Rajagopal and Another vs Kaliaperumal

M. Chockalingam, J.—This second appeal has arisen from the judgment and decree of the learned District Judge, Cuddalore made in

A.S.No. 55 of 1987, dated 15.12.1988 modifying the judgment and decree of the Sub-Court, Villupuram in O.S.No. 144 of 1985, dated

23.1.1987.

The respondent/plaintiff filed a suit for declaration of his title in respect of the suit properties along with delivery of possession and mesne profits

with the following averments.

The suit properties originally belonged to the family of defendants herein. The 1st defendant, who was managing the affairs of the family, on

26.6.1983 for himself and as guardian for his minor children along with the 2nd defendant sold the properties to plaintiff for a valid consideration of

Rs. 43,000 by means of registered deed. Out of the sales consideration, a sum of Rs. 3,000 went in discharge of the mortgage executed by the

defendants in favour of the plaintiff and the balance of Rs. 40,000 would be paid before the Sub Registrar at the time of the registration of the

document. The defendants even before the document could be presented for registration wanted the plaintiff to pay a sum of Rs. 25000 as the

defendants have purchased a lorry and amount would have to be paid to the owner of the lorry and they agreed that the plaintiff could pay the

balance amount of Rs. 15,000 at the time of registration of the sale deed. The plaintiff has no other alternative but to pay the wanted amount of Rs.

25000 and he had paid the amount in the presence of one Balakrishnan, who is also a pangali of the defendants. The plaintiff could not get an

endorsement of payment of Rs. 25,000 in the sale deed as the scribe was from the suit village and the plaintiff had no idea that the defendants

would deny the said payment. The defendants have been invited by the plaintiff thereafter to present the document for registration, but the

defendants have been postponing the same with some ulterior motives. The plaintiff has no other alternative but to present the document for

compulsory registration before the Sub Registrar. The defendants appeared before the Sub Registrar and admitted the execution of the, document,

but refused to put their signature in the endorsement of the registration. The Sub-Registrar registered the document on 21,10.1983. Eversince the

date of the execution of the sale deed and from the date of the registration of the document, the plaintiff has been ready to tender the balance of

consideration. As a matter of fact, the plaintiff had offered these defendants to receive the balance consideration after deducting the amount of Rs.

25,000 which was paid on 21.7.1983, but the defendants did not care to receive the said amount. The plaintiff was ready to tender the said

amount whenever he is called upon to do so by this Hon''ble Court. The defendants have been in possession of the properties even after the sale.

Eventhough the recitals were to the effect that as if the possession of the properties have been handed over to the plaintiff the defendants continue

to be in possession of the properties and as such they were bound to pay the mesne profits from the date of the sale deed at the rate of Rs. 1,500

per annum. The defendants issued a registered notice through their lawyer calling upon the plaintiff to pay the balance consideration of Rs. 40,000

as if the defendants did not receive a sum of Rs. 25,000 on 21.7.1983 and the plaintiff had sent a reply to the defendant''s counsel thereby

tendering the amount of Rs. 15,000 being the balance consideration. The defendants neither received the amount nor surrendered possession of

the properties. The plaintiff again issued a registered notice on 19.1.1985 calling upon the defendants to receive the balance amount and to

surrender possession of the properties along with mesne profits. The defendants have been proclaiming in the village that they will never surrender

possession of the properties as the balance amount was not paid over to them and that the plaintiff himself had no title since the balance amount

was not paid. The defendants were bound to hand over possession of the properties having executed the sale deed and if at all they have any

grievance over the non-payment of the balance amount/they will have to seek appropriate remedy at the appropriate forum. Hence, the plaintiff

had no other alternative, but to file a suit for declaration of his title and for recovery of possession along with mesne profits.

