1. This Appeal under Section 100 of the Code of Civil Procedure is filed by the original defendant who has lost before both the Courts below.
2. This appeal was earlier allowed by judgment dated 29.8.2002. The said judgment was challenged by the respondent by filing Civil Appeal No. 5614 of 2006 [SLP(C) No.7514 of 2003] before the Hon’ble Supreme Court. The Hon’ble Supreme Court set aside the said judgment of this Court and remitted the matter for disposal in accordance with law. This appeal is, therefore, placed before this Court to decide afresh.
3. The respondent-plaintiff had filed Civil Suit No.222 of 1973 to recover possession of the suit house from the defendant. The case of the plaintiff in the suit is that he was in need of money and demanded money from the defendant. The defendant agreed to give money and asked the plaintiff to execute agreement to sell (Banakhat) in respect of the suit house in his favour. The plaintiff received Rs.900/- from the defendant and executed agreement to sell in his favour on 29.12.1962. In the agreement to sell, it is provided that on repayment of Rs.900/- by the plaintiff, defendant shall deliver back possession of the suit house to the plaintiff. It is further case of the plaintiff that the suit house remained in possession of the defendant in lieu of interest on an amount of Rs.900/- and when the plaintiff was ready to repay amount of Rs.900/-, he served a notice asking the defendant to deliver possession of the suit house by accepting Rs.900/- from him in terms of the agreement between the parties. Defendant, however, gave evasive reply and did not give possession to the plaintiff. The plaintiff, therefore, filed present suit seeking recovery of possession of the suit house from the defendant by directing the defendant to accept Rs.900/- from the plaintiff.
4. The suit was resisted by the defendant by filing written statement at Exh.10, stating therein that amount of Rs.900/- was not given by the plaintiff by way of loan but the said amount was given on executing agreement to sell by the plaintiff with possession of the suit house. It is further stated that after execution of the agreement to sell, defendant further paid Rs.300/- to the plaintiff and thus the plaintiff received full amount of consideration from the defendant but the plaintiff did not execute sale deed in favour of the defendant.
5. On the basis of the pleadings, learned Trial Judge framed following issues at Exh.12 and recorded his findings against each of the issues, which are mentioned below:-
(1) Whether plaintiff proves the suit Banakhat of the suit property dt.29.12.62.
(2) Whether plaintiff proves that he took a loan only Rs.900/- from the defendant by way of the suit Banakhat of 29.12.62 ?
(3) Whether the plaintiff proves that the possession of the suit property was given to the deft. In lime of interest of Rs.900/- received by the plaintiff from the defendant ?
(4) Whether defendant is enjoying the possession of the suit property as its absolute owner ?
(5) Whether the plaintiff proves the terms of reconveyance of the suit property as alleged ?
(6) Whether the plaintiff is entitled to recover the possession of the suit property from the defendant on payment of Rs.900/- ?
(7) Whether defendant proves the payment of full consideration of the suit property ?
(8) Whether deft. is the owner of the suit property ?
(9) Whether the plaintiff had no right, title or interest in the suit property ?
(10) Whether the plaintiff is entitled to the mesne profit as prayed for ?
(11) Whether the suit is in the present form is not maintainable ?
(12) Whether the suit is time barred ?
(13) What order and decree ?
