-10-1949, the word "January" was erased and the word "October" substituted. It is not likely that the document was typed out in January 1949 because the agreement to execute a release deed was entered into only in July 1949. It is probable that this particular release deed and other release deeds were typed out in July. The probability also is that the space for typing the date and the month were left blank and were filled in at the time of the execution of each of the release deeds by the respective releasors. We accept the evidence of P. Ws. 1 and 2. We do not believe D.W. 2 or D.W. 3. We find that the defendant executed the release deed Ex. A. 2 on the date it bears, namely, 30-10-1949.

(14) The release deed Ex. A. 2 has not been registered. The defendant delivered the document to the plaintiff after executing it. We have to fix the responsibility for its non-registration. The plaintiff could, of course, have presented the document in the office of the appropriate Registrar for registration. In that event notice would have gone to the defendant. There is no reason to think, that he would have denied registration. If he denied registration, there would have been an enquiry and, if registration was eventually refused by the registration authorities, the plaintiff would have had to institute a suit under S. 77 of the Registration Act. But the plaintiff did not present the document for registration.

We have to consider whether the omission was wilful or due to negligence or whether the omission was due to causes for which the plaintiff cannot justly be held responsible. There is no reason to think that the plaintiff did not want to have the document registered. Therefore, wilful failure to present the document for registration may be ruled out. The question then is, whether the failure to have the document registered was due to negligence on the part of the plaintiff or due to causes for which he cannot justly be held responsible.

(15) In para 7 of the plaint, the plaintiff alleges that the defendant has failed to register the release deed executed by him. In paragraph 13 of the written statement, the defendant pleaded "Having failed to get the said release deed compulsorily registered by pursuing the procedure known to law, the plaintiff cannot now file this suit."

(16) Under Ex. A. 1, the defendant promised "to execute and register in favour of the purchaser or his nominee a proper and valid conveyance." No conveyance would be valid unless it was registered. The defendant undertook the obligation of having the conveyance which he would execute, duly registered. That obligation would, under the agreement as modified in July 1949, attach itself to the release deed. That obligation on the part of the defendant to have the conveyance registered was not discharged by handing the document over to the plaintiff. Since the defendant had expressly undertaken the duty of having the document registered, the defendant would, after handing the document over to the plaintiff, have to call upon him to present it for registration or to deliver it back to the defendant for being presented for registration.

It is only if the plaintiff declined, on being so called upon either to present the document for registration or to deliver it to the defendant that the defendant would be relieved of his obligation to have the document registered; and not otherwise. The defendant does not say that he called on the plaintiff to present the document for registration or deliver the document to him (defendant) for being presented for registration. Therefore the responsibility for non-registration on the specific promise embodied in Ex. A. 1 is that of the defendant and not that of the plaintiff.

(17) But let us assume that, by taking the document from the defendant, the plaintiff undertook responsibility for getting the document registered. That is to say, let us treat this as an ordinary case, where the vendor agrees to execute a conveyance, without specifically agreeing also to have the conveyance registered. Even in such a case the agreement would not be fully performed until the vendor has done all that he is required to do to have the document duly registered. This is because an agreement to execute a conveyance necessarily implies as agreement to execute a valid conveyance, that is to say, an agreement to have a conveyance executed, and, where it requires registration, to assist in such registration. Let us assume that the case before us is an ordinary case of that kind, where the vendor who has promised to convey immoveable property executes a deed of conveyance and places it in the hands of the vendee.

The plaintiff says as P. Ws. 1 that Ex. A. 1 could not be registered as the defendant evaded and did not come when asked to do so. In cross examination on that point he says "I know that a document has to be registered within four months of its execution. I did not seek compulsory registration as I thought he would execute another." The evidence, in other words, is that the plaintiff was requesting the defendant from time to time to go to the Registrar's office and get the document registered, but that the defendant on some ground or other, put the plaintiff off and that the plaintiff did not present the document for registration because the plaintiff believed that even if the time allowed for registration got past the defendant would execute a fresh release deed and have it registered.

The plaintiff, if his evidence be true, was willing to allow the defendant to have the documents registered at his convenience and believed that, if it was inconvenient for the defendant to have the document registered within the time allowed, the defendant would execute a fresh release deed and get it registered. If that evidence be accepted, it would follow that responsibility for non-registration is on the defendant and not on the plaintiff. The defendant as D. W. 2 says--there was no demand to register the document. That is not probable at all. The plaintiff is bound in the usual course to have asked the defendant to go to the Registrar's office to have the document registered.