The defendants/appellants resisted the suit alleging that it was true that the defendants originally agreed to sell the suit properties to the plaintiff

on condition of the payment of consideration of Rs. 43,000; that it was equally true that the sum of Rs. 3,000 is to be adjusted towards the

mortgage debt due to the plaintiff by the first defendant and the balance of Rs. 40,000 has to be paid at the time of registration of the sale deed;

that it was significant to see that a close reading of the sale deed would go to show that only after the payment of full consideration, the plaintiff

would be entitled to the properties; that it was false to allege that prior to registration a sum of Rs. 25,000 was paid to the defendants to purchase

a lorry; that no amount was paid at all towards the sale deed to the defendants; that a strange explanation was put forth on the part of the plaintiff in

stating that no endorsement could be got on the sale deed; that the plaintiff who had obtained the signatures of the defendants on the document

thought fit to have the document compulsorily without payment; that the plaintiff and his associates had materially altered the date of the document

to suit their convenience to present it for compulsory registration; that the first defendant having come to know this fact only long after the

registration, could not point out earlier; that the first defendant submits that being summoned by the Sub Registrar, they had rightly stated that they

were not paid the sale consideration and as such they were not prepared to have it registered; that it was false to state that the plaintiff ever offered

Rs. 15,000 at any point of time as there was no necessity for the same; that the plaintiff was not entitled to any mesne profits; that the plaintiff had

never acquired any title nor possession ; that the plaintiff was not entitled to either Rs. 3,000 or any amount; that it was made clear that only on

payment of full consideration by the plaintiff, the title to the properties in question should pass to him; that the consideration was not paid at the time

of execution or at any other time; that it was true that defendants had issued the notice stating that no consideration was paid; that if really the

plaintiff had paid the amounts, the plaintiff would have initiated the steps at the first instance; that there was no necessity to reply again for the notice

containing false allegations; that it was not correct to state that the possession should be delivered to the plaintiff; that there was no necessity to

delivery possession; that it was not legally correct to suggest that the defendants should seek remedy only to cover the amount; that it was

absolutely false to state that the defendants were estopped from denying the title, since no title passed; that the plaintiff was not entitled to claim title

or possession or any other relief; that it was always open to the defendants to show the real intention of the parties; that it could also be reasonably

gathered that the title to the properties did not pass on to the plaintiff; that there was no cause of action for the suit and hence, the suit has to be

dismissed with costs.

On the above pleadings, the trial court framed necessary issues, tried the suit and decree the same as prayed for. Aggrieved over the same, the

defendants preferred an appeal in A.S.No. 155 of 1987, wherein the lower appellate court modified the judgment of the trial court by granting

declaration of title to the plaintiff and the plaintiff was entitled to the possession of the property on payment of Rs. 40,000 to the defendants.

Aggrieved over the same, the defendants have preferred this second appeal.

At the time of admission, the following substantial questions of law were formulated for consideration of this second appeal:

Whether in law the lower appellate court has not erred in granting the relief of declaration after having found that the plaintiff has no intention to

pay the balance of the sale consideration?

Whether in law the Courts below have not overlooked the legal proposition that the question whether tide passes on mere execution and

registration of a deed or only on payment of consideration depends upon the intention of the parties to be gathered from the deed?

Whether in law the courts below are right in omitting to note that the sale deed has been materially altered?

This second appeal has arisen from the judgment of the lower appellate court modifying the judgment of the trial court, The respondent herein

filed a suit for declaration of his title and for recovery of possession with mesne profits. On contest by the appellants herein, the suit was decreed

by the trial court declaring the title of the respondent in the suit property along with recovery of possession with mesne profits. On appeal by the

defendant before the lower appellate court, the judgment of the trial court was modified stating that the respondent herein was entitled for

declaration of property, but the title of the property would pass on to the respondent only on depositing the balance of consideration and with a

direction to the appellant to handover the possession to the respondent on such payment. Aggrieved appellants have brought forth this second

appeal.

