Kaliaperumal vs Rajagopal & Anr

Kaliaperumal ... Appellant

Versus

Rajagopal & Anr. ... Respondents

JUDGMENT

J.M. Panchal, J.

1. The instant appeal is directed against judgment

dated November 27, 2001, rendered by the

learned single Judge of the High Court of

Judicature at Madras in Second Appeal No. 1435

of 1990 by which the decree dated January 23,

1987, passed by the learned Subordinate Judge

of Villupuram declaring the appellant to be owner

of the disputed property and directing the

respondents to hand over possession of the same 2 to the appellant with mesne profits at the rate of

Rs.2000/- per month with proportionate costs,

and affirmed (subject to the modification that

appellant will be entitled to possession only on

deposit of Rs.40,000/-) by the learned District

Judge, South Arcot District at Cuddalore vide

judgment dated December 15, 1988, rendered in

Appeal No. 55 of 1987, is set aside.

2. The facts emerging from the record of the case

are as under: -

The suit properties originally belonged to the

family of the respondents. First respondent (for

himself and his minor sons) and the second

respondent sold the properties to the appellant for a

consideration of Rs.43,000/- by a deed dated June 26,

1983. Out of the sale consideration of Rs.43,000/- a

sum of Rs.3,000/- was to be appropriated towards the

discharge of the mortgage executed by the respondents

in favour of the appellant. The balance of Rs.40,000/-

was to be paid before the Sub-Registrar at the time of 3 registration of the sale deed. It is the case of the

appellant that before the document could be presented

for registration, he paid to the respondents a sum of

Rs.25,000/- on 21.7.1983 as they required that

amount for purchasing a lorry, therefore, at the time of

registration of the sale deed he was required to pay

only the balance of Rs.15,000/- to the respondents. It

is the case of the appellant that as the respondents

had denied payment of Rs.25,000/- to them, he was

left with no other option but to present the document

for registration before the Sub-Registrar on

21.10.1983. On presentation of the document for

registration, the Sub-Registrar issued summons to the

respondents pursuant to which the first respondent

appeared before him. The first respondent admitted

execution of the deed but refused to put his thumb

impression or to sign the endorsement to be made on

the deed in token of admitting execution, on the

ground that the respondents were not paid the

remaining consideration of Rs.40,000/- as stipulated

in the deed. The Sub-Registrar registered the 4 document on October 26, 1983. According to the

appellant, ever since the date of the execution of the

sale deed and the date of its registration, he was ready

to tender the balance of consideration of Rs.15,000/-

but the respondents were unreasonably refusing to

receive the same and, therefore, he served a legal

notice calling upon them to hand over possession of

the properties sold and pay mesne profits. It is the

case of the appellant that after receiving part of the

consideration, the respondents did not deliver

possession of the properties to the appellant nor paid

mesne profits. Therefore, the appellant instituted O.S.

No. 144 of 1985 in the Court of learned District

Munsiff of Villupuram seeking declaration of title to

the suit properties. The appellant also prayed to direct

the respondents to hand over possession and to pay

past mesne profits of Rs.3,000/- and for an enquiry

into future mesne profits.

3. On service of summons the respondents

appeared and contested the suit filed by the

appellant. They denied having received 5 Rs.25,000/- as advance. In short the stand

taken by the respondents was that as the

appellant had not paid the balance consideration

of Rs.40,000/- as mentioned in the deed dated

June 26, 1983, the title never passed to the

appellant and , therefore, the suit for declaration

of title to the suit properties and possession

thereof was not maintainable.

4. Necessary issues for determination were framed

by the trial court. The parties led evidence in

support of their respective claims. On

appreciation of evidence adduced by the parties

the trial court held that the appellant had failed

to prove that he had paid a sum of Rs.25,000/-

to the respondents on 21.7.1983. The trial court,

however, held that the appellant had acquired

title to the suit properties when the sale deed

dated June 26, 1983 was duly registered and was

entitled to declaration of his title as well as

possession of the suit properties with mesne

profits. According to the trial court, remedy of 6 the respondents was only to sue the appellant for

recovery of the consideration mentioned in the

deed but they were estopped from denying his

title. Therefore, the trial court decreed the suit

by judgment dated January 23, 1987.

5. Feeling aggrieved the respondents preferred

Appeal No. 55 of 1987 in the District Court South

Arcot District at Cuddalore. The learned District

Judge also held that title of the appellant to the

suit properties was established in view of the

execution of sale deed and its registration, but he

was not entitled to mesne profits. After holding

that the appellant had failed to prove the

payment of Rs.25,000/- he held that the

appellant was due in respect of the balance

consideration of Rs.40,000/- to the respondents.

The learned District Judge clarified that the

appellant would be entitled to possession of the

suit properties only after he deposited the said

Rs.40,000/- and that the respondents will be

entitled to draw the said amount from the court. 7 Thus the learned District Judge partly allowed

the appeal of the respondents by judgment and

order dated December 15, 1988.

6. Thereupon the respondents invoked jurisdiction

of the High Court by way of filing second appeal

under Section 100 of the Code of Civil Procedure,

1908. The High Court was of the view that the

intention of the parties was that title would not

pass to the appellant till the full consideration

was paid by him to the respondents and that title

to the suit properties never passed to the

appellant as he had not paid full consideration to

the respondents. Therefore, the High Court set

aside the decree passed by the trial court, as

confirmed by the first appellant court, and

dismissed the suit filed by the appellant, by its

judgment dated November 27, 2001 giving rise to

the instant appeal by special leave.

7. We have heard the learned counsel for the parties

at length and considered the evidence - oral and 8 documentary, forming part of the record. The

question posed for our consideration is whether

title to the disputed properties passed to the

appellant when the sale deed dated 26.6.1983

was registered on October 26, 1983, though

admittedly no amount was paid towards

consideration to the respondents.

