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Second Appeal No. 340 or 1951, decided on 18th March. 1953 from the decree of Iqbal Ahmad, Senior Civil Jud e, Guj rat, dated the 27th August 1951, reversing that of Hameed Ullah, Civil Judge, 1st Class Gujrat, dated the 20th July 1951.
Ss. 17 & 49‑Transfer‑ --Dispositive words necessary for operation of.
In order that a document may operate as a transfer either in the present or in the future there must be dispositive words. The executant must say expressly or by implication. "I transfer", although he may make the transfer conditional on the happen. ing of any particular event.
Where the dispositive word were "Arazi mazkura bala ke nisaf hissa ka dawa tha. Apne nisaf salim se 1/3 muzhira 2/3 maykuran ka hoga."
Held, that the document was not compulsorily registerable.
Hemanta Kumari Devi v. Midnapur Zamindari Co. I L R 47 Cal. 485 P C and Ida v. Muhammad Din A 1 R 1925 Lab. 78 distinguished.
Even if the document did require registration the respondents would not derive any benefit because under the proviso to section 49 of the Registration Act it would still be admissible in a suit for specific performance, The present suit is in fact a suit for specific performance though framed apparently a, a suit for possession.
S. 99‑--Objection on score of frame of suit‑-‑Not entertainable unless affecting merits‑ Suit for possession instead of for specific‑ performance‑ Whether permissible.
Where the objection was to the form of the suit, viz., that the document being only executory a suit for possession did not lie, the only remedy being a suit for specific performance.
Held, that the objection being to the form of the suit unless it could affect the decision of the case on merits it cannot be allowed to be taken in view of section 99 of the Code of Civil Procedure.
Umer Din v. Fazal Din P L D 1952 Lab. 166 ref.
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Agreement to transfer property in case of success of litigation, in consideration of funds received for financing same‑---To be examined most jealously by Court‑--Court's discretion to refuse relief‑Specific Relief Act (I of 1877), S. 22.
Mahmood Ali for Appellants.
Karam Ilahi Chuhan for Respondents.
This regular second appeal arises out of a suit brought by Khawaja and Mulkhu appellants against Nur Alam and Muhammad Alam respondents (and Allah Dad res pondent who is only pro forma) on the basis of an agreement executed by the mother of the respondents agreeing to transfer 2/3rd of the property for which she bad filed a suit against her paternal uncle in consideration of the plaintiff‑appellant's paying expenses of litigation. The trial Court decreed the suit. On appeal the learned Senior Subordinate Judge dismissed it and the plaintiffs have come tip in second appeal.
The facts giving rise to the suit may be shortly stated. Defendant‑respondents are maternal grandsons of one Wali Dad. On the death of Wali Dad his property was mutated in the name of his widow Mst. Bhagan and on her death in the name of his brother Allah Dad, the parties being governed by agricultural custom. At this Mst. Niamat Bibi, the mother of the defendant -respondents filed a suit for possession of the property against her uncle Allah Dad claiming to be a resident‑daughter of her father. This suit was decreed and an appeal by Allah Dad was dismissed. While a second appeal by Allah Dad was apprehended, the present plaintiff‑appellants, who are the husband's brothers of Mst. Niamat Bibi, entered into an agreement with her on the 4th April 1945, whereby she agreed to transfer to the appellants 2/3rd share of the land for which she had brought the suit in consideration of expenses of litigation already incurred and to be incurred. Allah Dad did file an appeal which was dismissed and on the 2nd August 1950 the appellants filed the present suit for the promised 2/3rd share of the property left by Wali Dad against defendant‑respondents who are the sons and heirs of Mst. Niamat Bibi, who died in the meantime.