Findings of the Trial Court to the said issues are as under:-
(1) Not proved
(2) Not proved
(3) Not proved
(4) Not proved
(5) Not proved
(6) proved
(7) Not proved
(8) Not proved
(9) Not proved
(10) No
(11) It is maintainable
(12) No
(13) As per final order
6. Before Trial Court, parties led oral evidence and also produced on record notice given by the plaintiff at Exh.43 and acknowledge thereof at Exh.44 and copy of the agreement at Mark 19/1. On the basis of the appreciation of the evidence, learned Trial Judge came to the conclusion that since agreement was not registered, same was not admissible in evidence and it cannot be said that the plaintiff has proved agreement dated 29.12.1962. Learned Trial Judge observed that though his predecessor had by interim order decided the document mark 19/1 to be a conditional mortgage but it was an agreement to sell. However, learned Trial Judge was of the opinion that since he was not sitting in appeal over the above-said decision of his predecessor, earlier order was binding to him. Learned Trial Judge further came to the conclusion that in any case, the defendant has failed to prove payment of remaining amount under the said agreement and he could not therefore, derive any title on the basis of the said agreement as the said agreement in noway could be said to be a concluded contract between the parties. Learned Trial Judge further came to the conclusion that since there is term in the agreement for return of possession of the suit house to the plaintiff on plaintiff repaying Rs.900/- to the defendant, the plaintiff is entitled to recover possession of the suit house on payment of such amount. Learned Trial Judge thus allowed the suit partly and ordered the defendant to handover possession of the suit house to the plaintiff after receipt of Rs.900/- from the plaintiff. Claim of the plaintiff for mesne profit was disallowed.
7. The appellant, therefore, filed Civil Appeal No.40 of 1977 before the first Appellate Court. Before the first Appellate Court, it was contended on behalf of the appellant that the document mark 19/1 dated 29.12.1962 was a simple agreement to sell and should be admitted in evidence. It was specific contention of the appellant that the said document did not create any interest in the property and therefore, did not require any registration. Accepting the contention of the learned advocate for the appellant, and on perusal of the agreement, learned Judge came to the conclusion that it was a simple agreement to sell and it did not create any interest in the immovable property and even the respondent conceded that the document was an agreement to sell and did not require registration. Learned Appellate Judge thus held that the document mark 19/1 dated 29.12.1962 was admissible in evidence.
8. Proceeded on the above-said basis, learned Appellate Judge then on appreciation of the evidence available on record found that the defendant has failed to prove that he has paid remaining amount of consideration to the plaintiff and the Trial Court, therefore, has rightly held that the defendant has failed to prove that he had become full and absolute owner of the suit house. Learned Appellate Judge also observed that since the plaintiff was ready and willing to repay Rs.900/- taken from the defendant, the plaintiff was entitled to get back the possession of his suit house. In respect of the contention of the learned advocate for the appellant that the appellant held possession of the suit house in part performance of the contract, learned Appellate Judge came to the conclusion that provisions of Section 53A of the Transfer of Property Act could be attracted only when there was concluded contract between the parties and the person holding agreement to sell was found to have complied with his part of the contract. Learned Appellate Judge has recorded that the defendant has not proved that he has paid remaining amount of consideration of Rs.300/- to the plaintiff. On the above-said findings and reasoning, ultimately, learned Appellate Judge dismissed the appeal by judgment and decree dated 31.3.1978.
9. This appeal was admitted by order dated 5.12.1978 on the substantial questions of law framed in the appeal memo. Substantial questions of law found from the appeal memo are as under:-
“(1) Whether in the facts and circumstances of the case, Lower Courts erred in holding that defendant had agreed to deliver the possession of the suit house back on repayment of Rs.900/- even though the Agreement to Sell dated 29.12.1962 does not contain term of reconveyance of the property.
(2) Whether in the facts and circumstances of the case lower Courts erred in interpreting the document dated 29.12.1962.”
