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Unregistered Agreement to sell can not be specifically enfor

Posted on 07 March 2008 by Kalpana.S

Court

Allahabad High Court



Brief



Citation



Judgement

HIGH COURT OF JUDICATURE AT ALLAHABAD

RESERVED

First Appeal No. 240 of 1998.
Vijay Kumar Sharma......................Appellant/Defendant
vs.
Devesh Behari Saxena..................Respondent/ Plaintiff.


*****************

Hon. Yatindra Singh, J.
Hon. Vijay Kumar Verma, J.
(Delivered by Hon. Vijay Kumar Verma,J)
1. Challenge in this appeal is to the judgement and decree dated 18.04.1998, passed by 3rd Additional Civil Judge (Senior Division) Ghaziabad, in O.S. No. 436 of 1995 (Devesh Behari Saxena vs. Vijay Kumar Sharma), whereby the suit has been decreed for mandatory injunction directing the defendant to get the agreement to sell dated 22.01.1993 registered before registering authority within one month and then to execute sale deed in favour of the plaintiff in terms of this agreement after receiving balance sale consideration of Rs. 13,21,000/- (Rupees Thirteen lac Twenty One Thousand only) and hand over possession of the disputed plot to the plaintiff after getting the sale deed registered.
It is further held in the impugned decree that if due to pendency of appeal in Hon'ble Supreme Court or non- availability of no objection certificate from the competent authority, specific performance of the said agreement becomes impossible, then the plaintiff would be entitled to get back his earnest money of Rs. 7,00,000/- (Rupees seven lac) from defendant with interest @ 18% per annum from 22.01.1993 to 14.04.1995 and thereafter @ 6% per annum from 15.04.1995.
FACTS
2. The plaintiff-respondent instituted O. S. No. 436 of 1995 in the court of Civil Judge (Senior Division) Ghaziabad, for specific performance of the agreement for sale dated 22.01.1993 and possession over the disputed plot. It was also prayed that if due to any legal requirement, registration of the agreement is considered necessary, then the same be got registered first and, thereafter, transfer deed be got executed and registered in favour of the plaintiff. In the alternative, relief for decree of refund of earnest money of Rs. 7,00,000/- and recovery of Rs. 13,21,000/- as damages with interest @ 18% per annum was also claimed.
Shorn of unnecessary details, the case of the plaintiff, in brief, is that the defendant agreed to sell his plot No. 133 (Block A) area 465 Sq. Mtrs., situate in Sector 15-A, NOIDA, Paragana & Tehsil Dadri, District Ghaziabad for consideration of Rs. 20, 21,000/- and after receiving Rs. 7,00,000/- in part payment through cheque No. 857877 of Canara Bank, Green Park Extension, New Delhi as earnest money, executed an agreement to sell on 22.01.1993. The balance sale consideration was agreed to be paid at the time of execution/registration of transfer deed, which was to be executed by 02.04.1993 after obtaining all necessary permissions from NOIDA and concerned departments. It is alleged that in terms of the said agreement both the parties submitted form No. 37-1 for getting permission from Income Tax Department under section 269 UC (2) (3) of Income Tax Act 1961 and defendant also submitted form No. 34A under section 230A of Income Tax Act, but permission was not granted by the Income Tax Department and order for purchase of the disputed property by central government was passed on 24.03.1993. That order was challenged by the plaintiff in High Court in Writ Petition No. 619 of 1993, which was dismissed on 15.04.1993 on the ground that purchaser has no right to get permission from Income Tax Department for purchasing the property. Thereafter, the defendant filed Writ Petition No. 669 of 1993, which was allowed on 20.09.1994 and order dated 24.03.1993 of Income Tax Department was quashed. It is further alleged that after decision of the aforesaid writ petition, the defendant neither informed the plaintiff about clearance certificate from Income Tax Department and no objection certificate etc., nor he executed transfer deed in favour of the plaintiff, due to which the plaintiff got a notice served on the defendant on 24.01.1995, but inspite of that notice, the defendant did not execute the transfer deed of the disputed property in favour of the plaintiff in terms of the agreement to sell dated 22.01.1993, whereas the plaintiff was always ready and willing to get the transfer deed executed after making payment of the balance sale consideration. Hence this suit.