The defendants denied the existence, legality and the admis sibility of the agreement and pleaded also that the appellants had not incurred any expense in the previous suit. On the parties' pleadings the following issues were framed:‑
1. Whether Mst. Niamat Bibi executed in plaintiff's favour the agreement referred to in paragraph 5 of the plaint
2. Whether the plaintiff's financed Mst. Niamat Bibi's suit as agreed upon
3. Whether the said agreement is fictitious, without considera tion, inadmissible in evidence, executory and amounts to wager The trial Court found all issues in favour of the plaintiffs and decreed the suit. On appeal, the learned Senior Subordinate Judge, while agreeing with the trial Court on all other points, held that the document sued upon was inadmissible on account of want of registration. On this ground alone he accepted the appeal.
The answer to the question, whether the document requires registration or not, would depend upon whether it creates any contingent right or interest in the property, that being the plea takers on behalf of the respondents. For this purpose we have first to consider the terms of the document. It is described as an Iqrarnama and bears a one‑rupee stamp. By this Iqrarnama Mst. Niamat Bibi agreed that in case the appeal of Allah Dad fails in the High Court she would give 2nd of the property to they appellants. The words used are:-
"Jis arazi ka dawa ho kar mere htiq man faisht hua hat is arazi ke do hissa Mulkhu wald lmarndin Khaivaja wald Imarndin, Gujjar, sakna Dhertt Ghunna, Zila Gujrat, ko baed faisla Adalat Aalla High Court muzhira bila uLar dawagi kiyunkeh jo kharch muqadma par hua hat )volt tumam woh karte gaye hain. Is ke iwaz arazi mutdawiva bala rnuqadma maire hai. Is se 1/3 hissa muzhira legi aur 2/3 hissa muskuran ko diya jawega koi uzar nab hoga." Learned counsel for the respondents lays stress on the following words which. occur in the latter part of the document:‑
"Arazi mazkura bala ke ni,arhissa kar dawn tha. Apne nisaf salim se 3 muzhira mazkuran ka hoga.
He argues that the word hogi' implies that as soon as the appeal is decided the appellants would become owners of the property. He argues that the effect of the document is that on the happening of this contingency viz, the dismissal of Allah Dad's appeal, there would be an automatic passing of title to the appellants. I am of the opinion that taking into consideration the whole of the document it is not possible to accept the interpretation put upon it by learned counsel for the respondents. I have put it to the learned counsel whether if the agreement between the parties simply was, as it appears to be, that they would divide the property in mentioned shares, the use of the word hogs' would imply a transfer They could have very well put the matter like this: "Allah Dad ki appeal kharij hone par ham arazi mutnazio aapis men taqshn kar lea gay, hissa rnera hoga our hissa Khawaja wa Mulkhu ka hoga." If such words were used could it be said that a contingent interest was being transferred As I have already stated the document is termed as an iqrarnama. In order that a document may operate as a transfer either in the present or in the future there must be dispositive words. The executant must say expressly or by implication "I transfer", although he may make the transfer conditional on the happening of any particular event. I find no words in the document which may of themselves have the effect of vesting title in the appellants on the dismissal of Allah Dad's appeal. It may be pointed out that the position of the respondents themselves throughout has been executory and that such an agreement neither could nor had in fact transferred any rights. In fact this objection is incorporated in issue No. 3. The impression created by the document is that Mst. Niamat Bibi was not regarding herself at all as the owner of the property at the time when she executed the document and was only entering into an agreement to transfer the property when she received. The learned Senior Subordinate Judge has decided the question of admissibility on the strength of Hemanta Kumari Debi v. Midnapur Zamindari Co. (I L R 47 Cal. 485 P C) and Ida v. Muhammad Din (A I R. 1925 Lah. 78). The first of these cases has no doubt some resemblance to the present case and needs a careful study. The facts in that case were that Hemanta Kumari Debi had filed two suits for possession of immovable property on a claim of ownership, one against Watson & Co., and the other against the Government. The first suit was compromised, the terms being that Watson & Co., were to continue in possession of the land on certain terms as to payment of rent etc., while the title of Hemanta Kumar was acknowledged. By the same compromise Hemanta Kumari agreed also that in case she succeeded in obtaining a decree in her suit against the Government she would grant Watson & Co. a joti settlement of the land in that suit upon the same terms and conditions. The whole of this compromise which was contained in a petition was narrated in the decree which was