Registration act
Rajesh
(Querist) 08 May 2012
This query is : Resolved
An agreement to sell signed on dated 8.6.2004 of agricultural land 80 kanals situated in Punjab , where Seller received half of sales consideration amount as earnest money from the Buyer and gave possession of land on spot as per terms of agreement . The Agreement was not registered. Buyer failed to execute the registration of sale deed on fixed date . Seller rescinded the agreement through legal notice . Buyer ( Plaintiff ) filed suit for specific performance against Seller. Buyer in his plaint admitted taking of possession of suit property. Seller in his replication accepted the agreement also.
In view of the above facts,
Can Defendant ( Seller) take a plea that Since possession of suit property was given on spot as per agreement to sell , thereby necessary to get it registered under Sec 17 (1A) of Registration Act ( as amended in 2001) . Such agreement if not registered cannot be admitted and relied upon in evidence by the Plaintiff ( Buyer)to grant specific performance of the same to him. ? Pl advice and suggest relevant Authorities .
ajay sethi
(Expert) 08 May 2012
both parties have admitted that agreement was entered into .admitteldy 50%of consideration was paid to seller and he has given posession to buyer . since agreement was terminated by seller buyer has filed suit for specific performance .
although agreement not registered it can be relied upon in evidence as the intentio of parties was to have sale deed executed later stage . terms of agreement for sale has to be gone into . since sale deed was not executed hence suit for specific performance has been filed
in anyc ase it is admissble for collateral purposes of proving nature of posession of buyer
ajay sethi
(Expert) 08 May 2012
A reference may be made in this regard to the relevant provisions of Section 17 of the Registration Act, 1908 as amended by Indian Registration (Amendment) Act (No. III) of 1927; the explanation to which is in the following term:
Explanation-A document purporting or operating to effect a contract for the sale of immovable property shall not be deemed to require or ever to have required registration by reason only of the fact that such document contains a recital of the payment of any earnest money or of the whole or any part of the purchase-money.
6. Sub-Section (v) of Sub-section (2) of Section 17 provides, thus:
any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in 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.
Adv.R.P.Chugh
(Expert) 08 May 2012
Dear Mr.Rajesh,
On available facts I have the following to opine :-
1. Agreement to Sell are documents that do not create any interest by themselves but merely give a right to obtain another document. Hence are not compulsorily registrable.
2. S.17(1A) which was added in 2001 - has made registration of agreement to sell compulsory only for the purpose of the doctrine of part performance i.e possession can be retained on basis of Registered Agreement to Sell only.
3. The above in no way affects S.49 Proviso which categorically provides that unregistered doc can be used for purpose of specific performance.
4. In light of above, the seller cannot resist suit on ground of non registration however can resist it on account of having rescinded it - as time was of essence and on failure of one party to fulfill oblgiation by stipulated time gives right to the other to avoid the contract.
5. Furthermore also argue that apart from default of buyer, now the estate value has appreciated considerably rendering SP inequitable - SP being an equitable relief cannot be granted when it is not fair in the circumstances or gives one party undue advantage, or undue hardship to another.
Feel free to talk !
Good Luck !
Advocate Bharat
Rajesh
(Querist) 08 May 2012
Dear Mr Sethi & Mr Chugh,
Thanks for your expeditious response and valuable insight provided through respective arguments. I being seller , wants to use this as one of plea based on the Gurbachan Singh V/s Raghubir Singh( P&H) 2010(3)731 : 2010AIR(Punjab) 77 : 2010(5) r.cr.(Civil) 737 , in which Hon,ble Single Bench held that " In the present case, since the agreement to sell is unregistered, therefore, in view of Section 49 of the Act of 1908 such an agreement would not be received as an evidence of any transaction affecting the property in question. Thus, the substantial question that has been raised by the learned counsel for the appellant is answered in his favour in affirmative and it is held that the agreement to sell being unregistered does not confer any right or title upon the plaintiff as the same cannot be received in evidence in view of Sections 17 (1A) and 49 of the Act of 1908."
Only difference with above quoted Case law with that of mine is only one that in above case Seller didn't admitted agreement to sell , whereas in my case , I being seller admits signing of agreement to sell.
In view of above , Please suggest me Whether as Seller ( defendant) , Can I take benefit of the line of argument taken in above authority .? Also , Can you help me to get similar authorities of SC or other HCourts in order to present my arguments on above line more effectively.
ajay sethi
(Expert) 08 May 2012
visit indian kanoon website for judgements . to my mind it is admissible in evidence intention of parties was to execute sale deed at later stage .
what is important is the wording s of agreement for sale .
Rajesh
(Querist) 09 May 2012
Dear Mr Sethi ,
Thanks for your valuable insight on the issue. Regarding , terms of agreement , it mentions/states the following
(a) Rs 15 lakh is the total sale value of the property under sale and half this Rs 7.5 lakh is being as earnest money to the Seller. Balance amount will be given on the date of execution of registration of land.
(b) Possession of property is given to Buyer and ownership possession will be given on date of Registration.
(c) From today, Buyer will be entitled to cultivate the land and seller will not have any right over any produce obtained thereon.
(d)Before registration, Seller will provide copy of jamabandi to Buyer and in case of any deficiency , Seller will get it rectify .
(e)In case of any default of any terms of agreement by Seller, the Buyer shall have right to get decree from court or get the double the amount of earnest money given to seller. Seller will be fully responsible for any loss caused thereof.
(f) In case of default by Buyer, Seller will be entitled to forfeit the earnest money given by Seller.