3. The defendant filed written statement in which he admitted that Rs. 7,00,000/- (Rupees Seven lac) were paid to him as earnest money. Execution of the agreement to sell dated 22.01.1993 has also not been denied by the defendant in his written statement, but the suit has been contested by him with the averments that there was no completed, final, legal and binding agreement to sell between the parties and the said agreement cannot be received as evidence of the alleged contract. It is further averred that the agreement to sell, the specific performance of which is being sought, is unregistered document, though as per the provisions of section 54 of Transfer of Property Act, as amended in the State of Uttar Pradesh, any agreement to sell regarding immovable property can be effected only through registered document and hence the alleged agreement being unregistered is illegal and unenforceable and the plaintiff is not entitled to get any relief in the suit, which is also barred by section 16 of Specific Relief Act, as the plaintiff was not ready and willing to get the sale deed executed after the order passed by the Income Tax Department for acquisition of the disputed property. It is further alleged that according to the plaintiff himself, the transaction was to be finalized by 2nd April 1993 and due to acquisition of the disputed plot by the central government, the alleged agreement stood terminated and came to an end, because it is specifically mentioned in the said document that if an order is passed by the government to purchase the property, the agreement would come to an end and earnest money shall be refunded. The plaintiff after April 1993 was not interested to purchase the plot and his attorney Sri Ashok Behari Saxena in April 1993 had expressed his desire to receive back the earnest money. The plaintiff or any one on his behalf after the beginning of April 1993 did not ask the defendant to execute the sale deed or return the earnest money. The plaintiff had no arrangement of money to pay the balance sale consideration and he never contacted the defendant after February 1993 to get the sale deed executed and registered in his favour. The plaintiff as NRI is living in U.K. since March 1993 and is not interested to purchase the plot. It is also averred that since there was no legal and binding agreement to sell between the parties, the defendant after the order dated 20.09.1994 passed by this Court in Writ Petition No. 669 of 1993, did not apply to get Income Tax clearance and no objection certificate from the concerned departments and he had sent a letter on 30.03.1993 to the plaintiff asking him to collect the cheque for Rs. 7,00,000/- (Rupees Seven lac). In the alternative and without prejudice to the aforesaid averments it is further averred by the defendant that the agreement in question had come to an end in March 1993 when permission was not granted by the Income Tax Department and plaintiff had sought to receive back the amount paid by him and had rescinded the agreement, due to which the defendant is not under any legal obligation to execute the sale deed with respect to the disputed plot.
4. The court below framed necessary issues. The plaintiff in order to prove his case, examined his attorney Ashok Behari Saxena as P.W.1. In addition, Sunil Chopra, who is the marginal witness of the agreement to sell dated 22.01.1993, has been examined as P.W.2. In rebuttal, the defendant examined himself as D.W.1. Alleged agreement to sell (paper no. 18A) and other papers have been filed by the parties. After taking entire evidence into consideration, the court below vide impugned judgment decreed the suit as mentioned in para 1 above. Hence this appeal.
5. We have heard Sri S.N. Verma, learned senior counsel assisted by Sri Sarad Malviya and Sri Yashwant Verma Advocates, appearing for the appellant and Sri T.P. Singh learned senior counsel assisted by Sri Sidharth Singh for the respondent and perused the entire record carefully.
POINTs OF DETERMINATION
1. Whether the suit for mandatory injunction for direction to get the agreement to sell dated 22.01.1993 registered is maintainable.
2. Whether the agreement to sell dated 22.01.1993 being unregistered document is not legally enforceable and decree for specific performance of contract cannot be passed.
3. Whether comprehensive suit to get the agreement to sell dated 22.01.1993 registered and then its specific performance to get the sale deed executed and registered is legally maintainable.
FINDINGS
POINT NO. 1.
6. Although in the plaint, neither the foundation to get the agreement to sell dated 22.01.1993 registered is made out, nor the cause of action for such relief has been disclosed, the court below has passed the decree for mandatory injunction directing the defendant to get the said agreement registered first and then to execute the sale deed in favour of the plaintiff. Drawing our attention towards the following rulings, it was submitted by learned counsel for the plaintiff-respondent that civil court under section 9 of the Code of Civil Procedure has jurisdiction to grant the relief of mandatory injunction directing the defendant to get the agreement registered. The rulings cited by learned counsel for the plaintiff-respondent are as under:-
(i) Dhulabhai etc., vs. State of Madhya Pradesh and another, AIR 1969 SC 78.
(ii) Sahebgouda (dead) by L.Rs. & others vs. Ogeppa & others, AIR 2003 SC 2743.
(iii) Ram Swarup & others vs. Shikar Chand & another, AIR 1966 SC 893.
(iv) Sankaranarayanan Potti vs. K. Sreedevi & others (1998) 3 SCC 751.
(v) Shiv Kumar Chadha vs. Municipal Corporation of Delhi (1993) 3 SCC 161.