8. Sale is defined as being a transfer of ownership

for a price. In a sale there is an absolute transfer

of all rights in the properties sold. No rights are

left in the transferor. The price is fixed by the

contract antecedent to the conveyance. Price is

the essence of a contract of sale. There is only

one mode of transfer by sale in regard to

immovable property of the value of Rs.100/- or

more and that is by a registered instrument. It is

now well settled that payment of entire price is

not a condition precedent for completion of the

sale by passing of title, as Section 54 of Transfer

of Property Act, 1882 (`Act' for short) defines `sale'

as a transfer of ownership in exchange for a price 9 paid or promised or part paid and part promised.

If the intention of parties was that title should

pass on execution and registration, title would

pass to the purchaser even if the sale price or

part thereof is not paid. In the event of non-

payment of price (or balance price as the case

may be) thereafter, the remedy of the vendor is

only to sue for the balance price. He cannot

avoid the sale. He is, however, entitled to a

charge upon the property for the unpaid part of

the sale price where the ownership of the

property has passed to the buyer before payment

of the entire price, under Section 55(4)(b) of the

Act. Normally, ownership and title to the

property will pass to the purchaser on

registration of the sale deed with effect from the

date of execution of the sale deed. But this is not

an invariable rule, as the true test of passing of

property is the intention of parties. Though

registration is prima facie proof of an intention to

transfer the property, it is not proof of operative 10 transfer if payment of consideration (price) is a

condition precedent for passing of the property.

The answer to the question whether the parties

intended that transfer of the ownership should be

merely by execution and registration of the deed

or whether they intended the transfer of the

property to take place, only after receipt of the

entire consideration, would depend on the

intention of the parties. Such intention is

primarily to be gathered and determined from the

recitals of the sale deed. When the recitals are

insufficient or ambiguous the surrounding

circumstances and conduct of parties can be

looked into for ascertaining the intention, subject

to the limitations placed by Section 92 of

Evidence Act.

9. In this case, the execution of the sale deed on

June 26, 1983 is not in dispute. The said

instrument was presented for registration on

October 21, 1983 and registered on October 26,

1983, as the first respondent/vendor appeared 11 before the Sub-Registrar and admitted that the

vendors had executed the documents, but

refused to make an endorsement to that effect on

the deed as the vendors had not received the

balance consideration of Rs.40,000/-. Applying

the above mentioned principles to the facts of

this case, we find that the parties intended that

ownership of the property would be transferred to

the appellant only after receipt of the entire

consideration by the vendors, as a condition

precedent. The operative portion of the sale deed

clearly states that the vendors have agreed to

receive Rs.40,000/- in the presence of the Sub-

Registrar on the date of the registration of the

sale deed and that in consideration of payment to

be so made, the property was being conveyed to

the purchaser. This makes it clear that the title

was intended to pass only on the payment of

balance consideration of Rs.40,000/- in the

presence of the Sub-Registrar. This is also

supported by the evidence of DW-1 to DW-4. The 12 Sub-Registrar has also clearly recorded that no

amount was tendered or paid by the purchaser to

the vendors in his presence. Therefore title in

fact did not pass either on execution or

registration of the sale deed. There is yet another

circumstance to show that title was intended to

pass only after payment of full price. Though the

sale deed recites that the purchaser is entitled to

hold, possess and enjoy the scheduled properties

from the date of sale, neither the possession of

the properties nor the title deeds were delivered

to the purchaser either on the date of sale or

thereafter. It is admitted that possession of the

suit properties purported to have been sold under

the sale deed was never delivered to the appellant

and continued to be with the respondents. In

fact, the appellant, therefore, sought a decree for

possession of the suit properties from the

respondents with mesne profits. If really the

intention of the parties was that the title to the

properties should pass to the appellant on 13 execution of the deed and its registration, the

possession of the suit properties would have been

delivered to the appellant.

10. All the three courts have also concurrently found

that the appellant had pleaded a false case that

he had paid a part of the balance consideration,

that is, Rs.25,000/- on July 21, 2003 to the

respondents to enable them to purchase lorry.

This case of the appellant was disbelieved by the

trial court as well as the first appellate court

which is the final court of facts. That finding was

not challenged by the appellant before the High

Court. From the averments made in the plaint it

is evident that the appellant was ready and

willing to make payment of only Rs.15,000/- and

not Rs.40,000/-. He had never shown his

readiness or willingness to make payment of

Rs.40,000/- which was the balance of the

consideration and which had to be paid only in

the presence of the Sub-Registrar, as mentioned

in the deed. Therefore, the first respondent who 14 was present before the Sub-Registrar on behalf of

the respondents on October 26, 1983, was

justified in not signing or affixing his thumb

mark in the endorsement of registration to be

made on the deed, by the Sub-Registrar.

11. Therefore, on the facts and in the circumstances

of the case, we are of the considered view that the

parties really intended that title of ownership to

the suit properties would pass to the purchaser,

only after payment of full consideration by the

purchaser to the vendor as a condition precedent.

Parties did not intend that there should be

transfer of ownership merely on execution and

registration of the deed. The trial court and first

appellate court having misinterpreted the legal

position, the High Court rightly set aside the

decree passed in favour of the appellant and

dismissed the suit. No ground is made out by

the appellant to interfere with the decision of the

High Court. Therefore, the appeal, which is

devoid of merits, deserves dismissal. 15

12. For the foregoing reasons the appeal fails and is

dismissed. There shall be no order as to costs.

............................J. [R.V. Raveendran]

............................J. [J.M. Panchal] New Delhi;

February 20, 2009.