Gayatri Prasad v. Board Of Revenue And Others

Satish Chandra, J.:—This special anneal arises out of a suit for declaration and in the alternative for possession.

2. Ram Dilar, Ram Deo and Raj Bahadur, respondents Nos. 4 to 6, were the sirdars of a 3/4 share in the holding. On 4th January, 1965, they applied for the grant of a bhumidhari sanad. The sanad having been granted, they on 4th April, 1965, executed a deed of sale of their 3/4 share in the holding in favour of the appellant Gayatri Prasad for a consideration of Rs. 4,000/-. The vendors, however, refused to complete the registration of the document. The vendee had to apply for compulsory registration and the sale deed was compulsorily registered on 24th May, 1966.

3. In the mean-while, on 10th June, 1965, the vendors executed a fresh deed of sale in favour of Smt. Jagwanti, respondent No. 8, in respect of their 3/4 share in the holding for a consideration of Rs. 8,833/-. The sale deed was registered the same day.

4. The appellant applied for mutation of his name but the application failed. There were proceedings under Sec. 145, Cr. P.C between the parties which also terminated against the appellant. Aggrieved, the appellant instituted a suit in the revenue court for a declaration under Sec. 229-B, Zamindari Abolition Act, and for possession under Sec. 209, Zamindari Abolition Act. The suit was contested by the vendors as well as the subsequent transferee. The principal plea raised by the vendors was that the plaintiff had not paid the consideration and hence title did not pass. The trial court held that the evidence led by the plaintiff in order to prove the payment of the entire sale consideration was doubtful but the documentary evidence established that a sum of Rs. 500/- had been paid in part payment of the sale consideration. It was also observed that the vendors had executed the sale deed “after receiving the sale consideration.” On these findings the suit was decreed. The defenants and also taken a plea of fraud but that was negatived.

5. The defendants went up in appeal. The Additional Commissioner held that the payment of Rs. 500/- had been established but he was not satisfied that the evidence clearly established payment of the balance of the sale consideration. He affirmed the finding that the defendants had failed to prove that the sale deed was vitiated by any fraud. The decree was affirmed. On second appeal the Board of Revenue repelled the submissions raised on behalf of the defendants and dismissed it. Aggrieved, the defendants came to this Court under Art. 226 of the Constitution.

6. A learned single Judge held that the delay in the registration of the sale deed in favour of the plaintiff-appellant will not enable the plaintiff to raise the presumption that the intention was to effect transfer of ownership and, therefore, the question whether the entire sale consideration was paid or not becomes material. Since the courts below had not recorded a clear finding on the question, the case was remanded to the Board of Revenue for hearing of the second appeal afresh and in accordance with law. Aggrieved, the plaintiff has come up in appeal.

7. The concurrent findings of fact are that a part of the sale consideration namely Rs. 500/- had been paid by the plaintiff-appellant to the vendors and that the sale in favour of the plaintiff was not vitiated by any fraud.

8. This is a case where not only a deed of sale was executed but the same was also registered. Under Sec. 47 of the Registration Act the sale deed will operate to transfer title with effect from the date on which it was executed. So, the title in the 3/4 share sold by the deed passed to the plaintiff-appellant on 4th April, 1965. For the defendant-respondents it was urged that the vendors never intended that ??? full consideration. The deed of sale recites: “Having received the entire sale consideration of Rs. 4,000/- from the purchaser we are executing the deed of sale and that now nothing remains to be paid by the purchaser.” These recitals are not indicative of any such intention as propounded by the learned counsel for the respondents. It is, however, not necessary to go into this factual controversy because, in our opinion, in law the sale deed takes effect on the date of its execution after it has been registered; and in a suit for possession, the vendor cannot resist the suit on the ground that title did not pass on the date of the execution for non-payment of the balance of the sale consideration.

9. In Baijnath Singh v. Pallu . I.L.R 30 All. 125. a Division Bench of this Court held that on the sale of immovable property non-payment of the purchase money does not prevent the passing of the ownership of the purchased property from the vendor to the purchaser and the purchaser can, notwithstanding such non-payment, maintain a suit for possession of the property.

10. In Sahadeo Singh v. Kuber Nath . ???. a Division Bench observed that there is a well-understood distinction between a contract of sale and a contract to sell or for sale. Sale passes ownership immediately when it has been executed while a contract to sell creates an obligation attached to the ownership of property not amounting to an interest therein. It is not always that the ownership passes on the execution of a deed of sale. When the ownership passes is a question of intention of the parties. The criterion to decide whether there is a sale or merely a contract to sell is whether another deed will be required to pass title or ownership. In this case it has not been suggested that in law another document was required to be executed before title would pass from the vendors to the plaintiff-appellant, obviously because the vendors had already executed a deed of sale purporting to transfer title.