passed though the decree itself related only to the property in dispute in the suit against Watson & Co., Hemanta Kumari having succeeded against the Government the representatives in interest of Watson & Co. demanded of her a fulfilment of the agreement and on her refusal filed a suit for specific performance. Objection was taken by the defendant that the compromise was inadmissible in evidence for want of registration because it amounted to a lease and because it created an interest in immovable property. By the definition of lease contained in the Registration Act a lease includes an agreement to lease and this definition was made the basis of the first part of the objection. Their Lordships held that the agreement in order to constitute a lease must be a present demise'. Holding that the document before them was not a demise their Lordships overruled the contention that the document required registration on this ground and proceeded to consider the question whether it otherwise required registration. It was urged for the plaintiff that the compromise was contained in a decree which was exempt from registration. 'Their Lordships accepted this plea and held that the document was admissible in evidence. After having decided the point before them their Lordships made certain obser vations as regards the view taken by the Subordinate Judge on the question of registration. 'The Subordinate Judge had held that the document did not fall within section 17 (1) (6) and with this their Lordships did not agree. Their Lordships held that the document did create a contingent interest But I do not regard the judgment as going any further than this. Their Lordships did not say that the document on the ground required registration. It will be remembered that in their Lordships view, as expressed in Futteh Chand Saho v. Leelumber Singh Doss (14 M I A 129), a case of 1871, an agreement to transfer immovable property was a document creating an interest in immovable property and in that case the document was rejected as inadmissible. By the next Registration Act, which was passed in 1877, the proviso which now corresponds with section 17 (2) (v) and exempts those documents which give a right to obtain another document was added. It is on account of this proviso that their Lordships would be exempting the document and not because the document does not fall within section 17 (1) (b), and by saying that it does fall within 17 (1) (b) their Lordships do not mean that they would hold registration compulsory if it were not embodied in a decree. The suit before their Lordships was one for specific performance, that is a suit to obtain another document and there is no ground for supposing that if their Lordships intended to hold, that the compromise (apart the decree) did require registration they would so hold without even making a reference to section 17 (2) (v). That Their Lordships could never have meant to say that an agree ment to transfer is by itself inadmissible without registration is quite clear from the latter case Dayal Singh v. Inder Singh (53 I A 214), which contains a reference to Hemanta Kumari's case. This was a case of an agreement to sell along with a payment of earnest money. Their Lordships referred to the fact that they had held agreements to sell inadmissible in Fateh Chand's case, and the Legislature had in 1877 put in an exemption and then after referring to some cases including Hemanta Kumari's case said, "The Courts below were right in holding that the present agreement was an agreement to sell and not a sale and was consequently exempted under section 17 (2) (v)", This later Privy Council case can in fact be said to be a direct authority in favour of admissibility of the document in dispute because it is an agreement to sell, there being ample authority for the proposition that transfer of property in consideration of supplying funds for litigation are sales and as such pre -emptible.
There is another way of looking at the matter, Humanta Kumari's case was one of agreement to lease (though dependent on a contingency). That an agreement to lease creates an interest in immovable property is not by itself authority for the proposition that san agreement to sell would also create such an interest. Section 54 of the Transfer of Property Act provides expressly that an agreement to sell does not of itself create an interest in immovable property. As has been pointed out by Seshagari Iyer, J. in Swaminatha Mudaliar v. Ramas warm Mudaliar (I L R 44 Mad. 399) after reference to Hemanta Kumari's case, an inconsistency has been created by section 54 of the Transfer of Property Act which says that there shall be no interest created by an agreement to sell, and section 2 of the Registration Act, which operates to create an interest in case of agreements to lease. Though there is obviously nothing in reason to place an agreement to lease on a higher basis than an agreement to sell the express provision in section 54 of the Transfer of Property Act is sufficient to distinguish Hemanta Kumari's case from the present.