(18) We accept the plaintiff's evidence and find that the document could not be registered as the defendant evaded and did not go to the Sub-Registrar's Office when asked to do so, and that the plaintiff did not present the document for registration because he believed in good faith that if the time for registration of that particular document expired the defendant would execute another release deed and get it registered. We hold that the responsibility for failure to have the document registered is the defendant's and not the plaintiff's.

(19) The next question for decision is whether the agreement to execute a release deed became superseded by Ex. B. 2, the agreement dated 30-11-1949 (the date 29-11-1949 in the defendant's written statement appears to be a mistake for 30-11-1949). The point was not argued at the hearing of the appeal. It is adequately considered in paragraph 10 of the learned Subordinate Judge's judgment. Ex. B. 2 relates to the discharge by the plaintiff of certain liabilities of the business which had been carried on under the name and style of "Wakefield Tea Estate Co." It has nothing to do with the execution of a release deed by the defendant or the registration of the release deed which had been executed by the defendant on 30-10-1949 or the performance of the obligations undertaken by the defendant in and by the release deed. Ex. A. 2. We find that Ex. B. 2 does not impair the obligations of the defendant under the agreement Ex. A. 1 or under the oral agreement entered into in July 1949 or under the release deed, Ex. A. 2

(20) The plaintiff prays in the plaint that the defendant be directed to execute and register a proper deed or in the alternative a proper conveyance of the defendant's 1/6th share in the Wakefield Estate. A proper release deed has been executed but it has not been registered. The point for decision is whether the plaintiff is entitled to call on the defendant to execute a fresh release deed. We have found that the defendant agreed in July 1949 to execute a release deed. But if this suit be regarded as a suit to enforce the agreement of July 1949, questions of limitation would arise because the suit was instituted only on 30-10-1952. No such question would arise if the deed of release, Ex. A. 2 could itself be read as an agreement to execute a release deed and if the suit may be regarded as a suit to enforce that agreement.

The point for decision is whether a sale deed or other instrument relating to immoveable property, which for want of registration, is inoperative to affect such property, may be read as an agreement to execute a fresh sale deed or other instrument in the same terms as the unregistered instrument. That question was answered in the negative in Venkataswami v. Kristayya, ILR 16 Mad 341. The appellant's learned counsel argues that answer has been rendered obsolete by the proviso to S. 49 of the Indian Registration Act enacted by the Transfer of Property (Amendment) Supplementary Act XXI of 1929, which took effect on 1-4-1930. That argument makes it necessary for us to consider the reasons for the enactment of the proviso and ascertain the limits of the field of its operation.

(21) The facts in ILR 16 Mad 341 were these. The defendant agreed with the plaintiff to transfer a mortgage deed. In pursuance of that agreement the deed of transfer was executed. It was not registered. The plaintiff instituted the suit, which gave rise to the second appeal, praying for registration of the document or for the execution and registration of a fresh deed of transfer. The trial court and the lower appellate court passed a decree that the defendant do execute and register a fresh deed of transfer.

In second appeal, Muthuswami Aiyar and Handley JJ. held that it was out of the question that a decree could be passed directing registration of the deed of transfer which had been executed. The document would have to be presented for registration within the period allowed and, since the period had expired, no decree directing its registration could be passed. The learned Judges had then to consider whether the decree passed by the lower courts directing the execution of a fresh deed of transfer was correct. On that question, the learned Judges said,

"The fallacy of the Lower Courts consists in treating the document, Ex. A., as evidencing merely an agreement to transfer the mortgage, whereas it purports to be an operative transfer of the mortgage. If it had been merely an agreement to transfer contemplating a future formal deed of transfer, it would not have required registration. S. 17(h). 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 proceeding under the Registration Act, followed by suit under Sec. 77, if plaintiff failed to obtain his rights by such proceedings."

