Haridas Vishnu Sawant & Ors. v. Nalini Satish Jadhav & Ors.

1 The appellants in this Appeal are the defendants in the Regular Civil Suit No.350 of 2001 filed by the plaintiff, specific performance of agreement of sale dated 14/6/2001 in respect of the property belonging to the defendant and which is alleged to have been agreed to be sold to the plaintiff for a consideration of Rs.70,000/-. The Suit came to be decreed with costs and the defendants were directed to execute the sale transaction in favour of the plaintiff by accepting the amount of Rs.59,000/- and perform his part of the contract. On the failure of the defendant no.1 to execute the sale transaction, liberty was given to the plaintiff to get the same executed through the Court.

2 Being aggrieved by judgment dated 10/3/2011, decreeing the Suit of the plaintiff, the defendants preferred Regular Civil Appeal No.38/2011 which was also dismissed by judgment dated 22/10/2018 at the hands of the District Judge-1 Vadunj. Being aggrieved, the present Second Appeal is instituted by the said appellants.

3 I have heard Shri Dilip Bodake for the appellant/original defendant and Advocate Sachin Punde for the respondent in the Appeal and original plaintiff.

4 The suit property is a parcel of land located in Mauje Yeoul, Taluka Khatav and the defendant, who agreed to sell, his 5 anna 4 pai share to the plaintiff resulted in execution of agreement of sale on 14/6/2001 for a consideration of Rs.70,000/-. The plaintiff paid earnest money of Rs.11,000/- to the defendant no.1 and agreed to pay the balance within three months of the agreement of sale. The agreement being unregistered, the plaintiff pleaded that the possession of land was delivered to him on the same day and the defendant was to incur expenses of the sale deed. The plaintiff particularly pleaded that, on 2/7/2001, the plaintiff paid further sum of Rs.20,000/- to the defendant no.1 and he was ready and willing to execute the sale transaction by paying remaining amount of Rs.59,000/-. In order to convey his readiness and willingness, he send a notice to the defendant no.1 on 3/8/2001 by Registered Post, extending his willingness to get the agreement executed and requesting the defendant no.1 to execute the transaction as per the agreement for sale. Accordingly, the plaintiff remained present in the Registrar's office on 13/9/2001 from 11.00 am, but despite notice being served upon the defendant no.1 on 5/9/2001, he failed to remain present and avoided to execute the transaction as per the terms and conditions to sell. The plaintiff claimed to have incurred an amount of Rs.15,000/- to Rs.20,000/- towards expenses in developing the suit land and in order to restrain the plaintiff from enjoying the fruits of the property, the defendant no.1 sold the suit land to one Shri Bhanudas Jadhav, thereupon the plaintiff amended the suit and impleaded him as defendant no.2. In the backdrop of the above pleadings, the plaintiff sought specific performance of the contract and a declaration, directing defendant no.1, to execute the sale transaction in favour of the plaintiff.

5 Both the defendants, to the Suit resisted the relief by filing their respective written statement at Exhibit 36 and 37 respectively. The defendant no.1 denied the execution of agreement of sale in favour of the plaintiff and he also denied acceptance of earnest money as well as acceptance of Rs.20,000/-. He further denied to the delivery of possession, in view of the agreement of sale. By amending his pleading, defendant no.1 specifically pleaded alternatively, that if the Court comes to a conclusion regarding the agreement of sale dated 14/6/2001, since it was an unregistered agreement, coupled with possession and in terms of the said agreement, the plaintiff was liable to pay an amount of Rs.59,000/- within three months and to get the sale transaction executed. However, since the plaintiff failed to pay the requisite amount during the prescribed period of three months and since defendant no.1 was in need of money due to illness of his mother and he had to repay the amount of household expenses, and since there was a failure on part of the plaintiff to pay the remaining amount, his right of specific performance is extinguished because time was the essence of contract. The defendant no.1 thus alleged that the plaintiff is responsible for breach of conditions of the Agreement, which prompted him, to sell the suit land to defendant no.2. The defendant no.2 also opposed the claim of the plaintiff, on the basis, that he had purchased the suit land on 15/9/2001 for a consideration of Rs.91,000/- from defendant no.1 and before execution of the sale transaction, he had verified the mutation entries, and found that the name of the defendant no.1 recorded in the ownership as well as possession column. He, therefore, claimed that he is a bonafide purchaser without notice of the transaction between the plaintiff and defendant no.1. He claimed to be the exclusive owner of suit land on the basis of sale deed dated 15/9/2001.