Learned counsel for the appellants has drawn my attention to section 21 of the Transfer of Property Act which defines contingent interest as an interest coming into existence on a transfer and has argued that had Their Lordships' attention been drawn to this section they may not have held that there was any contingent interest being created by the document before them for they had already held it was not a demise. It is unnecessary to consider this argument, the agreement before me being an agreement to fell which is directly covered by the later Privy Council case.
The other case relied upon by the learned Senior Subor dinate judge is Ida v. Muhammad Din (A I R 1952 Lah. 78), a suit based on a similar agreement. Out of two rival pre‑emptors, one had given up his suit on the other executing in his favour an agreement that if successful he would transfer a certain area. There is no discussion in the judgment of the points involved. The learned Judge only said, "The document clearly a document of title and makes the plaintiff an owner to the extent of 41 kanals 13 marlas of land from the date on which the defendant‑appellant obtains a decree in the pre- emption suit'". If that was the effect of the document in that suit, it is no authority on the question of registration in the present case. As regards the question of interpretation the terms of the document are not set out in detail and we do not know from what clause the learned judge came to the conclusion that the document had the effect of vesting title.
I hold that the agreement in dispute does not require registration.
Even if the document did require registration the respon dents would not derive any benefit because under the proviso to section 49 of the Registration Act it would still be admis sible in a suit for specific performance. The present suit is in C fact a suit for specific performance though framed apparently as a suit for possession. On this point too there is a Privy Council judgment which might mislead. i.e., .names R. R. Skinner v. Robert Hercules Skinner & Co. (A I R 1929 P C 269). It was held in that case that a sale deed which requires registration could not be made the oasis of a suit for specific performance, as it was inadmissible to prove the agreement for sale on which it was based. That judgment, however, as observed in N. M. S. S. Subramanian Chettiar v. S. M. A. M. Arunachalam Chettiar and others (A I R 1946 Pat. 62), was the reason for the amendment to section 49 of the Registration Act. In the amended section the proviso which has been added allows in clear terms the use of an unregistered deed as evidence in a suit for specific performance. Before the amendment there was a difference of opinion on this matter, the Madras High Court having taken the view that such a document could not be used as the foundation of a suit for specific performance. In the above mentioned judg ment Their Lordships of the Privy Council agreed with the Madras view. At this stage, however, the Legislature stepped in and made an express provision and now the Madras High Court has in the Full Bench decision above‑mentioned held that an unregistered sale deed can be the basis of a suit for specific performance. The same view has been taken in a Division Bench judgment of the Patna High Court reported as Jhaman Mahton v. Amrit Mahton and others (A I R 1946 Pat. 62). The Calcutta High Court has taken the same view in Smt. Swarnamayar Basu and another v. Sarajubala Debi and others (43 C W N 956). In a Full Bench judgment of our own High Court reported as Mst. Shankri and others v. Milkha Singh (43 P L R 656) there are observations which support the same opinion. Although two of the four pro positions mentioned in that Full Bench case have been over ruled in the subsequent Full Bench case Milkha Singh v. Mst. Shankari and others (A I R 1947 Lah. I) the remaining judgment remains intact. The following is the passage to which I am referring:‑‑
"lf the parties had simply entered into an agreement for sale, but had simply failed as yet to carry out the contract, their position would be governed by a definite set of legal princi ples. The first subsidiary question, it seems to me, is whether the position is in any way changed when the parties believe themselves to have completed the contract by executing an instrument which is declared by section 49 of the Indian Registration Act not to affect the property to which it relates. I think the answer must be in the negative. Ordinarily, when a contract of sale is completed, the contract comes to an end with the transfer; but when there is in fact no transfer, can it be said that the contract is ended, the intention of the parties being manifestly that the sale should be completed "
The basis of the decision of Their Lordships in A I R 1929 P C 269 was only the inadmissibility of the document and that defect having been removed by the amendment of section 49 it can no more be stated that such a document cannot be the foundation of a suit for specific performance.