10. I have heard learned advocates for the parties.
11. Learned advocate Shri J.M. Patel for the appellant submitted that agreement to sell dated 29.12.1962 was since not exhibited and remained as mark document, cannot be read in evidence. He submitted that though agreement to sell when executed in the year 1962 was not required to be compulsorily registered but by virtue of the amendment, in the Registration Act, for the State of Gujarat, in the year 1982, registration of agreement to sell is made compulsory and after the amendment, if unregistered agreement to sell is not registered, same cannot be read in evidence. He submitted that as per the settled principles of law, subsequent development in law is required to be considered especially when this appeal concerning the agreement to sell was already pending. Mr. Patel submitted that agreement to sell dated 29.12.1962 does not contain term of re- conveyance of the suit house. Mr. Patel pointed out that what is provided in the agreement to sell is that if before execution of the sale deed, the plaintiff repays amount of earnest money of Rs.900/- to the defendant, agreement to sell shall not be used. He submitted that since the defendant has already paid remaining amount of Rs.300/- to the plaintiff, agreement to sell has become concluded contract between the parties and therefore, in absence of any clause for re-conveyance in the agreement to sell, the plaintiff shall not be entitled to recover possession of suit house from the defendant. Mr. Patel submitted that though learned Appellate Judge has recorded that the appellant contended that agreement to sell was admissible in evidence as no registration was required, such contention of the appellant could not be taken as admission of the appellant as the same was against the provisions of law. He submitted that when time was provided to get registration of unregistered document, amending provision would have retrospective effect and if after amendment in the Registration Act, unregistered agreement to sell is not registered within the prescribed time limit provided in the amending Act, such agreement to sell could not be read in evidence when the matter is pending before the Court of law. He thus submitted that the Courts below have committed grave error in reading the unregistered agreement to sell in evidence and in allowing the suit of the plaintiff on the basis of such agreement. In support his arguments, learned advocate for the appellant relied on the decision in the case of Lakshmi Narayan Guin and others Vs. Niranjan Modak reported in AIR 1985 SC 111 and in the case of Suraj Lamp and Industries Private Limited (2) Through Director Vs. State of Haryana and Another reported in (2012)1 SCC 656.
12. As against the above arguments advanced by learned advocate Mr. Patel for the appellant, learned advocate Shri Maulik Nanavati appearing for the respondent-plaintiff submitted that the appellant cannot be permitted to go against his own contention before learned Appellate Judge. He submitted that before learned Appellate Judge, the appellant has candidly accepted the agreement to sell as simple agreement not creating any interest in the immovable property and thus agreed to read the document in evidence by exhibiting mark document of the agreement to sell. Mr. Nanavati submitted that considering the contention of the appellant himself and having perused the agreement to sell, learned Appellate Judge came to the conclusion that document mark 19/1 was a simple agreement and did not create any interest in the property of suit house. Mr. Nanavati submitted that learned Appellate Judge has also considered that though the predecessor of learned Trial Judge had recorded in his interim order that document mark 19/1 could be a document of conditional mortgage, but learned Trial Judge while deciding the suit was of the view that it could be only agreement to sell, which appears to be a correct reading and construction of document mark 19/1. Mr. Nanavati submitted that reading the contents of the document also, it leaves no doubt that it was a simple agreement to sell, whereunder the defendant had paid Rs.900/- after fixing Rs.1200/- to be consideration of the suit house and it was provided that if plaintiff repaid Rs.900/- before execution of sale deed, agreement to sell shall not be used. Mr. Nanavati submitted that when the suit filed by the plaintiff was on the basis of his title to the property, no restrictive meaning could be given to the agreement and the document since not required to be registered at all at the relevant time, would not be rendered inadmissible simply because there is subsequent amendment in the law for registration. Mr. Nanavati submitted that amendment in Section 17 of the Registration Act is not retrospective but is retroactive. He submitted that unless the Legislature so expressly intended to make amending provisions applicable retrospectively, amendment is always applicable prospectively. For this purpose, Mr. Nanavati relied on the decisions in the case of Panchi Devi Vs. State of Rajasthan and others reported in (2009)2 SCC 589 and in the case of Bihar State Council of Ayurvedic and Unani Medicine Vs. State of Bihar and others reported in (2007)12 SCC 728.
12.1. Learned advocate Mr. Nanavati further submitted that the suit is basically for the purpose of recovery of the suit house, on the ground that the plaintiff is owner of the suit property and the defendant, who claims to retain possession under the agreement, on which the plaintiff relies, cannot be heard to say that the plaintiff is not entitled to seek possession of the suit house on the basis of unregistered document. Mr. Nanavati submitted that as per the settled principle of law, pleadings are to be liberally construed and entitlement of the parties under the law cannot be frustrated because of the loose pleadings. He submitted that the plaintiff has filed suit on the basis of his entitlement to the property and to recover suit house from the defendant who continued to hold possession of the suit house contrary to the agreement accepted by him though the plaintiff is ready to repay the amount in terms of the agreement to the defendant. On the issue of liberal construction of pleading, Mr. Nanavati placed reliance on the decision in the case of Des Raj and others Vs. Bhagat Ram (Dead) By LRs and others reported in (2007)9 SCC 641.