Two distinct propositions are laid down in the passage quoted above. The first is this. A deed of transfer could not be read as an agreement to execute a deed of transfer. The second proposition is this, viz., that the suit, in so far as it prayed for the execution of a fresh deed of transfer should be regarded as a suit to enforce specific performance of the agreement in pursuance of which the unregistered deed of transfer had been executed and since that agreement had been performed in part by the defendant by executing a deed of transfer, he could not be compelled to perform that part of agreement a second time. After executing the document, the defendant was under an obligation to assist in the registration of the document. That he could do only after the document was presented for registration. Since the plaintiff failed to present the document for registration, the defendant was not at fault at all and the plaintiff could not call upon the defendant to undo the effects of his (plaintiff's) own fault.

(22) Let us consider the first proposition, namely, that a deed of sale or of release relating to immoveable property, which, for want of registration, is incapable of affecting such property, cannot be read as an agreement to execute a deed of sale or deed of release in future so as to form the foundation for a suit for specific performance. That proposition formulated in ILR 16 Mad 341 was reaffirmed 27 years later in Thayarammal v. Lakshmi Ammal, ILR 43 Mad 822: (AIR 1920 Mad 660(2)). The facts in the latter case were that the plaintiff, who had obtained a sale deed from the defendant, failed to get it registered. The failure was due to his own default in the payment of the purchase money.

Thereafter he sued for a decree directing the defendant to execute a fresh sale deed and get it registered. The Court held that, since no default was attributable to the defendant and since it had been on the other hand, that it was the fault of the plaintiff in not paying the consideration that led to the document remaining unregistered, the case was within the principle of ILR 16 Mad 341. The court re-affirmed the proposition that it was not open to the plaintiff, in regard to a document which had become inoperative by reason of non-registration to call on the court to read it, as an agreement to sell. An expression of opinion to the contrary made in Venkataseetharamayya v. Venkatarammayya, ILR 37 Mad 418: (AIR 1914 Mad 439) was pronounced to be an obiter dictum and was dissented from.

(23) Dealing with the contention that a sale deed which had become inoperative for want of registration should be read as agreement to sell, Coutts Totter C. J. said in Satyanarayana v. C. Venkatarao, 50 Mad LJ 674 at 677: (AIR 1926 Mad 530 at pp. 531-532). "Should have thought it a very vicious method of construction to say that a document which purports to be one thing is to be allowed to be treated, when it is found imperfectly to contain what it purports to be, as a valid document of a different order altogether."

(24) The judgments referred to above were handed down before the introduction by the Transfer of Property (Amendment) Supplementary Act, XXI of 1929 of the existing proviso to S. 49. The section (so far as relevant) as it stood before the Amendment, read,

"No document required by S. 17....... to be registered shall

(a) affect any immoveable property comprised therein, or........

(c) be received as evidence of any transaction affecting such property, unless it has been registered."

(25) The following proviso was added to the section by the Transfer of Property (Amendment) Supplementary Act.

"Provided that an unregistered document affecting immoveable property and required by the Act.......... to be registered may be received as evidence of a contract in a suit for specific performance under Ch. 11 of the Specific Relief Act 1877........."

It is argued that the proviso has the effect of rendering obsolete earlier decisions which lay down that a sale deed, which, for want of registration, is inoperative to affect the property comprised in it, cannot be read as an agreement to sell the property in future. The proviso itself does not say so. All that the proviso says is that, where a person sues to enforce a contract for the sale of immoveable property and tenders in evidence in such suit a document affecting such property, which is required to be registered but is not registered, no order declining to receive such document in evidence may be passed on the mere ground that the document is not registered. Where a person, who has an unregistered sale deed in his possession, sues for specific performance of an agreement to sell the property comprised in such sale deed, what he really seeks is the enforcement of the agreement in pursuance of which the sale deed was executed.

In such a case, one of two defences may be taken by the defendant. He may deny the agreement that is pleased in the plaint by the plaintiff, or, admitting the agreement, the defendant may plead that, in pursuance of the agreement, the unregistered sale deed in the possession of the plaintiff has been executed and that the plaintiff is not entitled to demand that, on that point, the agreement be performed a second time. Suppose that the alleged initial agreement to sell the property was oral and that the defendant denies the agreement, then the unregistered sale deed may be used to prove that there was an earlier agreement to sell the property. The proviso to Sec. 49 which took effect on 1-4-1930 enables the unregistered sale deed in such a case to be tendered in evidence with a view to prove the antecedent agreement to sell. When such antecedent agreement is proved, the question whether, notwithstanding the execution of the unregistered sale deed, the antecedent agreement to sell is outstanding for enforcement would have to be heard independently and decided.

