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Piara Singh v. Jagtar Singh And Anr
Case Summary — Selected Civil Appeals and Applications
Factual and Procedural Background
The appeals arise from litigation concerning shop-cum-flat No. 21 (also referred to as shop-cum-flat 71 in a later certificate) in Grain Market, Sector 26, Chandigarh. Piara Singh (the defendant at trial; appellant on appeal) was the vendor. The plaintiffs purchased the property by sale deed dated 22-11-1971 for a consideration stated in the deed as Rs. 75,000. The defendant delivered possession of the ground floor on that date but failed to deliver vacant possession of the first and second floors; the vendor allegedly agreed to pay rent at Rs. 400 per mensem in respect of those floors.
The plaintiffs filed an eviction petition and then a suit for possession of the first and second floors and for recovery of Rs. 14,000 as damages for use and occupation from 1-7-1973 to 30-6-1976 at Rs. 400 per mensem. The defendant contested the suit, pleading (inter alia) that the true sale consideration was Rs. 1,50,000, that the sale deed had been executed for Rs. 75,000 only as a matter of record because the plaintiffs could not immediately pay the balance, and that Prem Singh (the plaintiffs' father) had executed a document dated 25-11-1971 agreeing to pay the outstanding Rs. 75,000 within a year, failing which the sale would be cancelled. The defendant also pleaded contravention of the Foreign Exchange Regulation Act (FERA), contending that the sale was void because the consideration was brought into India in breach of FERA.
The trial court found for the plaintiffs: it held that the whole building was sold for Rs. 75,000, rejected the document said to be executed by Prem Singh (mark 'A') as not satisfactorily proved, found no breach of the Foreign Exchange Regulation Act established, and decreed possession and recovery of Rs. 14,000. The defendant appealed; the matter before this Court disposed of R.F.A. No. 1817 of 1978, R.S.A. No. 1210 of 1982 and Civil Miscellaneous Applications Nos. 885-CI and 886-CI of 1986.
Legal Issues Presented
- Whether the true sale consideration was Rs. 1,50,000 (as argued by the defendant/appellant) and whether an alleged separate agreement (mark 'A') executed by Prem Singh could invalidate the registered sale deed for Rs. 75,000.
- Whether the document marked 'A' (dated 25-11-1971) was genuine and admissible to alter the effect of the registered sale deed dated 22-11-1971.
- Whether a contravention of sub-section (1) of Section 31 of the Foreign Exchange Regulation Act (FERA) would render the transaction void so that title would not pass to the purchaser and the plaintiffs could not obtain possession.
- Whether subsequent events — notably a certificate dated 10-9-1981 issued by the Reserve Bank of India authorizing the plaintiffs to hold the property — could be received and relied upon by the appellate court as additional evidence.
- In the separate appeal (R.S.A. No. 1210 of 1982), whether the decree for damages at the relevant rate and period as earlier determined should be disturbed on appeal.
Arguments of the Parties
Appellant's Arguments (Piara Singh / Mr. Anand Swaroop)
- The real sale consideration for the property was Rs. 1,50,000, not Rs. 75,000 as recorded in the registered sale deed.
- Prem Singh (father of the plaintiffs) had executed a separate agreement (mark 'A') on 25-11-1971 by which he agreed to pay the outstanding Rs. 75,000 within one year; if he failed, the sale deed would be cancelled. This document, the appellant contends, establishes the true transaction.
- The appellant further argued that the property transfer was invalid under sub-section (1) of Section 31 of the Foreign Exchange Regulation Act, meaning the plaintiffs were not entitled to possession.
- No additional or new arguments were raised in the subsequent appeal (R.S.A. No. 1210 of 1982) beyond those earlier advanced.
Respondents' (Plaintiffs') Position
- The plaintiffs relied on the registered sale deed dated 22-11-1971 which recorded the consideration as Rs. 75,000 and showed the sale and registration formalities completed; possession of ground floor was delivered that day.
- They alleged that the defendant failed to give vacant possession of the first and second floors and that the defendant's alternative contentions (including an alleged separate agreement and contravention of FERA) were not proved.
- The plaintiffs subsequently produced a certificate dated 10-9-1981 from the Reserve Bank of India authorizing the named plaintiffs to hold the shop-cum-flat, which they relied upon to cure any alleged illegality under FERA.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Lachmeshwar Prasad v. Keshwar Lal, AIR 1941 FC 5 | That on appeal (procedural law in India) the hearing is in the nature of a re-hearing and an appellate court may take into account facts and events which have come into existence after the decree appealed against. | The court relied on this authority to accept the plaintiffs' application for additional evidence and to take on record the Reserve Bank of India certificate dated 10-9-1981 as Exh. P.A., thereby considering a subsequent event that affected the legality of the transaction. |
Court's Reasoning and Analysis
The court proceeded through a stepwise analysis that tracked the trial court findings and addressed each contention raised on appeal:
- Concerning the alleged higher sale consideration and the separate agreement (mark 'A'): the registered sale deed of 22-11-1971 expressly stated the consideration as Rs. 75,000. The court found that the whole consideration was paid by Prem Singh on behalf of the plaintiffs in the presence of the Sub-Registrar. There was no indication in the sale deed of any agreement providing that additional consideration would follow. The court emphasized the settled principle that upon execution and registration of a sale deed the title passes to the purchaser; thus the registered deed's terms were decisive.