12.2. Mr. Nanavati further submitted that though by interim order, predecessor of learned Trial Judge had construed the document to be conditional mortgage but reading the contents of the document, learned Trial Judge as well as learned Appellate Judge both have rightly construed the document to the document of agreement to sell. Mr. Nanavati also submitted that the defendant would not be entitled to the benefit of the provisions of Section 53A of the Transfer of Property Act as the defendant had failed to prove that agreement to sell became completed contract between the parties. Ultimately, Mr. Nanavati urged to dismiss the appeal by submitting that the Courts below have not committed any error in appreciating the evidence available on record and in construing the document at mark 19/1.
13. I have perused the judgment and decree passed by both the Courts below. I have also read the contents of the document mark 19/1, which is now exhibited and admitted in evidence as per the final order of the learned Appellate Judge.
14. There is no dispute about the fact that the plaintiff is owner of the property. There is also no dispute about the fact that agreement dated 29.12.1962 was entered into between the parties. The defendant claims his right of possession and ownership of the suit house on the basis of this very agreement. It is case of the defendant that as per the terms of agreement, he had further paid Rs.300/- to the plaintiff and thus made full payment of consideration of the suit house and therefore, he gets absolute right of ownership to the suit house. Therefore, when the defendant himself does not dispute the existence of such agreement, there cannot be any impediment in reading the document of agreement in evidence to decide the rights of the parties.
15. Contention raised by learned advocate Mr. Patel for the appellant that agreement at mark 19/1 was since not registered was not admissible in evidence is nothing but dishonest plea. It is required to be noted that this very appellant before the first Appellate Court consciously took up a stand and contended that document mark 19/1 dated 29.12.1962 was a simple agreement creating no interest in the property. The appellant even conceded to exhibit the document and to treat the same admissible in evidence. Considering the contention of the appellant and perusing the agreement, learned Appellate Judge found that agreement is simple agreement to sell between the parties and the same was not required to be registered and therefore, was admissible in evidence. However, to allay any doubt about the correct reading of the agreement between the parties, I have also gone through the contents of the document mark 19/1. This document recites that the suit house is of the ownership of the plaintiff and the plaintiff has decided to give/sell out the suit house to the defendant for consideration of Rs.1200/-. The document further recites that the plaintiff had received Rs.900/- from the defendant as earnest money. Said document further provided that when the remaining is paid and before execution of sale deed, if earnest money is repaid by the plaintiff, this agreement to sell shall not be used by the defendant. Thus, though there is agreement between the parties for the purpose of sale of the suit house to the defendant, but said document clearly witnessed an unequivocal agreement and intention of the parties not to act upon and use such agreement for the purpose of execution of sale deed if before execution of sale deed, the plaintiff repays the amount of earnest money to the defendant. In my view, this was a simple agreement between the parties and could not be termed as mortgage with conditional sale. Therefore, learned Appellate Judge has rightly construed the said document to be a document of simple agreement, whereunder no right was created in favour of the defendant and the defendant was under obligation to give back possession of the suit house if the plaintiff offers repayment of Rs.900/- being amount of earnest money to the defendant before the stage of execution of sale deed. However, Mr. Patel submitted that by virtue of amending Act, 1982, instruments which purport or operate to effect any contract for transfer of immovable property, are required to be registered compulsorily and time for getting such unregistered document registered is also provided and therefore, such amending provision is to be read as having retrospective effect. He submitted that since amending provision was introduced when Second Appeal was pending before this Court, even if the Court below has held that the agreement is admissible in evidence, this Court is required to take into consideration subsequent change and development in law, whereunder agreement in question would in absence of registration be rendered inadmissible and considering the amending provision, the suit based on such inadmissible evidence, will be required to be dismissed. Mr. Patel submitted that when the suit is based on agreement to sell and when by virtue of subsequent change in law, such agreement would be rendered inadmissible, the plaintiff would not be entitled to any relief in the suit. In my view, rights of the parties are required to be decided on the basis of the law prevailing then. When suit and appeal both were decided, the agreement to sell was not required to be registered and therefore, the Appellate Court below has not committed any error in reading the document in evidence even though the document was not registered one. In the case of Lakshmi Narayan Guin (supra), the issue was as to whether change of law pending the appeal would extend benefit to the tenant under the provisions of the Tenancy Act. In the context of the fact situation, from the amending Act, the Court held that intention of the legislature was to deprive the Court of its jurisdiction to make order against tenant and to give benefit to the tenant. Therefore, change of law in the said case was construed for the benefit of the tenant and not to affect any change in respect of rights under other Laws. In the case of Suraj Lamp and Industries (supra), the Court in para 15 explained the advantages of registration and held that registration of document makes process of verification and certification of title easier and simpler. It reduces disputes and litigations to a large extent. In my view, these two judgments relied by learned advocate for the appellant would have no application because issues dealt with in these two judgments were in different fact situation and altogether on different aspects of the matter.