In addition , On the date of Registration , When Buyer stated that he had not arranged balance sale consideration , I got my attendance with Registrar in the afternoon . But , this fact , came to the knowledge of Buyer through his friends in court and he also got marked his attendance with REgistrar at the fag end of Day . After that , I served Buyer notice and forfeit the amount. The fact about his marking of attendance with Registrar at the fag end of day , I came to know only when he filed suit for possession by way of Specific Performance . Buyer is to prove his readiness & willingness and as per facts available with me , he was not having huge bank balance and also not taken any constructive step for execution of registration like purchase of stamp papers, Drafts of balance sale consideration etc.
In view of the above TOA and additional facts , please suggest/ guide, how I can use Sec53(A)of TPA read with Sec 17(1A) & Sec 49 of Registration Act .?
Anirudh
(Expert) 09 May 2012
My understanding of the law on this issue is as under:
1. The buyer would not be in a position to successfully claim to retain his possession of the property, on the basis of the unregistered Agreement to Sell, in view of Section 17(1A) of the Registration Act.
2. However, the buyer would be able to lay a claim for specific performance of the agreement to sell (it is not required to be registered) and rely upon such an unregistered Agreement to Sell to press for his claim for specific performance.
3. It is for the defendant to show how (i) time was essence of the agreement to sell (ii) how within the time provided the buyer did not perform his part of the agreement.
4. If you say that now that the property value has gone up and therefore I cannot perform, then you will be in deep trouble.
5. You will not be able to take advantage of the unregistered nature of the agreement to sell, UNLESS the plaintiff claims his POSSESSION on the basis of the the said unregistered document.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 09 May 2012
This will be contested on facts and law.
You have support that the buyer was not ready to complete sale and hammer on this point alone . Collect all the evidence in its support.
Rajesh
(Querist) 09 May 2012
To clarify further, Buyer in his plaint is admitting clearly that possession of siut property was given "on spot" by the Seller.
Yes, to prove his( Buyer) financial incapacity during that period ( from the date of Agreement till Date of execution / Registration ), necessary evidence from his Bank accounts to prove his extremely low levels of cash in hand, Fixed assets , Fixed Deposits , Share & Debentures and his agricultural & other income etc are being collected through his last 5 years IT returns.
ajay sethi
(Expert) 09 May 2012
ultimately instead of fighting on techinalites what s important is whether on date of registration buyer offered to pay balance amount . if he had no funds in account it would indicate that he failed to fulfill his contractual obligations . he never addressed any letter expressiing his willingness to pay balance amount .you hvae to stress that time was essence of contract .
you have good case . fight on facts .
Shonee Kapoor
(Expert) 09 May 2012
I endorse the detailed solution provided by Ld. Sethi.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
Anirudh
(Expert) 10 May 2012
All that I am saying is that for the purpose of getting specific performance of an agreement to sell (unregistered agreement to sell) is maintainable.
So, the seller cannot depend on the 'unregistered agreement' as a defence to the suit.
As rightly pointed out by Mr. Sethi, he should fight on facts.
Rajesh
(Querist) 10 May 2012
Based on the advice given by esteemed experts above , I will fight the case on facts which are strong enough to prove effectively tht Buyer was not ready & willing ( since he doesn't have enough cash in hands or any liquid assets as per info obtained) that is why he wanted more time & which was refused and attendance with registrar was marked on fixed date of execution.
My objective through above querry was to get legal experts insight into the P&H high Court judgement mentioned in above Paras so that ---similarly I can make arguments in addition to "basic facts of case" that since suit filed by Buyer is for " Suit for possession by way of Specific Performance" on the basis of unregistered agreement to sell entered by me ( seller) in 2004. Moreover , the Hon'ble Judge has kept my objection to unregistered agreement open for taking it at argument stage. As per above Judgement, such agreement is void ab-intio and cannot be taken as evidence . Therefore , possession given to Buyer through such unregistered agreement will of no value & Buyer will hold such property as trustee and have to return the possession. Whereas , Specific performance against me ( Seller) will stand on the basis of un registered agreement. For this, I ( if you also agree) will like to make argument that I am ready to return advance money without interest ( since interest amount will get set-off against income earned from that agricultural land by the Buyer over these years). In other words, I as seller enjoyed interest obtained on Advance taken and Buyer had enjoyed income from agricultural land from which he enjoyed income by selling produce cultivated .
In addition , as stated above, other facts will also be contested to prove his un willingness / readiness & time was essence as suggested by all of you.
Will my additional line of arguments hold / acceptable to cut down Buyer 's basis of suit for possession on unregistered agreement,?
DEFENSE ADVOCATE.-firmaction@g
(Expert) 10 May 2012
If the possession is with the alleged buyer than as ANIRUDH says even un registered document has relevance for specific performance.
Still you can contest on your view points and can give run for the money of the opponent.
If possession is not given than the case will go on and on......at various levels till one of them gets exhausted.
Rajesh
(Querist) 10 May 2012
I will request you all , to see the Gurbachan Singh V/s Raghubir Singh( P&H) 2010(3)731 : 2010AIR(Punjab) 77 : 2010(5) r.cr.(Civil) 737 , in which Hon,ble Single Bench held that such un registered agreement is void ab-intio & cannot taken as evidence ( Sec 53 A of TP Act read with Sec 17(1A) & sEC 49 OF Registration Act.) . The Court accepted the plea of Seller and declined to decree Specific Performance in favour of Buyer & told Seller to pay back advance money with interest ( as offered to do so by him in argument stage)
Because of above , I thought to seek views of esteemed legal experts to refine/ prepare my arguments, since my facts of case are absolutely same except that in my case agreement is admitted by both parties, whereas in Case listed above , Seller didn't admit agreement.