(26) There is one other category of cases in which a definite alteration in the law was effected by the enactment of the proviso. Such alteration was the immediate purpose of the enactment. The law applicable to that category of cases was laid down by the Judicial committee of the Privy Council in James R. R. Skinner v. R. H. Skinner, 57 Mad LJ 765: (AIR 1929 PC 269). In that case, there was an instrument of transfer which created a present interest in immoveable property. The document in order to be operative to affect the property, had to be registered. But it was not registered. The document however contained an agreement that the defendant would execute another document, if called upon by the plaintiff. But that agreement that the defendant would execute another document was a term of the transfer purported to be effected by the document.

Their Lordships held that, because the agreement that the vendors would, if so required, execute in future a registered sale deed was one of the terms of the transfer and therefore an integral part of the transfer, the document could not be admitted in evidence to prove that agreement. That particular state of the law was effectively altered by the enactment of the proviso. By reason of the proviso, an agreement, to execute a document, which is contained in an instrument of transfer and which forms part of the terms of the transfer, may be proved by admitting the instrument of transfer in evidence, notwithstanding, that the instrument is not registered and is therefore inoperative to affect the immoveable property comprised therein.

(27) The first part of the proviso to S. 49, which has been quoted above, effected a change in the pre-existing law to this extent, namely, (1) it placed it beyond doubt that an unregistered instrument which, by reason of non-registration, is in-operative to affect immoveable property, may be tendered in evidence to prove the agreement in pursuance of which the instrument was executed and (2) where an unregistered instrument contains a contract to execute a fresh document, the unregistered instrument may be tendered in evidence to prove the contract. The words "may be received as evidence of a contract" occurring in the proviso mean, in our opinion, "may be received in evidence to prove a contract."

Those words namely "may be received as evidence of contract" do not, in our opinion, mean "may itself be read as a contract to execute a document in future." The question whether the enactment of the proviso has affected the rule laid down in ILR 16 Mad 341 that a deed of transfer which, for want of registration, is inoperative to affect the property comprised therein, cannot be read as agreement to execute a document in future, was left open in Manicka Goundan v. Elumalai Goundan , Our answer to that question is in the

negative.

(28) On a question of construction it does not seem reasonable to say that a deed of transfer should, if registered, be read as a deed of transfer and should, if unregistered, be read as an agreement to execute a deed of transfer in the future.

(29) The Full Bench decision in Muruga Mudaliar v. Subba Reddiar relied on by the learned counsel for the appellant

does not touch the present question. In that case, there was an agreement of lease which, for want of registration, was inoperative to effect the property comprised in it. The plaintiff sued for damages for breach of the agreement of lease. The question was whether the document was admissible in evidence, It was held that is was. No question arose in that case of the plaintiff's right to read the document as other than it was, namely, as an agreement of lease.

(30) We hold that the proposition laid down in ILR 16 Mad 341 namely that a deed of transfer, which by reason of non-registration, is ineffective to affect the immoveable property comprised therein, cannot be read as an agreement to execute a deed of transfer in future, continues to be a correct statement of the law on that point and that its validity has not been affected by the enactment in 1929-1930 of the proviso to Sec. 49 of the Registration Act.

(31) We have now to consider the second proposition laid down in ILR 16 Mad 341 relating to the right of the plaintiff, who has in his possession an unregistered deed of transfer, to call on the defendant to execute a fresh deed of transfer. Where a plaintiff sues for the execution of a fresh document what he really does is to seek specific performance of the agreement in pursuance of which the document in his possession was executed. The defence is that, since the document has been executed, the plaintiff cannot call on the defendant to perform, that part of the agreement a second time. It is obvious that that cannot form a complete defence in all circumstances. The document may be destroyed by fire or may be lost due to causes beyond the control of the plaintiff.