16. At this stage, decision of this Court in the case of Kaushik Rajendra Thakore Vs. Allied Land Corpn. And others reported in 1987(1) GLH (U.J.) 22, relied on by learned advocate Shri Nanavati is required to be referred. From the full text of the said decision, following paragraphs need to reproduced:-
“A new contention is advanced by learned advocate for the appellant that Section 17 of the Registration Act, 1908, is amended by Gujarat Act 7 of 1982, which makes the instruments which purport or operate to effect any contract for transfer of immovable property compulsorily registrable by adding Clause (aa) therein. The learned advocate for the appellant submitted that in view of the amendment introduced by Gujarat Act 7 of 1982, the amendment is given retrospective effect by Section (1A) of the Gujarat Act 7 of 1982, the result of which is that the agreement to sell in question (Exhibit 29) must be de- exhibited, with the further result that it would be devoid of any legal effect and the plaintiff would be debarred from basing any cause of action on such an agreement to sell. However, the answer to this contention is found in Section 49 of the Registration Act, 1908, which we reproduced below to appreciate its full effect:
“49. No document required by Section 17 (of any provision of the Transfer of Property Act, 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... unless it has been registered:
(PROVIDED that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1982, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1977, or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument)”.
The proviso to Section 49 of the Registration Act makes it abundantly clear that the suit of the plaintiff would not fail on the ground of compulsory registration introduced by amendment to Section 17 by Gujarat Act 7 of 1982. This contention was not originally raised in the trial proceedings, but we permitted the learned advocate for the appellant to argue on this contention, as it is purely a question of law. We reject the same contention, however, by relying on the proviso to Section 49 of the Registration Act, 1908.”
In my view, the issue about registration raised by learned advocate Mr. Patel is squarely covered by the above-said decision and no further discussion would be required.
In the case of Bihar State State Council (supra), Hon’ble Supreme Court has in para Nos.50 and 51 observed as under:-
“50. The provisions of Sections 13A, 13B and 13C of the 1970 Act as introduced by the Amending Act of 2003, if given retrospective operation, the medical qualification acquired from the study in the medical colleges which have been opened prior to the commencement of the Amending Act of 2003 and conferred medical qualification on the students who studied in such medical colleges, the degrees so conferred in the absence of the permission of the Central Government would be non est though there is no fault on the part of the students who have studied in the institutions which are recognized and affiliated to the Faculty under the 1951 Act.