Learned counsel for the respondents has urged other grounds in support of the decree. He argues, in the first instance, that the document being only executory a suit for possession did not lie, the only remedy being a suit for specific performance. He argues next that the bargain is unconscion able and should not be enforced. The first ground taken by the learned counsel is an objection to the form of the suit and unless it could affect the decision of the case on merits I would not allow it to be taken in view of section 99 of the Code of Civil Procedure. In Umar Din v. Fazal Din (P L D 1952 Lah. 166) Kayani, J. had to deal with a similar objection in circumstances closely re sembling the present case. The learned Judge has exhaustively dealt with the matter and I need not cover the same ground. Respectfully following that judgment I overrule the objection.
However, the second point argued by learned counsel ha force. The law with respect to champertous agreements is welt established. To quote the words of Their Lordships of the Privy Council in Raghunath v. Nil Kanth (I L R 20 Cal. 843.), "documents which set up agreements to share the subject of litigation it recovered, in consideration of supplying funds to carry it on are not in themselves opposed to public policy; but such documents should be jealously examined and when found to be extortionate and unconscionable they are inequitable as against the party against whom relief is sought and effect should not be given to them." The circumstances of .the present case are that Mst. Niamat Bibi had filed a suit for about 63 kanals. She had already succeeded in two Courts when the agreement was entered into. Khanadamadi is a very well established custom in the Gujrat District and the question of fact having been decided by two Courts in favour of Mst. Niamat Bibi there was prima facie little chance for Allah Dad to succeed. According to the statement of one of the plaintiffs in the witness‑box only Rs. 100 had been spent in the first two Courts, and the total expenses is put by him at Rs. 400. Mst. Niamat Bibi agreed to give 2/3 of the land even if no appeal was filed. Market value land has been stated by the fattier of the defendants as about twelve or thirteen thousand rupees and this statement which was made in the witness‑box remains un-contradicted. Even making allowance for some exaggeration the agreement still remains very unfair. There does not appear to be any good reason why Mst. Niamat Bibi should enter into such an agreement and part with two‑thirds of the property merely for engaging a counsel for the respon dent in a case where the custom relied upon was so well established and the rest was a finding of fact. The expense already incurred was only Rs. 100 and the agreement was to operate even if no appeal was filed. The executant was an illiterate woman and she was dealing with the brothers of her husband. She had in fact only a life estate in the property for all daughters have, as will appear from paragraph 64 of Rattigan's Digest, only life estates and the position of a Khanadamad is weaker for she is spoken of in a number of judgments as a conduit for conveying the property to her sons. That plea, however, was not taken, and I would not base my decision on it. I regard the bargain as extortionate and unconscionable and refuse to enforce it, as Their Lordships of the Privy Council refused to enforce a similar agreement in Raghunath v. Nil Kanth (I L R 20 Cal. 843). Even apart from the question of champerty, I have discretion to refuse relief, for the suit is one for specific performance of contract and section 22 of the Specific Relief Act specifically provides that Court may refuse specific performance if the circumstances are such as to give the plaintiff an unfair advantage over the defendant.
However, the plaintiffs are not to be left entirely without relief. I would follow the course adopted in the Privy Council case above‑mentioned and would grant the plaintiffs a reasonable compensation. According to their own case they spent Rs. 400 and I think Rs. 800 would be reasonable. There is another difficulty. Mst. Niamat Bibi is dead and a personal decree cannot be passed against the defendants.
I accept the appeal and pass a decree for Rs. 800 against defendants Nos, 1 and 2 as legal representatives of their mother, Mst. Niamat Bibi. The amount of the decree may be realized from the rents and profits of the property in dispute has well as from other property left by Mst. Niamat Bibi. Parties will bear their own costs in all Courts.
A. H. Appeal accepted.
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