- On the genuineness and evidentiary value of document mark 'A': the court identified material doubts. The deed allegedly executed the same day as the sale deed was dated 25-11-1971 (not 22-11-1971), contradicting the appellant's version. Prem Singh did not admit execution. The sole attesting witness (V.K. Sharma) was not produced by the defendant; his non-production supported the plaintiffs' stance that the document was not executed by Prem Singh. The defendant's handwriting expert (D.W.5, Shri Shanti Sarup Jain) admitted variations between admitted and disputed signatures and that the writer's hand was not a set hand; the trial court rightly did not rely on that testimony given the forensic limitations and the expert's concessions. The purchase of the stamp paper was not shown. On these grounds the court held mark 'A' was not satisfactorily proved.
- Even assuming, arguendo, that Prem Singh had executed mark 'A', the court noted he lacked authority to bind the plaintiffs at that time: power of attorney in favor of Prem Singh was granted only later (31-3-1975 and 21-12-1975 by different plaintiffs), so the document could not confer rights to the defendant-appellant.
- On the FERA argument (sub-section (1) of Section 31): the court examined the statutory text and observed that while S.31(1) forbids acquisition by non-citizens without Reserve Bank permission, the section does not provide that title does not pass on breach; instead, contravention may attract penalties (S.50) or prosecution (S.56). Section 63 contains confiscation provisions for certain contraventions but not specifically for breach of S.31(1). Consequently, the court concluded that contravention of S.31(1) does not automatically render a sale transaction void nor preclude the purchaser from acquiring title and possession.
- Regarding the Reserve Bank certificate dated 10-9-1981: the certificate expressly authorized Jagtar Singh and Kuldip Singh to hold the shop-cum-flat and to do business after returning to India for permanent settlement. The court treated this certificate as regularizing any illegality in the purchase. Applying Lachmeshwar Prasad v. Keshwar Lal, the court held that it could, in the interest of justice, receive and consider subsequent events; accordingly it allowed Civil Misc. No. 885-CI (O.41 R.27 and S.151 CPC) to take the certificate on record (marked Exh. P.A.). Civil Misc. No. 886-CI, which sought dispensation from filing the original, became infructuous after the plaintiffs filed the original certificate.
- The court noted that the rate of damages had not been challenged on appeal. For R.S.A. No. 1210 of 1982 (a separate appeal concerning damages for the period 1-7-1976 to 31-7-1977), no new arguments were advanced and the court found no merit in disturbing the earlier decree for damages.
Holding and Implications
Holding: APPEALS DISMISSED — both the main appeal (R.F.A. No. 1817 of 1978) and R.S.A. No. 1210 of 1982 were dismissed with costs. The court also allowed the application to take the Reserve Bank certificate of 10-9-1981 on record (marked Exh. P.A.).
Implications:
- The trial court's decree for possession of the first and second floors and for recovery of the damages (Rs. 14,000 for the earlier period and the sum decreed in the later suit) stands affirmed.
- The court found the purported document (mark 'A') to be not satisfactorily proved and, in any event, ineffective to defeat the registered sale because the putative executor lacked authority at the relevant time.
- Contravention of sub-section (1) of Section 31 of the Foreign Exchange Regulation Act, as argued, did not operate to make the transaction void nor to prevent the passage of title; other sanctions in the Act (penalties, prosecution) may apply but confiscation for breach of S.31(1) was not shown to be available under the cited provisions.
- The Reserve Bank of India certificate issued after the decree was accepted as validating the plaintiffs' entitlement to hold the property; the appellate court relied on the principle that subsequent events may be considered in appeals and received the certificate as additional evidence.
- No new legal precedent was announced by this judgment beyond application of established principles (including the Lachmeshwar Prasad principle regarding reception of subsequent events on appeal); the decision's direct effect is to affirm the plaintiffs' title and possession and to dismiss the appellant's challenges.
This summary is based exclusively on the contents of the provided opinion and does not add information beyond that text.
1. This judgment will dispose of R. F. A. No. 1817 of 1978, R. S. A. No. 1210 of 1982 and Civil Miscellaneous Applications Nos. 885-Cl and 886-CI of 1986.