Learned counsel appearing for the appellants would urge that the judgment of the lower appellate court was not only erroneous in law, but also

perverse and unsustainable; that it has been found by the lower appellate court that the respondent had no intention to pay the balance of sale

consideration arid that the plaintiff was not justified in withholding the amount and hence, the lower appellate court should have non-suited the

respondent; that the respondent having rightly observed that the intention of the parties was of paramount importance and that the plaintiff had no

intention to pay the balance amount, the lower appellate court went wrong in allowing the appeal only partly; that there was consideration only for

a sum of Rs. 3,000 and having found so, the lower appellate court was in error in granting declaration of the title to the plaintiff; that the plaintiff

was not entitled to the relief of possession and mesne profits and hence, the suit should have been dismissed; that both the courts were in wrong in

holding that the sale deed was not materially altered; that the sale deed was executed on 6th and it was subsequently corrected as 26th to suit the

convenience of the respondent for presenting for registration after the expiry of the period; that the respondent has not come forward with clean

hands and that he was not entitled to any indulgence from the Court; that after having disbelieved the respondent''s version that he had paid Rs.

25,000 towards the sale consideration the lower courts should have taken judicial note of the plaintiffs conduct and non-suited him; that the

intention of the parties was that the purchaser should pay the entire sale consideration and the vendor should execute the sale deed and hand over

possession; that the respondent has not even whispered in his plaint about the payment of the balance of sale consideration; that the possession

was not handed over to the respondent after the registration of the sale deed; that the lower court erred in holding that the remedy open to the

defendant was to file a suit for recovery of the amount; that there was no acceptable evidence on the side of the respondent to grant him a relief

and thus, without proper consideration of the evidence oral and documentary, the trial court has granted a decree, which was subsequently

confirmed by the lower appellate court and under such circumstances, the judgment of the lower appellate court has got to be set aside and the suit

has got to be dismissed and the appeal has got to be allowed.

Vehemently opposing the contentions putforth by the appellants'' side, the learned counsel for the respondent would submit that the appellants

agreed to sell the suit mentioned immovable property under Ex.A.I, dated 26.6.1983, wherein the sale consideration was fixed at 43,000; that as

per the agreement between the parties, Rs. 3,000 was adjusted towards mortgage and it is true that the respondent undertook to pay Rs. 40,000

before the Sub Registrar; that it was the appellants, who compel the respondent to pay a sum of Rs. 23,000 to the third party stating that he

purchased a lorry from him and in that regard he was to pay and under such circumstances, the respondent was to part with sum of Rs. 25,000

and the balance of sale consideration as found in Ex.A.I that was payable by the respondent only Rs. 15,000; that since the appellants were

refusing to receive the amount, there arose a necessity for compulsory registration of the document; that even at the time there was a refusal on the

part of the appellants either to co-operate with the registration or to receive the balance of consideration, the respondent was all along ready to

pay the balance of consideration; that under such circumstances, there was no course open to the respondent than filing a suit for seeking a

declaration of his title along with recovery of possession; that the trial court after considering the evidence, oral and documentary, and after

elaborate discussion has arrived at a correct conclusion that the respondent/plaintiff was entitled to the suit property along with the recovery of

possession and mesne profits. But when the same was appealed against before the District Court, the learned District Judge has modified the said

judgment, wherein the title of the respondent/plaintiff was declared, but found that he could obtain possession only after depositing the balance of

consideration of Rs. 40,000 and accordingly, the respondent has deposited a sum of Rs. 40,000 before the Court and as per the direction of the

lower appellate court, the appellants, instead of delivering the possession of the property, have come forward with the second appeal with a plea

that he should give liberty to withdraw the money, to which the respondent has no objection; that after due execution and registration of the sale

deed, the appellant neither can dispute the title of the respondent, since the title has already passed through nor they can deny the delivery of

possession and even as per the decision cited by the appellants'' side, the title would pass through when the balance of consideration was paid and

hence, under such circumstances of the case, there are no merits in the appeal and the appeal has got to be dismissed.

