Patna High Court SA No.514 of 1989 dt.07-08-2012 1/11

IN THE HIGH COURT OF JUDICATURE AT PATNA

Second Appeal No.514 of 1989

(Against the judgment and decree dated 25.09.1989 passed by Sri G.S.Choube, 1st Additional District Judge, Rohtas, Sasaram in Title Appeal No.128 of 1979/12 of 1989 dismissing the appeal and thereby confirming the judgment and decree passed by Sri Anil Kumar Sinha, 2nd Additional Subordinate Judge, Sasaram in Title Suit No.1243 of 1970/105 of 1979).

=========================================================== Sanjay Kumar & Ors

.... .... Plaintiffs-Appellants-Appellants

Versus

Shila Devi & Ors.

.... .... Defendants-Respondents-Respondents =========================================================== Appearance :

For the Appellant/s : Mr. Dhruv Narain, Sr. Advocate Mr. Surendra Pd. Singh No.4, Advocate with him. For the Respondent/s : Mr. S.S.Dvivedi, Sr. Advocate Mr. Jitendra Kumar Pandey, Advocate with him. =========================================================== CORAM: HONOURABLE MR. JUSTICE MUNGESHWAR SAHOO CAV JUDGMENT

Date:07-08-2012

Mungeshwar The plaintiffs have filed this appeal against the judgment Sahoo, J.

and decree dated 25.09.1989 passed by Sri G.S. Choube, 1st A.D.J., Rohtas at Sasaram in Title Appeal No.128 of 1979/12 of 1989 dismissing the appeal and confirming the trial court judgment and decree dated 25.07.1979 passed by 2nd Additional Sub Judge, Sasaram in Title Suit No.1243 of 1970/105 of 1979 dismissing the plaintiff's suit.

(2) The original plaintiff, Harendra Kumar filed the suit for declaration of title and recovery of possession with respect to suit property and further prayed that the deed of cancellation dated Patna High Court SA No.514 of 1989 dt.07-08-2012 2/11

02.09.1970 executed by defendant no.1 be declared as null and void and further prayed that on payment of Rs.900 which is the balance amount of the consideration money, the defendant may be directed to deliver the original sale deed after making the endorsement on the receipt and in the alternative, prayed for a decree for specific performance of contract of sell on terms and conditions as mentioned in the sale deed on payment of Rs.900.

(3) The plaintiff's case in short is that the defendant no.1 agreed to sell the Schedule B land to the plaintiff for a sum of Rs.5,000 and on the basis of the agreement, a sale deed was executed on 22.08.1970. Rs.300 was paid to the defendant and Rs.4,700 was agreed to be paid to the defendant at the time of endorsement of registration receipts/exchange of equivalent. It is agreed that title will pass on the registration of the sale deed. At the time of registration, the plaintiff offered the balance money of Rs.4,700 but the defendant received only Rs.3,800 and requested that the remaining amount of Rs.900 may be paid at the time of Puja Holidays. The plaintiff approached the defendant many times for receiving the balance consideration of Rs.900 and hand over the registration receipt and also sent notice on 28.09.1970 but he learnt that the defendant had already cancelled the sale deed on 02.09.1970.

(4) The defendant's case is that the agreement was that Patna High Court SA No.514 of 1989 dt.07-08-2012 3/11

title will pass on the payment of entire consideration amount and it was agreed that at the time of registration, Rs.4,700 was to be paid before the Registrar but the plaintiff said that remaining Rs.900 will be paid at his residence on the same evening but never paid the same and, therefore, he cancelled the sale deed.

(5) The trial court recorded the finding that plaintiff did not acquire any title to the suit land by mere execution and registration of the sale deed and, therefore, he is not entitled for recovery of possession. So far prayer for specific performance of contract is concerned, it was not pressed by the appellant. Accordingly, the suit was dismissed. On appeal, the appellate court recorded the finding that title did not pass on mere execution and registration of the document as the passing of title was dependent on payment of full and entire consideration money. The appellate court also recorded that by no stretch of imagination, it can be said that payment of Rs.900 was differed to some future date at the instance of the defendant no.1 rather it was differed at the instance of the plaintiff. The story of tender of Rs.900 to the defendant no.1 by the plaintiff is unacceptable and the plaintiff not having tendered the same of Rs.900 prior to the cancellation of document, could not get the title of the property since the plaintiff abandoned his claim for specific performance of contract by not pressing issue no.7 showed his Patna High Court SA No.514 of 1989 dt.07-08-2012 4/11

unwillingness to perform his part of the contract. Accordingly, dismissed the suit.

(6) On 27.03.1990, the following two substantial questions of law were formulated:

I. Whether if the vendee pays the major portion of the consideration money and also tenders the remaining portion within reasonable time, which is refused by the court the right accrues to the vendee and he becomes the title holder or not?