2. The facts as given in R. F. A. No. 1817 of 1978 are that Piara Singh was the owner of shop-cum-flat No. 21, Sector 26, Grain Market, Chandigarh. The plaintiffs purchased the said Flat form him for a consideration of Rs. 75,000/- on 22-11-1971. It is alleged that the defendant delivered possession of the ground floor to them on the same day which was let out by them to one Gulshan Rai Sapra. However, the defendant could not give vacant possession of the first and second floors of the building to them and consequently, he agreed to pay the rent at the rate of Rs. 400/- per mensem to them. They filed an eviction petition against the defendant regarding first and second floors of the building in which the defendant took a plea that there existed no relationship of landlord and tenant between the parties and that he was a trespasser in the building. consequently, they filed a suit filed a suit for possession of the first and second floors of the building and for recovery of Rs. 14,000/- as damages for use and occupation with effect from 1-7-1973 till 30-6-1976 at the rate of Rs. 400/- per mensem.
3. The suit was contested by the defendant, who, inter alia, pleaded that the property was in fact sold by him for a consideration of Rs. 1,50,000/- to plaintiffs but the sale deed was got executed in favour of the plaintiffs for a consideration of Rs. 75,000/- as they had no money to pay the balance amount. The plaintiffs' father Prem Singh agreed to pay balance amount of Rs. 75,000/- with in a year and for that purpose he executed a document dt. 25-11-1971. It is further averred that their father agreed that if the remaining amount was not paid within the stipulated period, the sale deed would stand cancelled. The defendant further took a plea that the sale consideration had been brought to India by the father of the plaintiffs in contravention of Foreign Exchange Regulation act an, therefore, the sale was void. Some other pleas were also taken but they do not survive in the appeal.
4. The learned trial Court held that whole of the building was sold by the defendant to the plaintiffs for a consideration of Rs. 75,000/- and the document allege to have been execute by the father of the plaintiffs in favour of he defendant agreeing to pay Rs. 75,000/- more to him within one year and that if that amount was not paid within the stipulated period, the sale deed would stand cancelled, was not satisfactorily proved. It further held that no breach of foreign Exchange Regulation Act (referred to as the Act) had been established. The other pleas taken by the defendant were also rejected. Consequently, it decreed the suit for possession of the first and second floors for the building and for recovery of Rs. 14,000/- The defendant has come up in appeal to this Court.
5. Mr. Anand Swaroop, learned counsel for the appellant, has argued that the sale consideration of the building was Rs. 1,50,000/- and not Rs. 75,000/-. Prem Singh father of the plaintiffs had agreed by a separate agreement to pay the amount of Rs. 75,000/- within a period of one year and I case he failed to do so, the sale deed would retain possession of the building. He further submits that the agreement mark 'A' has been duly proved and from the document the above facts stand established.
6. I have duly considered the argument but do find not any substance therein. The sale deed was executed by the defendant in favour of the respondents on 22-11-1971 wherein the sale consideration is mentioned as Rs. 75,000/-. The whole of the consideration was paid by Prem Singh on behalf of the plaintiffs to the defendant in the presence of the Sub-Registrar. There is no mention in the sale deed that the sale consideration was Rs. Rs. 15,000/- out of which Rs. 75.000/- had been paid and the balance would be paid subsequently. In case there had been such an agreement, between the parties, as stated by Mr. Anand Swaroop, there was no reason as to why that was mentioned in the sale deed. It is well settled that after the execution and registration of a sale deed, the title of the property on to the purchaser. Therefore, as on as the sale deed was execution and registered, the title in the building on to the plaintiffs.
7. There is doubt about the genuineness., of the document mark 'A'. It is alleged to have been executed by Prem Singh on the, same day on which the sale deed was executed. The said document, however, bears the date as 25-11-1971 and not 22-11-1971, the date of execution of the sale deed. Thus, the version of the defendant regarding the date of the execution of the document is falsified. Moreover, the execution of the document is not he properly established. Prem Singh does not admit its execution. V. K. Sharma was its solitary attesting witness but for the reasons best known to the defendant he has not been examined. His non-production supports the version of the plaintiffs that it was never executed by Prem Singh. The defendant produced Shri Shanti Sarup, Handwriting Expert. D.W. 5 to prove the document. The learned trial Court did not rely on his testimony and in my view rightly. It is well-settled that the science of handwriting is not a perfect science. Therefore, evidence of a Handwriting Expert is received with great caution. Moreover, Shri Shanti Saroop Jain admitted that there were variations in the admitted signature and the disputed ones, and that the hand of the writer was not a set hand. In this situation the statement of a Handwriting Expert cannot be of much assistance. It is also relevant to point out that the stamp paper was not purchased by Prem Singh. It has not been brought on the record as to who purchased the stamp paper. In the circumstances it cannot be held that mark 'A' was executed by Prem Singh.