As seen above, the respondent herein filed a suit for declaration of his title in respect of the suit property along with a direction to the appellants/

defendants to surrender possession of the same and to pay mesne profits. Concededly, the immovable properties belonged to the family of the

appellants and the first defendant, who was managing the affairs of the family, for himself and as guardian for his minor children along with other

defendant, executed a sale deed tender Ex.A.I, wherein the consideration of the sale was found at Rs. 43,000; that out of the said sale

consideration, a sum of Rs. 3,000 was to be adjusted towards the discharge of the mortgage executed by the appellants in favour of the

respondent; that balance of Rs. 40,000 was payable before the Sub Registrar at the time of registration of the document; that there were exchange

of notices; that the respondent presented the document before the Sub-Registrar, Villupuram for compulsory registration; that when the appellants

were summoned, they admitted the execution of the same, but, refused to put the signature in the endorsement of the registration; that the Sub-

Registrar was making necessary endorsement therefore and registered the document on 21.10.1983; that the appellants never parted with the

possession to the respondent, but continued to be in possession. Under the stated circumstances, the respondent filed a suit for declaration of his

title and recovery of possession with mesne profits. With the short notice of the admitted facts as above, the area of controversy between the

parties is that whether the execution and registration of Ex.A.I, sale deed has passed on title to the respondent/plaintiff? Agreeing with the

contention of the plaintiff/respondent, the trial court decreed the suit declaring the title of the respondent to the suit property for recovery of

possession and past mesne profits at the rate of Rs. 2,000. While doing do, the trial court has observed that the only remedy open to the

defendants, if there was any balance of sale consideration, was to file a separate suit for recovery of balance, but they could not deny the title of

the plaintiff and also refused to handover the possession of the property. When an appeal was preferred by the appellants against the said

judgment, the appellate Judge confirmed the finding that the plaintiff was entitled to the suit property, but he could obtain the possession by

depositing into the Court the balance of sale consideration, namely Rs. 40,000 within six months and if done so, the appellants/defendants, should

handover the possession immediately and were at liberty to take the amount from the Court, so deposited by the respondent/plaintiff.

The first contention that was put forth by the appellants'' side was that Ex.A.I, sale deed was executed only on 6.6.1983 and it was

subsequently corrected by the respondent as 26.6.1983 to suit his convenience for presenting for the registration, after the expiry of the period of

four months. This contention was rightly rejected by both the courts below in view of the admissions made by the appellants in the lawyer''s notice

under Ex.A.5 stating that the sale deed was executed only on 26.6.1983 and not on 6.6.1983 and hence the contention put forth by the

appellants'' side has got to be rejected, since it devoid of merit. The second contention that was put forth by the appellants'' side was that the

respondent did not pay the entire sale consideration; that he had no intention to pay the same also; that the respondent/plaintiff did not come with

clean hands and he was not entitled to any indulgence of the Court and that the appellants/vendors were not liable to execute the sale deed and

hand over the possession and under the circumstances, even though there was execution and compulsory registration of Ex.A.I, sale deed, it would

not pass title to the respondent. As seen from Ex.A.I, sale deed, the sale consideration for the immovable property in question was fixed at Rs.

43,000. Out of which Rs. 3,000 was adjusted towards the discharge of the mortgage and the balance of Rs. 40,000 was agreed to be payable by

the respondent vendee before the Sub Registrar, at the time of registration of the document. The appellants/defendants have not disputed the

execution of Ex.A.I, sale deed or the recitals therein. As stated above, Ex.A.I was entered into between the parties on 26.6.83 and was

compulsorily registered on 21.10.83, wherein the Sub Registrar has made an endorsement recording the refusal of the appellants to put their

signature at the time of registration, which runs as follows:

It has been specifically averred in the plaint that the appellants/defendants before the presentation of the registration wanted the respondent/plaintiff

to pay the sum of Rs. 25,000 as they have purchased a lorry and the amount would have to be paid to the owner of the lorry and that they have

agreed that the plaintiff could pay balance amount of Rs. 15,000 at the time of registration of sale deed and hence, the respondent/plaintiff had no

other alternative but to pay the said sum of Rs. 25000 in the presence of one Balakrishnan. Both the courts below have rightly rejected this plea of

part payment of Rs. 25,000 on the ground that the said Balakrishnan, the alleged witness for payment, was not examined and that had the payment

to be true, the respondent would have obtained a receipt from the appellants. Thus, both the courts below have negatived the contention of the