11. The reason is not far to seek. Sec. 55(4)(b) of the Transfer of Property Act entitles the seller to a charge upon the property in the hands of the buyer for the amount of the purchase money or any part thereof remaining unpaid and for interest on such amount or part from the date on which possession has been delivered. This would show that the right of the seller is to have a charge upon the property for the unpaid purchase price. He cannot resist a suit for possession merely for the reason that part of the purchase price had not been paid.

12. Learned counsel for the respondents relied upon certain decisions of the Patna High Court in support of the proposition that title will not pass unless an intention to pass title on the execution of the sale deed is established. In Motilal v. Ugrah Narain . A.I.R 1950 Pat. 288. it was held that where a registered sale deed recited the passing of full consideration and the delivery of possession to the vendee but it was found that actually not a farthing passed under the sale deed and the possession of the registered sale deed remained with the vendor, the inference was irresistible that the intention of the parties was that title would not pass unless consideration money was paid. As the consideration was never paid, title in the property remained with the vendor.

13. The case is distinguishable because cases where no consideration passed stand on a different footing from cases where consideration remained unpaid in part on the date of the execution of the sale deed. The reason is that Sec. 54, Transfer of Property Act contemplates transfer of title even when the price is paid in part and part is promised.

14. The case of Abdullah v. Bhichuk . A.I.R 1934 Pat. 68. is distinguishable on facts. There the suit was for recovery of the sale deed or in the alternative for refund of the money. The defence was that because the plaintiff had failed to pay the consideration at the time of the registration, the sale fell through. It was held that the evidence of the parties was that title would pass on payment of the entire consideration and so registration alone was insufficient to pass title without such payment. Firstly, the case is distinguishable on facts. That was not a case of a suit for possession by a purchaser after a completed conveyance. Secondly, we are doubtful of the correctness of the proposition of law that until payment of the consideration money registration alone is insufficient to pass title.

15. The case of Panchon Sahu v. Janki Mandar . A.I.R 1952 Pat. 262. was also relied upon. In that case the plaintiff claimed that he had paid the entire consideration for the sale but the vendors did not hand over the registered sale deed in spite of demand. The plaintiff said that in spite of it he had taken possession of the property sold. The suit was hence instituted for declaration of title. The defence was non-payment of a portion of the sale consideration. It was found that out of the sale consideration of Rs. 100/- the plaintiff had paid Rs. 70/- only. On facts it was found that the intention of the parties was that title should pass on payment of the entire consideration and since that was not done, the plaintiff did not acquire any title to the disputed land. The suit was accordingly dismissed. It will be remembered that in substance the suit was for recovery of the registered sale deed and for declaration of title. That was not a suit for possession on the basis of a document of title already in the possession of the plaintiff. The Bench did not consider the effect of Sec. 55(4)(b) of the Transfer of Property Act. This case is, therefore, inapplicable.

16. The view that non-payment of a portion of the sale price will not invalidate the sale deed is supported by the decision of the Bombay High Court in Chandrashankar v. Abhla Mathur . A.I.R 1952 Bom. 56.. There it was held that the mere fact that a sale deed recites the payment of consideration which is not true cannot render the document invalid. To support a sale it is not necessary that the whole of the price should be paid. The price may be paid or promised wholly or in part. If according to the tenor of the document the consideration was not actually paid, but the document shows that there was an intention to pay, then in that case the document is not rendered invalid on account of the non-payment of the consideration. If, on the other hand, the intention was not to pay any consideration, then the document is of no effect.

17. Here it cannot possibly be said that there was no intention to pay consideration at all because according to the findings Rs. 500/- had been paid. The document recites that consideration had passed. Therefore the sale cannot fail because of the non-payment of the balance of the consideration. As provided by Sec. 55(4)(b) the vendor has a right to recover the unpaid purchase price and to enforce the charge created by that provision. He could not resist a suit for possession. The subsequent transferee stands in no better position. The sale deed executed in her favour stood completely nullified and the title which it purported to pass stood defeated by the compulsory registration of the sale deed in favour of the plaintiff, because that deed had been executed earlier, and under Sec. 47 of the Registration Act it operated to transfer title with effect from an earlier date. Of the two completed sale deeds, the one which is earlier takes priority after registration.

18. For the respondents it was urged that the suit was not maintainable in the revenue court: the reason being that in substance the suit was for cancellation of the sale deed executed in favour of the transferee. Such a suit lies only in the civil court. We are not impressed by this submission. The plaintiff did not, and need not have asked for cancellation of a void sale deed.

19. In this view of the matter it was, in our opinion, unnecessary to send back the case for a finding whether the entire sale consideration has been paid or not.

20. In the result, the appeal succeeds and is allowed. The judgment of the learned single Judge is set aside and the writ petition is dismissed with costs.

Appeal allowed.