In such a case, it has been held that the plaintiff is entitled to have a fresh document executed (Please see Nynakka Rowthen v. Vavana Mahomed Naina Rowthen, 5 Mad HCR 123). The defendant or persons interested in him may abstract the document and may make it unavailable to the plaintiff for being presented for registration. In such a case again, the plaintiff would obviously be entitled to call on the defendant to execute a fresh document and get is registered. (Please seeChinna Krishna Reddi v. Doraiswami Reddi ILR 20 Mad 19). It cannot therefore be said that in no case can a defendant, who has executed a document, which becomes inoperative for want of registration, be called upon to execute a fresh document.

(32) Cases which have dealt with the right of a plaintiff, who has an unregistered (and therefore inoperative) deed of transfer, in his possession, to call for the execution of a fresh document fall under two classes. The first class of cases are those in which the plaintiff presented the document for compulsory registration and, having failed to have the document registered, instituted a suit for specific performance of the agreement to execute a deed of transfer. The second class of cases are those in which the plaintiff instituted a suit for specific performance, without having presented for registration the document which had been executed.

(33) 50 Mad LJ 674: (AIR 1926 Mad 530) was a case in which the plaintiff had presented the document for registration. The registration authorities refused registration as against the 3rd defendant. The plaintiff did not institute a suit under S. 77 of the Registration Act for a decree directing the document to be registered. Instead the plaintiff instituted a suit for a decree directing the execution of a fresh document and registration of such document. This court held that the remedy of specific performance was an equitable remedy, which was not available to a person who had been guilty of laches. Coutts-Trotter C. J. said,

"How it can be said that a man who was given an express statutory remedy by an Act of legislature under S. 77 of the Registration Act or 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."

In that view, the suit was dismissed. That decision was followed in Venkatasubbayya v. Venkatarathanamma, .

(34) The question arises, what happens if the plaintiff's suit under S. 77 of the Registration Act to compel registration of the document fails, would he be entitled thereafter to institute a suit for specific performance? That question is answered in . The

document considered in that case had been executed by defendants 2 and

3. After its execution, the 2nd defendant had sold the property to the 1st defendant by a sale deed which they antedated. By reason of the execution of that sale deed, the 3rd defendant added at the end of the sale deed executed in favour of the plaintiff, the following sentence, "Should any dispute arise in respect of this, it shall not concern us."

The plaintiff presented the document for registration. The 2nd defendant declined to consent to registration on the ground of that unauthorised addition made by the 3rd defendant in the sale deed in favour of the plaintiff. The sale deed was registered as against the 3rd defendant. Registration was refused as against the 2nd defendant. The plaintiff instituted a suit under S. 77 of the Registration Act for a decree directing registration. The suit was dismissed. He filed an appeal. During the pendency of the appeal, he filed the suit for specific performance of the agreement to execute a sale deed. The appeal preferred against the decree passed in the suit under Sec. 77 was dismissed.

The suit for specific performance was decreed by the District Judge in Appeal. The District Judge directed defendants 1 and 2 to execute a fresh sale deed in favour of the plaintiff in regard to a half of the property. That decree was confirmed in second appeal. There was an appeal under the Letters Patent. The court held that, since registration was refused against the 2nd defendant, because of the alteration made by the 3rd defendant, the first plaintiff could not, by reason of his consenting to the alteration made by the 3rd defendant, be held to be guilty of such conduct as would preclude him from obtaining the relief of specific performance. In that view, the judgment pronounced in second appeal was confirmed.

(35) The position, in law, of a person, who after presenting a deed of transfer for registration, institutes a suit for a decree directing the execution of a fresh deed of transfer, is this. If his application for registration is refused by the registration authorities, his suit for specific performance would not be maintainable unless he had instituted a suit under S. 77 of the Registration Act and had failed in obtaining a decree directing registration. If he had instituted a suit under S. 77 and failed, his suit for the execution of a fresh deed of transfer may be decreed in his favour if it is found that the refusal to register the first document was on grounds which could not disentitle him to the equitable remedy of specific relief.