7. On the contrary, it was submitted by learned counsel for the defendant-appellant that the decree passed by the court below for mandatory injunction directing the defendant to get the agreement in question registered and then its specific performance is not in accordance with law, because no such decree could be passed in this case. The contention of the learned counsel for the appellant was that the plaintiff never asked the defendant to get the agreement to sell dated 22.01.1993 registered and remedy available under Registration Act to get the alleged agreement registered was not availed by the plaintiff before filing the suit and hence the suit for the relief of mandatory injunction to get the said agreement registered is not legally maintainable in this case.
8. Having given our thoughtful consideration to the rival submissions made by the parties counsel and after going through the record of the suit, we fully agree with the submission of the learned counsel for the appellant-defendant that decree for mandatory injunction directing the defendant to get the agreement in question registered and its specific performance could not be passed in this case, because the plaintiff did not avail the remedy provided under Registration Act for getting a document registered. The agreement dated 22.01.1993 is unregistered document. The learned court below has passed a decree for mandatory injunction directing the defendant to get the said agreement registered before the registering authority within one month and then to execute the sale deed in favour of the plaintiff in terms of that agreement. In our view, such direction could not be issued in the present suit. Section 23 of the Registration Act lays down that "no document other than a will shall be accepted for registration unless presented for that purpose to the proper officer within four months from the date of its execution". Section 25 provides that If, owing to urgent necessity or unavoidable accident, any document executed, is not presented for registration till after the expiration of the time prescribed under sections 23 and 24, the Registrar, in cases where the delay in presentation does not exceed four months, may direct that on payment of a fine not exceeding ten times the amount of the proper registration-fee, such document shall be accepted for registration. Section 71 lays down that every Sub-Registrar who refuses to register a document shall make an order of refusal and record his reasons. Section 72 provides an appeal to the Registrar against the order of Sub-Registrar, where refusal is made on the ground of denial of execution. Section 77 provides that where the Registrar refuses to order the document to be registered, under section 72 or a decree under section 76, any person claiming under such document, or his representative, assign or agent, may, within thirty days after the making of the order of refusal, institute in a Civil Court, a suit for a decree directing the document to be registered. These provisions show that a suit for a decree directing for registration of the document can be instituted after recourse has been taken to the provisions of sections 71 and 72 of the Act.
9. We have carefully gone through the rulings produced by the learned counsel for the plaintiff-respondent. It is nowhere held in any ruling that if a person has not availed the remedy provided in the Registration Act for getting a document registered, suit for mandatory injunction for a direction to get the document registered can be filed. The Full Bench consisting of 5 Hon'ble Judges has held in the case of Bhagwan Singh and another vs. Khuda Bakhsh & another 1881 (III) ILR 397 that suit for claiming a decree directing the registration of document without having recourse to the provisions of section 73 of Registration Act is not maintainable. It is specifically held by the Full Bench that moving the application under section 73 of Registration Act is condition precedent for institution of such suit.
10. Admittedly the plaintiff never asked the defendant to get the agreement dated 22.01.1993 registered. Although a notice was got served on the defendant by the plaintiff on 24.01.1995, but in that notice also, the defendant was not required to get the said agreement registered. The said agreement was never presented by the plaintiff before Sub-Registrar concerned for getting the same registered and no notice was issued by the Sub-Registrar to the defendant to come to his office for the purpose of registration of the agreement to sell dated 22.01.1993. Therefore, having regard to the aforesaid mandatory provisions of the Registration Act, in our considered view, the suit for mandatory injunction for direction to the defendant to get the agreement in question registered is not legally maintainable and hence the decree passed in this regard by the court below is not in accordance with law. This point is therefore, decided accordingly in favour of the defendant-appellant.
POINT NO. 2.
11. Execution of the agreement to sell dated 22.01.1993 is not disputed in this case. This agreement is admittedly an unregistered document. Sub section (1) of Section 17 of the Registration Act enumerates those categories of documents of which registration is compulsory. Clause (v) of sub section (2) of section 17, after its amendment by U.P. Act no. 57 of 1976, which came into force on 01.01.1977, reads as follows:
17(2) Nothing in clauses (b) and (c ) of sub-section (1) applies to-
(i)......................
(ii).....................
(iii).....................
(iv)......................
(v) any document, other than contract for sale, not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest to or in immovable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest; or