6 In the wake of the aforesaid facts involved, the trial Court framed 13 issues and the burden to prove the execution of the agreement dated 14/6/2001 and receipt of earnest money as well as handing over of the possession of the suit property on the very same date, was cast on the plaintiff. The defendant no.1 was shouldered with burden to prove, whether time was the essence of the contract and whether the Suit is hit by provisions of Consolidation Act. Burden of proving that he is a bonafide purchaser for value without notice, was cast on defendant no.2. Further, the burden to prove readiness and willingness to pay an amount of Rs.59,000/- was also cast upon the plaintiff.

7 In support of the claim, the plaintiff examined himself (Exhibit-50) and one more witness, Suhas Hattigote, scriber of the written agreement (Exhibit-67). The defendant no.1 examined himself along with defendant no.2, the bonafide purchaser of the suit property. By appreciating the evidence placed before him, the learned Civil Judge, Sr. Division, Vadunj, accepted the case of the plaintiff as pleaded, that the defendant delivered the possession of the suit land on the day of agreement of sale. The witness of the plaintiff deposed that both the parties were present before him when the document was executed and that defendant no.1 put his signature in presence of the witnesses. Accepting the aforesaid evidence brought on record by the plaintiff, the trial Court held that execution of agreement dated 14/6/2001 is proved. The payment of earnest money of Rs.11,000/- was also held to be proved by the witness of the plaintiff and particularly, when during the argument, the counsel on behalf of defendant no.1 fairly admitted the execution of the agreement as well as payment of earnest amount of Rs.11,000/-.

8 Coming to t13he third issue which was framed for determination, as to whether the plaintiff was handed over the possession of the suit property on 14/6/2001. Recording that, except the recitals of the agreement for sale, there was no evidence on record to support the factum of the plaintiff's possession over the suit land and particularly when 7/12 extract of the land continue to record the name of the defendant no.1, the said issue was answered in the negative, and also the issue about the subsequent payment of Rs.20,000/- made by the plaintiff to the defendant. The burden cast on the defendant no.1 as to whether time was essence of contract, was also answered in the negative.

9 As far as the issue about readiness and willingness of the plaintiff, the trial Court referred to the notice sent by the plaintiff to the defendant before expiry of period of three months, as stipulated in the agreement for sale, calling upon him to accept the amount of Rs.59,000/- and to execute the sale deed. Holding that this notice support the plaintiff's claim that he is ready and willing to perform his part of the contract, the learned Judge focused his attention on the conduct of the defendant from his cross-examination, since he denied the execution of the agreement, though on receipt of the notice, on 5/9/2001, he forwarded a reply to the plaintiff on 11/9/2001. Recording that as per the agreement dated 14/6/2001, period of three months was over on 14/9/2001, and on 15/9/2001, the defendant no.1 executed a sale deed of the suit land in favour of defendant no.2 which was inferred as, the defendant no.1 avoided to perform his part of the contract. The action of the defendant no.1 to execute the transaction immediately on completion of period of three months, was held to be a deceitful act, giving rise to an inference that he was only waiting for expiry of three months, as a technical point. Referring to the document in form of sale transaction with defendant no.2, for consideration of Rs.91,000/-, the trial Court has recorded, that the amount was paid to defendant no.1 by defendant no.2 prior to execution of sale transaction and not in presence of the Registrar, which reflected the hurried approach of the defendant no.1, so as to avoid the transaction with the plaintiff. The plaintiff's readiness and willingness being proved, he was held eligible for a decree of specific performance. Recording that the plaintiff is entitled for a relief for specific performance in the wake of the circumstances brought on record and supporting his case, the Suit came to be decreed and the plaintiff was directed to deposit an amount of Rs.59,000/- in the Court within one month and defendant no.1 was directed to execute sale transaction in his favour and perform his part of the contract.