(36) We have now to consider the second class of cases where the plaintiff, having an unregistered (and for that reason inoperative) document in his possession, sues for a decree directing the execution of a second document. ILR 16 Mad 341 was a case in which the plaintiff sued for the execution of a second document without having presented the first document for registration. The lower Courts found that the defendant was not justified in his refusal to register the document. On that ground, this Court did not allow the defendant appellant his costs. That decision, if it stood by itself, would seem to make it a rigorous rule of law that a person who had obtained a document but had failed to present it for registration would not, while he continues in possession of the document, be entitled in any circumstances, to institute a suit for a decree directing the execution of a second document. The rigour of that rule has however been modified by subsequent decisions. In ILR 43 Mad 822: (AIR 1920 Mad 660(2)), the learned Judges said that, if the failure to have the document registered had been due to act of God or to conduct amounting to fraud on the part of the executant or to any default attributed to him, then, the plaintiff might be entitled to a decree directing the defendant to execute a fresh document. Valambalachi v. Duraiswami Pillai, AIR 1928 Mad 344, was a case in which, again, the plaintiff's suit to have a second document was dismissed. The learned Judge however made the qualifying observations:

"I do not wish it to be understood to say that there may not be proper cases apart altogether from the provisions of the Registration Act in which a purchaser of property who had accepted a document unregistered will not be entitled to come to Court and ask for specific performance of the contract on the ground that it has not been properly performed. But such a case must be made out on the particular facts."

In , the learned Judges, who said that a plaintiff, whose application for registration had been refused by the registration authorities and who had not instituted a suit under S. 77 of the Registration Act, could not institute a suit for a decree directing the execution of a second document, added by way of obiter:

"It would be a different matter if this unregistered document is sought to be received as evidence of a contract in a suit for specific performance if the party has not set in motion the machinery provided by the Registration Act under Ss. 72 to 76."

In , in which this Court affirmed the decree which

directed the defendant to execute a fresh sale deed in favour of the plaintiff, who had failed in his suit instituted under S. 77 of the Registration Act, the Court said,

"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 proceeding sunder the Registration Act and the special statutory remedy under S. 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."

(37) The result of the decision is that a plaintiff who, having obtained a deed of transfer which requires registration in order that it may become operative, institutes a suit for a decree directing the defendant to execute a fresh deed of transfer, without having presented for registration the deed which had been executed, cannot obtain a decree in such suit unless the plaintiff proves that the failure to have the deed registered was not due to any wrongful act or negligence on his part.

(38) In this case, we have given reasons for the view that the failure to have Ex. A. 2 registered was not due to any wrongful act or to negligence on the part of the plaintiff. We have found further that, under the terms of Ex. A. 1, as modified by the oral agreement of July 1949, it was the defendant's duty not merely to execute a deed of release but also to have it registered and that the defendant has failed to discharge that obligation of having the document registered. We hold that provided that the suit is in time, the plaintiff is entitled to specific performance of the agreement entered into in July 1949 to execute and register a deed of release.

(39) The agreement to execute a deed of release was entered in July 1949. The suit was instituted on 30-10-1952. The question is whether the suit is in time. Ex. A. 2 executed on 30-10-1949 states that it was executed in pursuance of the agreement dated 13-9-1946 under which the defendant was bound to relinquish his right, title and interest to the plaintiff. Under the agreement dated 13-9-1946 however, the defendant became liable to execute a conveyance and not a deed of release. His liability to execute a deed of release arose under the agreement entered into in July 1949. Therefore, the liability to execute a release deed acknowledged in Ex. A. 2 is a liability which arose under the agreement of July 1949. The language used in Ex. A. 2 applies partly to the agreement Ex. A. 1 and partly to the agreement of July 1949. The whole of the language does not apply correctly to the agreement Ex. A.1. In such circumstances, evidence may be given to show that the liability to execute the release deed acknowledged by Ex. A. 2 was the liability undertaken under the agreement of July 1949, although that agreement is not specifically referred to in Ex. A. 2 (please see S. 97 of the Evidence Act). The liability acknowledged under Ex. A. 2 was not discharged by the mere execution of the release deed. Ex. A. 2 cannot be regarded as a document discharging the liability until it was registered. It has not been registered. Therefore the acknowledgment of liability contained in it can be given effect to for the purpose of saving limitation for enforcing the agreement of July 1949.

(40) We hold that the plaintiff is entitled to a decree directing the defendant to execute a release deed.

(41) The plaint contains an alternative prayer that the defendant be directed to execute a conveyance. Under Ex. A. 1, the defendant promised to execute a conveyance. But that promise was superseded by consent by the promise made in July 1949 that a deed of release would be executed and is not outstanding for enforcement. We hold that the plaintiff is not entitled to ask for the execution of conveyance on the basis of the agreement Ex. A. 1.