part payment of Rs. 25,000. It is not the case of the respondent/plaintiff that he was ready and willing to pay and was prepared to pay Rs. 40,000

being the balance of sale consideration, but from the averment in the plaint and the evidence also, it would be clear that the respondent has asked

the appellant to receive the balance of sale consideration of Rs. 15,000. At this juncture, it remains to be stated that the appellants as vendors

under Ex.A.I, who were entitled to the balance of sale consideration of Rs. 40,000 were under no obligation to be a party for the registration of

the document without the same being paid by the respondent at the time of registration. From the admission made by the respondent/plaintiff, it

would be abundantly clear that he was not ready to pay Rs. 40,000 as per the agreement under Ex. A.1, at the time of registration. At the time of

registration/the Sub Registrar has made the following endorsement:

Below the said endorsement, the respondent/plaintiff has put his signature. From the above endorsement recorded by the Sub Registrar, it would

be quite evident that the respondent/plaintiff did not tender either Rs. 40,000 or any amount to the appellants at the time of registration. It is

pertinent to note that the Sub Registrar has not recorded anything to indicate that there was any refusal on the part of the appellants to receive the

same. All the above would be indicative of the fact that even without making any payment of balance sale consideration, the respondent has got the

document compulsorily registered. Even in his plaint the respondent/plaintiff has not expressed his readyness and willingness to pay the balance of

Rs. 40,000. On the contrary, he has stated that he is ready to tender the amount of Rs. 15,000 whenever he was called upon to do so. From all

the above, it would be clear that he had no intention to pay the balance of Rs. 40,000 being the balance of sale consideration as found under Ex.

A.I. -

Much relying on the following two decisions, the learned counsel for the appellants would urge that the title of the appellants in respect of the

suit property has not passed to the respondent/ plaintiff despite the execution and registration. In the decision reported in Ananda Chandra

Pradhan Vs. Nilakantha Tripathy and Others, it has been held as follows:

Transfer of Property Act (1882), Section 54- Transfer of ownership-The passing of title on execution of a sale deed depends on the intention of

the parties with which they have executed the sale deed. Such intention has to be gathered primarily from the recitals in the sale deed and if they

are ambiguous, from the surrounding circumstances and the conduct of the parties.

Where according to the recitals in the sale deed prior receipt of consideration money actuated the vendor to execute the sale deed and it was

found by a concurrent finding that there was no payment of consideration, title could not be said to have passed merely on the execution of the sale

deed.

In Shiva Narayan Sah and Others Vs. Baidya Nath Prasad Tiwary and Others, it has been held as follows :

(A) When the sale deed stipulates payment of balance price during exchange of equivalents (balance amount and registration receipt) and

mentions only ""putting buyer in possession"" (but possession was not delivered), even if it does not expressly postpone passing of the title till

discharge of the consideration due and bulk of the consideration (More than 3/4ths the total) also has been paid, the title will not pass with the

registration of the deed. It will only during the exchange of the equivalents.

When the balance is tendered within reasonable time the title will pass without fail, irrespective of a refusal of the vendor to receive the money and

his contracting another sale after cancelling the registered deed. (He has no option to do so).

From a perusal of the above decisions, it would be clear that in a given case, whether the title has passed on execution of a sale deed depends on

the intention of the parties with which they have executed the sale deed and the same has got to be gathered primarily from the recitals in the sale

deed, and that when the balance is tendered within reasonable time, the title would, pass without fail, irrespective of a refusal of the vendor to

receive the money. It is true that under a sale deed on the execution and registration, there is a prima facie completion of transfer of title to the

vendee. It cannot be disputed that mere non-passing of consideration will not stop the passing of the title, as the sale of immovable property may

be made in exchange of the consideration already paid or promised to be paid in future. In order to decide whether the execution and the

registration of a sale deed have actually passed the title to the vendee, the real question would be whether the vendor really intended to transfer the

ownership by mere execution and registration of the sale deed or it was agreed upon to do so, only after the receipt of the consideration as a prior