12. In view of the aforesaid provision, the contract for sale of immovable property in Uttar Pradesh has to be a registered document. Section 49 of the Registration Act, as applicable in Uttar Pradesh after its amendment by U.P. Act No. 57 of 1976, provides that no document required by section 17 or by any provision of the Transfer of Property Act, 1882 or of any other law for the time being in force, to be registered shall affect any immovable property comprised therein, or be received as evidence of any transaction affecting such property or conferring such power or creating such right or relationship, unless it has been registered. In view of this provision, an unregistered agreement to sell of immovable property is inadmissible in evidence. Therefore, the agreement dated 22.01.1993, being an unregistered document, is inadmissible in evidence and it could be taken into consideration for passing a decree for its specific performance in favour of the plaintiff. This Court in the case of Surendra Kumar Vs. Amarjeet Singh & others AIR 2004 Allahabad 335 has held that unregistered document of contract for sell in respect of immovable property cannot be enforced under Specific Relief Act. Therefore, in our view the decree of specific performance of the agreement to sell dated 22.01.1993 passed by court below is wholly illegal and cannot be sustained.
13. Although in the pleadings, it is no where stated that the agreement dated 22.01.1993 was executed merely for the purpose of getting permission from Income Tax Authorities, but in oral evidence the witnesses of both the parties have stated that the agreement dated 22.01.1993 was executed merely for getting permission from Income Tax Department and thereafter second registered agreement was to be executed. Admittedly, Income Tax Authorities did not grant requisite permission and no other agreement was executed between the parties except the agreement dated 22.01.1993, which is unregistered document. Therefore, in our view, on this ground also, decree for specific performance on the basis of agreement to sell dated 22.01.1993 could not be passed by the court below. The plaintiff has not sought any relief in the suit for mandatory injunction directing the defendant to execute the second agreement and get it registered. The relief of specific performance of contract has been sought in respect of agreement to sell dated 22.01.1993 and no prayer has been made in the plaint that the defendant be directed to execute the fresh registered agreement to transfer the disputed plot in favour of the plaintiff in pursuance of alleged oral agreement. Therefore, on this ground also, the decree for specific performance of the contract on the basis of agreement to sell dated 22.01.1993 cannot be sustained, because according to the oral evidence led by the plaintiff-respondent, the said agreement was not meant for specific performance and it was executed merely for obtaining requisite permission from Income Tax Department.
14. Drawing our attention towards V.B. Dharmyat vs. Shree Jagadguru Tontadrya & others (1999) 6 Supreme Court Cases 15 and Maneklal Mansukhdhai vs. Hormusji Jamshedji Ginwala & sons AIR (37) 1950 Supreme Court 1, it was submitted by learned counsel for the plaintiff-respondent that in instant case, the defendant was required to execute lease deed in pursuance of the agreement dated 22.01.1993 and since the agreement to execute the lease deed does not require registration under section 17 of the Registration Act or any other law for the time being in force, hence the agreement in question is legally enforceable and the decree passed by the court below for its specific performance does not suffer from any illegality and interference by this Court in the said decree is not warranted. We are not at all impressed with this argument. The agreement to sell dated 22.01.1993 (paper No. 18A) shows that the seller Vijay Kumar Sharma (defendant-appellant) was required to execute transfer deed in favour of the purchaser Devesh Behari Saxena (Plaintiff-respondent) after receiving balance sale consideration of Rs. 13,21,000/-. Through this document, the plaintiff-respondent had purchased plot No. 133, situate in Block-A, Sector-15, NOIDA for Rs. 20,21,000/- and Rs. 7,00,000/- were paid as earnest money on 22.01.1993. According to clause (7) of this agreement, transfer deed was to be executed in favour of the purchaser by 02.04.1993. There is nothing in this agreement to show that the plot in question was taken on lease by the plaintiff. The transfer of the plot in question for consideration of Rs. 20,21,000/- was out right sale and it was not a lease. "The Sale", according to section 54 of the Transfer of Property Act, is a transfer of ownership in exchange for a price paid or promised or part paid and part-promised. According to section 105 of this Act, " lease" of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. There is vast difference in sale and lease. The ownership of the property is transferred in the sale, whereas the right to enjoy such property is only transferred in a lease. There is no transfer of ownership of the property in lease. In instant case, the parties have described themselves as seller and purchaser in the agreement to sell dated 22.01.1993 (paper No. 18A) and ownership of plot No. 133 was transferred by the defendant for a sale consideration of Rs. 20,21,000/-. It is not the case of plaintiff in plaint that he had taken plot No. 133 on lease. There is specific averment in the plaint that the defendant had agreed to sell his plot No. 133 for consideration of Rs. 20,21,000/- and an agreement to sell for that purpose was executed between the parties on 22.01.1993. Therefore, having regard to the recitals made in the agreement to sell dated 22.01.1993 (paper No. 18A) and averments made in the plaint, there is no scope to contend that the disputed plot was taken on lease by the plaintiff. As such, both the rulings cited by the learned counsel for the plaintiff-respondent are not applicable in this case and on the basis of the observations made in these rulings, the impugned decree of specific performance of the agreement to sell dated 22.01.1993 can not be sustained. Hence the point No. 2 also is decided accordingly in favour of the appellant-defendant and against respondent-plaintiff.
