Dayal Singh vs Indar Singh

Viscount Dunedin, J.

On the 2nd March, 1919, Dayal Singh the defendant-appellant executed an agreement with Indar Singh, now deceased, but repre sented by the plaintiff-respondent. This agreement had for its ''object the under taking of a sale of certain property, and its terms, so far as material, are as follows :- "I, Dayal Singh, son of Jiwan Singh, caste Jat Garewal, resident and Lambardar of Chak No. 1157, Upper Chenab, Tahsil Jaranwala, Dis trict Lyallpur, do here declare as follows :-

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(here follows a description of the subject)

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I have agreed to sell the above-mentioned property for Rs. 10,000 and the sum of interest to be paid to the Government to Indar Singh, son of Hira Singh, Havildar, caste Jat Dhami, occupation cultivation, abadkar and resident of Chak No. 188, Rakh Branch, Tahsil Lyallpur, who has agreed to purchase this land merely for the sake of Lambardarship. Out of the sale money I have at present received 1,000 by way of earnest money. Rs. 9,000 is agreed to be received before the Sub-Registrar, Lyallpur at the time of the completion of the sale and registration. The expenses, incurred in con nexion with the execution and completion of the sale-deed, shall be borne by the vendee and my self in equal halves. I shall complete the sale in favour of the vendee within forty days, i. e., be fore the 1st Baisakh Sambat 1976, after making a settlement of the sum of interest (which shall be deposited by the vendee) with the Govern ment. The vendee has been put in possession of the land sold. If I do not complete the sale, I shall pay Rs. 2,000 by way of damages to the vendee without any demur, and, besides, he shall be at liberty to have the sale completed by seeking legal remedy. As regards the filing of the interest, an application shall be made to the Deputy Commissioner of Lyallpur, and, on per mission being granted, the vendee shall be made to deposit the said interest. If permission is not accorded the bargain of sale shall remain un affected. The only agreement would then be that the sale would be completed after the interest was deposited. The land has, at any rate, been sold and the vendee has become entit led to it. I am simply entitled to receive Rs. 9,000. I have therefore executed this agree ment in favour of Indar Singh, vendee, so that it may serve as an authority. I have secured an agreement to the same effect from Indar Singh, vendee.

This document was not registered, The appellant having refused to complete the purchase, the respondent succeeding to all rights of Indar Singh, deceased, raised this action for specific performance. The appellant pleaded that the document in question being a document which needed to be registered, and not having been registered, could not be received in evi dence in terms of S. 49 of Act 16 of 1908. He also pleaded that in respect of undue influence exercised at the time of the making of the agreement, specific perfor mance should be refused. The trial Judge held that the document did not require to be registered, but held that undue influence had been proved. On appeal the appeal Court agreed with the trial Judge that the document did not require to be registered, but disagreed as to the other matter. They therefore decreed specific performance.

The sole question in this appeal, which is ex parte, is, therefore, whether the document in question required to be registered. As the question is an impor tant one, it will be well to trace the history of the legislation which bears on the point. Act XX of 1866, S. 17, made compulsorily registrable certain instru ments :-

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- (2) Instruments (other than an instru ment of gift) which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest whether vested or contingent, of the value of one hundred rupees and upwards to or in im movable property.

(3) "Instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment limitation or extinction of any such right, title or interest.

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And, by S. 49, declared that no instru ment required by S. 17 to be registered should be received in evidence in any civil proceeding in any Court unless it had been registered. The result of that enactment may be appre ciated by a perusal of the case of Futteh Chund Sahoo v. Leelumber Singh Doss 1871 14 M. I. A. 129 : 16 W. R. 26 : 9 B. L. R. 433 : 2 Suther 467 : 2 Sar. 709 (P.C.) where the Board characterized the case as a very hard one, but found that the terms of the Act were impera tive. In 1877 (probably in accordance with the feeling as expressed above) in a new Act, S. 17 was repeated as before, but with this addition :

Nothing in Clauses (b) and (c) of this section applies to

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(h) any document not itself creating, declar ing, 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.

This change having been made, there came to be raised questions as to various agreements ; first as to whether they fell under S. 17 (b), and, accordingly, if they did so, whether they could be excused in respect of S. 17 (h). Examples of such cases may be found in Burjorji Cursetji Panihaki v. Muncherji Kuverji 1880 5 Bom. 143 where it was held that the agreement was not necessarily registrable, and Ramasami v. Ramasami I. L. R. 5 Mad., 115, where the agreement was held to be compul sorily registrable, and consequently not admissible in evidence. Their Lordships do not think it necessary to review these cases or to decide whether one of them will agree with what was said by Lord Buckmaster in Rani Hemanta Kumari Debi v. Midnapur Zamindari Company Limited 1920 47 Cal. 485 : 53 I. C. 534 : 46 I. A. 240 (P. C.). They will assume without deciding that taking the terms of Act of 1877 (alone the terms of which were re peated totidem verbis, though not with the same numbering of the paragraphs, in the Act of 1908, which is the Act which rules this case) the judgment of the Courts below were right in holding that the present agreement was an agreement to sell and not a sale, and was conse quently exempted under S. 17 (2) (v.), which corresponds with S. 17 (h) of 1877. But there is another Act to be reckoned with which unfortunately en tirely escaped the notice of the Courts below, as they say nothing about it ; that is the Transfer of Property Act, 1882 (Act 4 of 1882) (passed, it will be ob served, after the case of Panthaki (supra), which was in 1880). By S. 55 (b) the buyer is entitled :

Unless he has improperly declined to accept delivery of the property, as against the seller and all persons claiming under him with notice of the payment, to the extent of the seller''s interest in the property, for the amount of any purchase money properly paid by the buyer in anticipa tion of the delivery, and for interest on such amount ; and when he properly declines to ac cept the delivery, also for the earnest (if any) and for the costs, if any, awarded to him of a suit to compel specific performance of the con tract or to obtain a decree for its rescission.

Their Lordships are of opinion that the section applied to the agreement in this case, where the buyer had paid earnest money, and so, far from refusing to accept delivery, was pressing for specific performance, and that the agree ment did in itself create an interest and therefore did not allow of the applica tion of S.17 (2) (v).It was therefore, com pulsorily registrable under S. 17 and, not having been registered, was inadmis sible in evidence under S. 49.

Their Lordships will, therefore, humbly advise His Majesty to allow the appeal and to dismiss the suit. The appellant will have his costs before this Board ; but the costs in the Courts will remain as ordered by the High Court.