II. Whether the registered instrument can be cancelled by another registered instrument?

(7) The learned senior counsel, Mr. Dhruv Narain appearing on behalf of the appellant submitted that only Rs.900 was remained to be paid which was offered by the appellant but the defendant-respondent avoided and ultimately within 11 days, cancelled the sale deed unilaterally. According to the learned counsel, the appellate court should have also considered the grant of decree of specific performance of contract directing the defendant to receive the balance consideration of Rs.900 and hand over the registration receipt. The plaintiff had prayed alternative relief of specific performance of contract and there was no bar in granting specific performance but because of mistake, on the part of the Advocate appearing on behalf of the appellants without consent of the appellant, issue no.7 was not Patna High Court SA No.514 of 1989 dt.07-08-2012 5/11

pressed before the trial court which was pressed before the appellate court but the appellate court wrongly refused to decide the said issue. (8) On the other hand, the learned senior counsel, Mr. S.S.Dvivedi submitted that before the trial court specifically, the Advocate of the appellant did not press intentionally issue no.7 regarding decree for specific performance as such, it will amount to abandonment of the said relief. The ground taken by the appellant that without consent, the Advocate did not press issue no.7 is concerned, no such ground has been taken in the memo of appeal nor such substantial question of law has been formulated. Moreover, both the courts below disbelieved the case of tender of Rs.900 to the defendant-respondent. In such circumstances, when the plaintiff has been held that he was not all along ready, there was no question of grant of decree for specific performance arises. The learned counsel further submitted that the intention of the parties was that title will pass only after payment of full consideration amount and both the courts below recorded the finding that full consideration amount was not paid. Therefore, title did not pass. In such circumstances, the substantial questions of law formulated do not arise for consideration in this appeal.

(9) So far the first substantial question of law is concerned, the courts below have recorded the finding that the Patna High Court SA No.514 of 1989 dt.07-08-2012 6/11

intention of the parties was that title will pass only after payment of full consideration amount. Admittedly, Rs.900 was not paid by the appellant. The appellate court recorded a finding of fact that the story of tender by the appellant of Rs.900 is not acceptable. Therefore, this is a finding of fact. In view of the above facts, the question arises as to whether title will pass on mere registration of the sale deed particularly when the registration receipt was never handed over to the plaintiff. The registered sale deed is not in possession of the appellant and appellate court came to the conclusion that the plaintiff is also not in possession of the suit property. In similarly situated case, the Apex Court in the case of Janak Dulari Devi and another vs. Kapildeo Rai and another, (2011) 6 Supreme Court Cases 555, the Apex Court has held that:

"As per practice of ta khubzul badlain prevalent in Bihar(that is, title to the property passing to the purchaser only when there is exchange of

equivalents), where a sale deed recites that the entire sale consideration has been paid and

possession has been delivered, but the registration receipt is retained by the vendor and possession of the property is also retained by the vendor, as the agreed consideration(either full or a part) is not received, irrespective of the recitals in the sale deed, the title would not pass to the purchaser, till payment of the entire consideration to the vendor and the registration receipt is obtained by the purchaser in exchange. In such cases, on the sale deed being executed and registered, the

registration receipt (which is issued by the Sub- Registrar) authorizing the holder thereof to receive the registered sale deed on completion of the Patna High Court SA No.514 of 1989 dt.07-08-2012 7/11

registration formalities, is received and retained by the vendor and is not given to the purchaser. The vendor who holds the registration receipt will either receive the registered document and keep the original sale deed in his custody or may keep the registration receipt without exchanging it for the registered document from the Sub-Registrar, till payment of consideration is made. When the purchaser pays the price (that is, the whole price or part that is due) on or before the agreed date, he receives in exchange, the registration receipt from the vendor entitling him to receive the original registered sale deed, as also the possession. If the payment is not made as agreed, the vendor could repudiate the sale and refuse to deliver the registration receipt/registered document, as the case may be, which is in his custody, and proceed to deal with the property as he deems fit, by ignoring the rescinded sale.

The effect of such transactions in Bihar is

that even though the duly executed and registered sale deed may recite that the sale consideration has been paid, title has been transferred and

possession has been delivered to the purchaser, the actual transfer of title and delivery of possession is postponed from the time of execution of the sale deed to the time of exchange of the registration receipt for the consideration, that is, ta khubzul badlain.