8. Even if, it may be assumed that the document was executed by him, he had no right to do so as he had not power of attorney from the plaintiffs on the date when the document is alleged to have been executed. The power of attorney was given to him by Kuldip Singh on 31-3-1975 and by Jagtar Singh on 21-12-1975. Thus the defendant-appellant also does not get any right s under the document. For the aforesaid reasons, I reject the submission of Mr. Anand Swaroop and affirm the finding of the trial Court.
9. The next argument of Mr. Anand Swaroop is that the property in favour of the plaintiffs is invalid under sub-section (1) of S. 31 of the Act, and therefore, they arc not entitled to obtain its possession.
10. I have given my thoughtful consideration to the argument but do not find any merit in it. In order to decide the matter, it necessary to read relent portion of the said sub-section (1) of S. 31 of the Act which is as follows:--
''31(1). No person who is not a citizen of India and no company other than a banking company which is not incorporated under any law in force in India or in which the non-resident interest is more than forty per cent, Shall; except with the previous general or special permission of the Reserve Bank. acquire or hold or transfer or dispose of by sale, mortgage, lease. gift. settlement or otherwise any immovable property situate in India:
Provided that nothing in this sub-section shall apply to the acquisition or transfer of any such immovable property by way of lease for a period not exceeding five years.''
11. It is true that the section provides that without the previous permission of the Reserve Bank, a person who is not a citizen of India, cannot acquire property, but it does root provide that if someone purchases any property the title therein does not pass to him. What the Act provides is that if a person contravenes S. 31 and some other sections, he can be penalized under S. 50 and can also be prosecuted under S. 56. However, there is no provision in the Act which makes transaction void or says that no title in the property passes to the purchaser in case there is contravention of the provisions of sub-section (1) of S. 31. Section 63 contains a provision regarding confiscation of certain properties but it does not contain any provision for confiscation if there is breach of the provisions of sub-section (1) of S. 31. Therefore, the property purchased in contravention of sub-section (1) of S. 31 is also not liable to confiscation. In the circumstances, it cannot be held that the plaintiffs are not entitled to obtain possession of the property or recover damages for its use and occupation.
12. The matter may be examined from another angle. Even if the transaction is invalid, the plaintiffs have been given a certificate dt. 10-9-1981 by the Reserve Bank of India exercising its powers under sub-section (1) of S. 31 of the Act. It is stated in the certificate that Jagtar Singh and Kuldip Singh sons of Prem Singh, 113, Sector 11-A, Chandigarh, are authorised to hold shop-cumflat 71, Grain Market Sector 26, Chandigarh, and do business after coming to India for permanent settlement. It is evident from the certificate that the plaintiffs are entitled r. hold the said property. Therefore, if the v was any illegality in the purchase, the same has' been legalized by the Reserve Bank by giving the certificate to them.
13. The appeal was filed in 1978 whereas the certificate has been issued in 1981. The plaintiffs therefore moved Civil Miscellaneous No. 885-CI of 1986 under O. 41, R. 27 and S. 151 of Civil P.C. praying that the document be taken on the record. It is well-settled that a Court in the interest of justice can take into consideration subsequent events. In the above view I am fortified by the observations of the Federal Court in Lachmeshwar Prasad v. Keshwar Lal, AIR 1941 FC 5, wherein it was observed that hearing of an appeal under the procedural law of India is in the nature of re-hearing and therefore in moulding the relief to be granted in a case on appeal, the appellate Court is entitled to take into account even facts and events which have come into existence after the decree appealed against. Consequently, I accept the application, take the certificate on the record and mark it as Exh. P.A. In Civil Misc. No. 886-CI of 1986, it is stated that the applicant would produce the original certificate after the application for additional evidence is allowed. Consequently, it is prayed that the filing of the original certificate be dispensed with for the time being. The plaintiffs have since filed the original certificate. Therefore, the civil miscellaneous has become infructuous.
14. The rate of damages has not been challenged in the appeal before me. Consequently, I do not find any merit in the appeal.
15. Now I advert to R.S.A. No. 1210 of 1982. The plaintiffs have filed this suit for damages at the rate of Rs. 500/- per mensem for the period from 1-7-1976 to 31-7-1977 regarding the property in dispute. The trial Court decreed the suit for recovery of Rs. 5,200/-. The appeal by Piara Singh was dismissed by the Additional District Judge. He has come up in second appeal to this Court.
16. No additional argument has been raised in the appeal by Mr. Anand Swaroop.
17. For the reasons already mentioned, I do not find merit in this appeal too. Consequently, I dismiss both the appeals with costs.
18. Appeals dismissed.
Foreign Exchange Regulation actsub-section (1) of S. 31Alert