51. In our opinion, where the legislature has used words in an Act which if generally construed, must lead to palpable injustice and consequences revolting to the mind of any reasonable man, the court will always endeavour to place on such words a reasonable limitation, on the ground that the legislature could not have intended such consequence to ensue, unless the express language in the Act or binding authority prevents such limitation being interpolated into the Act. In construing an Act, a construction ought not be put that would work injustice, or even hardship or inconvenience, unless it is clear that such was the intention of the legislature. It is also settled that where the language of the legislature admits of two constructions and if construction in one way would lead to obvious injustice, the courts act upon the view that such a result could not have been intended, unless the intention had been manifested in express words. Out of the two interpretations, that language of the statute should be preferred to that interpretation which would frustrate it. It is a cardinal rule governing the interpretation of the statutes that when the language of the legislature admits of two constructions, the court should not adopt the construction which would lead to an absurdity or obvious injustice. It is equally well settled that within two constructions that alternative is to be chosen which would be consistent with the smooth working of the system which the statute purported to be regulating and that alternative is to be rejected which will introduce uncertainty, friction or confusion with the working of the system. [See Collector of Customs v. Digvijaysinhji Spinning and Weaving Mills Ltd. (1962) 1 SCR 896, at page 899 and His Holiness Kesvananda Bharati v. State of Kerala, AIR 1973 SC 1461].”
In light of the above, I cannot agree with the contention of learned advocate Mr. Patel that document mark 19/1 was not admissible in evidence as the same was not registered one.
17. In fact, the above was the main contention raised by learned advocate Mr. Patel . However, substantial questions of law raised by this Court at the time of admission of the appeal still need to be answered. As regards second substantial question of law, I have already discussed and held that on true and correct construction of document dated 29.12.1962, the same is a simple agreement to sell and cannot be said to be a document of conditional mortgage. So far as first substantial question of law is concerned, the terms of the agreement need to be considered. The agreement recites that if the plaintiff repays the amount of earnest money before the stage of execution of sale deed, the agreement shall not be used or acted upon. It is true that there is no recital about re-conveyance of the property to the plaintiff. Such term of re-conveyance is generally found in document of mortgage with conditional sale or sale with condition to repurchase property. The document in question is not a document either of mortgage with conditional sale or a sale with condition to repurchase. Document is simple agreement to sell, wherein parties agreed and provided therein that if before execution of sale deed, owner of the property repays the earnest money, agreement to sell would not be implemented. Such clause/ term in the agreement was indicative of the clear intention of the parties that on repayment of earnest money before sale deed is executed, the defendant shall no longer use the agreement as a shield to continue with possession. The agreement shall stand come to an end and the plaintiff shall be entitled to get back the possession of his suit house. Such agreement to sell can never have and contain a clause for re- conveyance of the property because by such agreement, the rights and interests in the property are never conveyed. Therefore, in my view, the Court below has not committed any error in holding that the plaintiff has become entitled to recovery of possession of the suit house as agreed between the parties even though there is no term for re-conveyance of the property. The first question of law is thus answered accordingly.
18. Lastly, it is required to be considered as to whether the defendant could have claimed any benefit under Section 53A of the Transfer of Property Act. Learned Appellate Judge has come to the conclusion that agreement dated 29.12.1962 could not be said to be concluded contract and thus the defendant could not claim any right on the basis of the said provision. In my view, for two reasons, the defendant cannot claim any right to continue with possession of the suit house under the said provisions. First is, as rightly found by the Courts below, the defendant has not proved that he has performed his part of the contract because he has failed to establish that he has paid remaining amount of consideration. Secondly, under the agreement, the defendant did not get absolute right of transfer because the agreement itself provided one more term, whereby the defendant was prevented from using the agreement for the purpose of transfer of property if before the stage of execution of sale deed, defendant gets back his amount of earnest money. Therefore, in my view, even if the defendant was put into possession under the agreement, the contract was not completed between the parties and it was open to the plaintiff to exercise his right under the agreement in respect of the suit house before execution of sale deed. There is one more reason to hold that agreement was not a completed contract and the plaintiff was not debarred from enforcing his right. Section 53A of the Transfer of Property Act provides that right of transferee was subjected to other rights expressly provided by the terms of contract and that other right available to the plaintiff was to repay earnest money for not allowing the defendant to use agreement to sell for any purpose in respect of the suit house. Thus, in my view, under the provisions of Section 53A of the Transfer of Property Act, the defendant does not get any right whatsoever to defend his possession of the suit house.
19. In view of the above, the appeal is required to be dismissed. The same is dismissed accordingly.
omkar Sd/-
(C.L. SONI, J.)