condition would depend upon the terms of the contract between the parties. If the sale deed clearly stipulates, as in the instant case, that the title to

and the ownership of the property would vest in the vendee only after the payment of the balance of consideration, the reasonable and possible

under such situation, would be that until the said condition for payment of the balance of consideration is made, there was no effective to transfer of

ownership. What was the intention of the parties as to the passing of ownership has got to be gathered only by looking into the terms of the

contract between the parties. In the instant case, there is a clear recital to the effect that at the time of the registration of the sale deed, the

respondent /vendee should pay the balance of consideration of Rs. 40,000 to the appellants /vendors before the Registrar. But the respondent has

failed, to perform his part by making payment of the consideration or depositing the same in the Sub-Registrar''s Office at the time of the

registration. Hence the execution and registration of Ex.A1 sale deed, though evidenced a prima facie completion of transfer of title to the

respondent /vendee, there was no effect to transfer of ownership.

In the instant case, in view of the facts and circumstances, this Court is of the considered view that the title of the appellants despite the

execution and registration of the document has neither passed to the respondent nor can he seek for declaration of title to the suit property merely

on the basis of execution and registration of Ex.A1, sale deed, when the balance of sale consideration as found under Ex.A1 was neither paid

before the registration nor was tendered at the time of registration nor has the respondent/plaintiff any intention to pay the balance of sale

consideration. Quite evident it would be that the respondent/plaintiff, who was liable to pay the balance of sale consideration of Rs. 40,000 under

Ex.A1 has come out with a false plea of part payment of Rs. 25,000 even before the date of registration; that never was he prepared to pay the

balance of sale consideration of Rs. 40,000 at any point of time. Endorsement made by the registrar under Ex.A1, sale deed would reveal that he

never tendered either Rs. 40,000 or any amount. Even in the plaint, he has not come forward to express his readiness to pay the balance sale

consideration of Rs. 40,000. All the above would go to show that he had no intention to act as per the terms of Ex.A1. Under the stated

circumstances, this Court is afraid whether it could accept the plea put forth by the respondent''s side that the mere execution and registration of

the document, even without the payment of and in the absence of intention to pay the balance of sale consideration, the title in respect of the

property would pass on to the plaintiff/respondent. In the instant case, there is sufficient documentary evidence to show that the plaintiff/respondent

has neither paid the balance of sale consideration nor has intention to pay the same nor there was any refusal on the part of the appellants to

receive the balance of sale consideration at any point of time. It is pertinent to note that the respondent/plaintiff has not deposited the balance of

consideration at the time of compulsory registration or he has deposited the same in Court at the time of the filing of the suit nor has he averred in

the plaint that he was ready to pay the balance of consideration of Rs. 40,000, but on the contrary he lias averred that he was ready to pay Rs.

15,000 calling it as the balance of consideration. Upholding a sale transaction and declaring the title on the basis of Ex.A1 merely by reasons of

execution and registration, without payment of consideration would not only be against the legal concept as to the transfer of property through sale,

but also no doubt would lead to unhealthy practice. Accepting the contentions of the respondent''s side and granting the relief in favour of the

vendee, who has not paid the consideration, would be nothing but causing injustice to a property owner. Under the given circumstances, driving the

owner of the property to go to a court of law; for recovery of the consideration would be not only upholding the sale which was without

consideration but also against the right, interest end title of the appellants, who were admittedly the owners of the property. Under the stated

circumstances, without any hesitation, it has to be held that the mere execution and registration under Ex.A1 has not passed title to the respondent/

plaintiff, which would enable him to file a suit like this for declaration of his title and recovery of possession. Hence, both the courts below were not

correct in agreeing with the contentions of the respondent/plaintiffs side to decree the suit and hence, the judgment and decree of both the courts

have necessarily to be set aside. Hence the plaintiff is not entitled to any one of the reliefs asked for.

In the result, this second appeal is allowed. The Judgment and decree of both the courts below are set aside, and the suit is dismissed., The

respondent is at liberty to withdraw Rs. 40,000 from the lower court, if deposited as alleged by him. The parties shall bear their costs.