10 On an Appeal being filed by the defendants, the Appellate Court upheld the findings of the trial Court, on reading of the recitals in the deed of agreement of sale, in light of the evidence of the plaintiffs and defendants in respect of proof of execution of the said agreement of sale dated 14/6/2001. The said fact is held to be substantiated by the evidence brought on record, particularly in the cross-examination of the defendant no.1, that at the time of execution of sale deed, plaintiff has given him earnest amount of Rs.11,000/-. Recording that the trial court is right in holding that the defendant no.1 agreed to sell the suit property for consideration of Rs.70,000/- to the plaintiff on the basis of agreement to sell dated 14/6/2001 and accepting the earnest money, though the subsequent payment of Rs.20,000/- is not held to be proved, the Appeal is dismissed.

11 As far as the effect of an unregistered agreement on which the plaintiff has relied, to establish transfer of possession to the plaintiff, on the very same day, and while dealing with the submission of the appellant in the Appeal which is also vehemently sought to be advanced before me by the learned counsel Dilip Bodake that the unregistered document cannot be read in evidence, reliance was placed upon decision of the Apex Court in case of Omprakash Vs. Laxminarayan & Ors, (2014) 1 SCC as well as judgment in case of Javer Chand and ors. Vs. Pukhraj Surana, AIR 1961 SC 1655. The Appellate Court recorded that insufficiently stamped document is distinguishable from a non-registered document and it referred to the effect of the said documents while concurring with the trial Court in its finding upon readiness and willingness on part of the plaintiff, but blamed the defendant no.1 who was avoided execution of the sale transaction.

12 The question that arises for determination, is whether the agreement to sell which contain a recital about delivery of possession to the plaintiff could be accepted as the evidence of the possession being made over to the plaintiff, in absence of the said document being registered and when registration is mandatory, as from reading of Section 17 of the Registration Act, 1908.

17 Documents of which registration is compulsory: (1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act 16 of 1864, or the Indian Registration act, 1877 (3 of 1877), or this Act came or comes into force, namely – (1-A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of Section 53-A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001 and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said Section 53-A”. However, Section 49 of the Registration Act, 1908 deal with effect of non-registration of document, required to be compulsorily registered, which read thus:- “49. Effect of non-registration of documents required to be registered – No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882), to be registered shall – (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or

(c) be received as evidence of any transaction affecting such property or conferring such power.

13 The Hon'ble Apex Court in case of Ameer Minhaj vs Dierdre Elizabeth (Wright) Issar 2018 (7) SCC 639, was confronted with the effect of a document which is unregistered and whether it could be admitted as evidence of a contract, in Suit for specific performance, wherein it made the following observation:- “12. In the reported decision, this Court has adverted to the principles delineated in K.B. Saha & Sons (P) Ltd. v. Development Consultant Ltd. and has added one more principle thereto that a document is required to be registered, but if unregistered, can still be admitted as evidence of a contract in a suit for specific performance. In view of this exposition, the conclusion recorded by the High Court in the impugned judgment that the sale agreement dated 9-7-2003 is inadmissible in evidence, will have to be understood to mean that the document though exhibited, will bear an endorsement that it is admissible only as evidence of the agreement to sell under the proviso to Section 49 of the 1908 Act and shall not have any effect for the purposes of Section 53- A of the 1882 Act. In that, it is received as evidence of a contract in a suit for specific performance and nothing more. The genuineness, validity and binding nature of the document or the fact that it is hit by the provisions of the 1882 Act or the 1899 Act, as the case may be, will have to be adjudicated at the appropriate stage as noted by the trial court after the parties adduce oral and documentary evidence”.