The practice of ta khubzul badlain(of title

passing on exchange of equivalents) is prevalent only in Bihar. Normally, the recitals in a sale deed about transfer of title, receipt of consideration and delivery of possession will be evidence of such acts and events; and on the execution and registration of the sale deed, the sale would be complete even if the sale price was not paid, and it will not be possible to cancel the sale deed unilaterally. The practice of ta khubzul badlain in Bihar recognizes that a duly executed sale deed will not operate as a transfer in praesenti but postpones the actual transfer of title, from the time of execution and registration of the deed, to the time of exchange of equivalents, that is, registration receipt and the Patna High Court SA No.514 of 1989 dt.07-08-2012 8/11

sale consideration, if the intention of the parties was that title would pass only on payment of entire sale consideration. As a result, until and unless the duly executed and registered sale deed comes into the possession of the purchaser, or until the right to receive the original sale deed is secured by the purchaser by obtaining the registration receipt, the deed of sale merely remains an agreement to be performed and will not be a completed sale. But in States where such a practice is not prevalent, possession of registration receipt by the vendor, may not, in the absence of other clear evidence, lead to an inference that consideration has not been paid or that title has not passed to the purchaser as recited in the duly executed deed of conveyance. Where the purchaser is from an

outstation, the vendor being entrusted with the registration receipt, to collect the original sale deed and deliver it to the purchaser, is common." (10) In view of the above proposition of law laid down by the Apex Court, in my opinion, 1st substantial question of law has already been settled by the Apex Court which is binding on this court. It needs no further decision. Both the courts below have recorded that title did not pass.

(11) When title did not pass on the plaintiff whether there was cancellation deed or no cancellation deed, it does not make any difference to the plaintiff-appellant and on the basis of sale deed, the plaintiff's title cannot be declared even if it is held that unilaterally the sale deed would not have been cancelled. Therefore, the substantial question no.2 does not arise for decision in this case. (12) So far the claim of decree for specific performance Patna High Court SA No.514 of 1989 dt.07-08-2012 9/11

is concerned, admittedly, the same was abandoned before the trial court. Specific order was passed by the trial court and in the judgment also, the trial court recorded that the appellant specifically abandoned this relief. In such circumstances, the appellant himself precluded the trial court from investigating the question of fact. It may be mentioned here that the original plaintiff was an Advocate. Considering the materials available on record, the appellate court found that once the claim was abandoned, the appellant cannot be allowed to re-agitate the same. It is well settled principles of law that a party cannot be allowed to aprobate and reprobate. Moreover, the lower appellate court has clearly held that the tender of money by the appellant to the respondent is not acceptable. The case of the appellant that he tendered the money before the Registrar has been disbelieved by the appellate court. The appellate court categorically found that prior to cancellation of the deed, the plaintiff never tendered the balance consideration amount. In other words, the plaintiff failed to prove that he was all along ready and willing to perform his part of the contract. Mere pleading of readiness and willingness is not sufficient for the grant of decree for specific performance.

(13) In the case of (R.C. Chandiok and another vs. Chuni Lal Sabharwal and others), (1970) 3 Supreme Court Cases Patna High Court SA No.514 of 1989 dt.07-08-2012 10/11

140 and in the case of P. D'Souza vs. Shondrilo Naidu, (2004) 6 Supreme Court Cases 649 and in the case of N.P. Thirugnanam(Dead) by LRs. vs. Dr. R. Jagan Mohan Rao and others, (1995) 5 Supreme Court Cases 115, the Apex Court has already decided the scope of Section 16(c) and held that readiness and willingness cannot be treated as a straight jacket formula. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. If the plaintiff fails to either ever or prove the same, he must fail. The court should takes into consideration the conduct of the plaintiff. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available right from the date of the execution till date of the decree and he must prove that he is ready and has always been willing to perform his part of the contract. Recently, the Apex Court relying on the aforesaid decisions has expressed the same view in the case of Narinderjit Singh vs. North Star Estate Promoters Limited, (2012) 5 Supreme Court Cases 712. (14) In view of the above well settled principles of law, in the present case, in view of the finding of the courts below that the plaintiff did not tender Rs.900 prior to cancellation of the deed, it cannot be held that the plaintiff was all along ready to perform his part of the contract. Moreover, the plaintiff has already abandoned this Patna High Court SA No.514 of 1989 dt.07-08-2012 11/11

relief. In view of the above position of law, the plaintiff-appellant is also not entitled for consideration regarding as to whether he is entitled for the grant of decree of specific performance of contract. (15) In view of the above discussion, none of the substantial questions of law raised by the appellant is involved for decision in this appeal as it is well settled principles of law that a question of law for being considered as substantial question of law must be debatable one and must not have been settled either by a statute or by any binding precedent. Here, all the questions raised by the appellants have already been settled by the binding precedents as discussed above. Therefore, the substantial questions of law formulated and the substantial questions raised are answered against the appellants.

(16) In the result, this Second Appeal is dismissed. No order as to cost.

(Mungeshwar Sahoo, J)

Saurabh/A.F.R.