(42) The plaintiff's claim to have a conveyance executed is rested in the alternative on the agreement contained in Ex. A. 2 Ex. A. 2 (release deed) states

"the releasor hereby assures and declares......... that whenever called upon by the releasee, the releasor will do sign and execute all deeds and writings for better securing the estate."

The proviso to S. 49 of the Registration Act enables Ex. A. 2 to be received in evidence to prove the agreement. The plaintiff's learned counsel in the lower Court appears unfortunately to have failed to tell the learned Subordinate Judge that a release deed would not be effective to transfer title. A release deed can only feed title but cannot transfer title. If, for example, the plaintiff claims that he has acquired title to the defendant's 1/6th share in the estate by adverse possession and the defendant contests that position a release deed by the defendant would be effective to place beyond doubt the fact of the plaintiff having acquired title by adverse possession. If two persons claim title to the same property adversely to each other, a release deed by the one to the other may be effective to complete or place beyond doubt the latter's title to the property. But it is not the case here that the plaintiff and the defendant claimed the undivided 1/6th share in the estate, which is in suit, adversely to each other. Ex. A. 1 proceeds o the basis that the undivided 1/6th share belonged to the defendant to the exclusion of the plaintiff. It is true that the plaintiff himself owned another undivided 1/6th share and that, by transfers effected by the four other persons, he became entitled to an undivided 5/6th share. But yet except as purchaser he had no claim to make to the defendant's 1/6th share. Title to that share could hence be acquired only by a proper deed of conveyance or by adverse possession. The plaintiff had not acquired title by adverse possession when he instituted the suit. In order that title to the estate might be secured to him, it was necessary that he should have a proper deed of conveyance. Even if Ex A. 2 had been registered, the plaintiff would need a deed of conveyance in order to become owner otherwise than by adverse possession. The expression "all deeds and writings for better securing the estate' cannot be limited to deeds or writings which were in the contemplation of the parties at the time of the execution of Ex. A. 2. any deed or writing, which the plaintiff may subsequently find to be necessary in order to secure title, would, under that clause in Ex. A. 2, have to be executed by the defendant, provided, the plaintiff's claim that such further document he executed was reasonable and the plaintiff offered to bear the expenses of the execution and registration of such document. Among the many reservations which Srinivasa Aiyangar J. made in his exhaustive judgment if I may say so, in AIR 1928 Mad 344, is the following:

"If in a sale of sale deed there should be a covenant for further and better assurance, the right to get a fresh document may conceivably be covered by such a covenant."

That was said before the amendment of S. 49 of the Registration Act by the introduction of the proviso. The proviso places the plaintiff's right in that matter beyond the pale of controversy.

(43) We hold that, in enforcement of the promise made by the defendant in Ex. A. 2 to sign and execute all deeds and writings for better securing the estate, the plaintiff is entitled to have a proper deed of conveyance executed by the defendant at the plaintiff's cost and registered.

(44) Ex. A. 2 is dated 30-10-1949. The suit was instituted on 30-10-1952, the last day of limitation, for enforcing the promise contained in Ex. A. 2. It is alleged that the plaintiff is disentitled, on the ground of laches, to a decree for specific performance. On that question, we adopt with respect the following observations made by Sir Barnes Peacock in Lindsay Petroleum Co. v. Hurd, (1874) 5 PC 221 at pp. 239-40,

"Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material............ The situation of the parties having........... in no substantial way been altered, either by the delay or by anything done during the interval, there is in these circumstances nothing to give special importance to the defence founded on time."

(45) The appellant, we have found, is entitled to a decree directing the defendant to execute either a deed of release or a deed of conveyance. The appellant's learned counsel requested during arguments that a decree directing the defendant to execute a deed of conveyance might be passed. We hold that a deed of conveyance is necessary in order to secure title to the plaintiff.

(46) We allow the appeal and set aside the judgment and decree of the learned Subordinate Judge. There will be a decree directing the defendant to execute a proper deed of conveyance to the plaintiff of the defendant's undivided 1/6th share in the estate in accordance with the terms of Ex. A. 1. Time for execution two months from this date. In default, a document will be executed by the Court on behalf of the defendant and will be duly registered. The appellant will have his costs in both Courts.

HC/D.H.Z.

(47) Appeal allowed.


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