POINT NO. 3.
15. Placing reliance on the case of Kalavakurti Venkata Subbaiah vs. Bala Gurappagari Guruvireddy (1999)7 SCC 114, it was submitted by learned counsel for the plaintiff-respondent that comprehensive suit for specific performance of the agreement to sell dated 22.01.1993 and for delivery of possession coupled with mandatory injunction for direction to get the said agreement registered is legally maintainable. We have carefully gone through this ruling. In our view, this ruling does not render any assistance to the plaintiff-respondent, because in that case sale deed was executed, but the vender had refused to appear before the Sub Registrar for the purpose of its registration, whereas in instant case, the defendant was never asked by the plaintiff to get the agreement to sell dated 22.01.1993 registered. It is not the case of plaintiff that he had asked the defendant to get the agreement to sell dated 22.01.1993 registered and he had refused to appear before Sub Registrar concerned for getting the said agreement registered. In Uttar Pradesh, agreement to sell requires registration after amendment of section 17 of the Registration Act by Amending Act No. 57 of 1976. No effort was ever made by the plaintiff to avail the remedy provided in the Registration Act to get the said agreement registered. According to the witnesses, which have been examined by the plaintiff in court below, the agreement dated 22.01.1993 was executed merely for the purpose of obtaining requisite permission from Income Tax authorities and thereafter, second agreement was to be executed and registered for transfer of the disputed plot in favour of the plaintiff. Having regard to all these facts, in our considered view, the comprehensive suit instituted by the plaintiff for mandatory injunction for directing the defendant to get the agreement to sell dated 22.01.1993 registered first and thereafter, to execute the registered sale deed in favour of plaintiff is not legally maintainable, because as stated earlier also, the agreement to sell dated 22.01.1993 being unregistered document is not admissible in evidence and this agreement does not confer any right on the plaintiff to institute the suit for specific performance of the contract for transfer of disputed property. This point also is, therefore, decided against the plaintiff-respondent.
16. In view of our findings mentioned herein-above, the impugned decree for mandatory injunction directing the defendant to get the agreement to sell dated 22.01.1993 registered and, thereafter, its specific performance for getting the sale deed executed and registered as well as delivery of possession cannot be sustained. The court below has held in the impugned decree that if due to pendency of appeal in Hon'ble Supreme Court or non availability of no objection certificate from the competent authority, specific performance of the said agreement become impossible, then the plaintiff would be entitled to get back his earnest money of Rs. 7,00,000/- with interest @ 18% per annum from 22.01.1993 to 14,04,1995 and thereafter @ 6% per annum from 15.04.1995. Due to legal lacuna in the agreement to sell, the plaintiff-respondent is being deprived to get valuable property in NOIDA. Hence, the plaintiff is entitled to get interest on his earnest money, which should be refunded to him. The interest @ 18% per annum is on higher side, whereas the interest @ 6% per annum is on lower side. The ends of justice would meet, if interest @ 12% per annum from 22.01.1993 till recovery is granted to the plaintiff on his earnest money. Although in alternative, the plaintiff has claimed Rs. 13,21,000/- as damages in addition to the relief of refund of his earnest money of Rs. 7,00,000/- , but in our view, the plaintiff is not entitled to recover damages from the defendant, because he (plaintiff) has not suffered any loss due to any act or omission on the part of defendant.
ORDER
The appeal is partly allowed. Impugned judgment and decree so far as they relate to the mandatory injunction for directing the defendant to get the agreement to sell dated 22.01.1993 registered and thereafter its specific performance are hereby set aside.
P.T.O.


The suit is decreed for refund of earnest money of Rs. 7,00,000/- (Rupees seven lac only) with interest @ 12% per annum from 22.01.1993 till recovery.
The parties are directed to bear their own costs through out.
Office to return lower court record along with a copy of this judgment expeditiously.
Dated: 16th November 2007.
v.k. updh.




Tags :- unregistered agreement sell specifically enfor




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vijays

vijays

Wrote on 19 April 2012

very good













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