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Letters Patent Appeal No. 231 of 1960, decided on 27th November 1962.
, S. 17 (2), Explanation [as introduced by Registration (Amendment) Act (11 of 1927)]‑Instru ment merely an agreement to sell immovable property‑Contract though containing recital of payment of purchase money does not require registration.
Dayal Singh v. Indar Singh A I R 1926 P C 94 ; James R. R. Skinner v. Robert Hercules Skinner and others A I R 1929 P C 269 and Diwan Singh v. Gurbachan Singh and others A I R 1932 Lah. 276 ref.
Bansi Dhar and others v. Sampat Kumar Singh and others A 1 R 1927 All. 287 rel.
Khan Abdul Latif Khan for Appellant.
Khawaja Muhammad Khan for Respondent.
Date of hearing : 27th November 1962.
.--‑This Letters Patent Appeal by Malik Banaras is directed against the order, dated the 24th of June 1960, of Abdul Aziz Khan, J., whereby the appeal of Sayed Farman Shah respondent from the remand order of the Senior Sub‑Judge, Peshawar, dated the 6th of March 1957, was accepted, and the judgment and decree of Sub‑Judge 4th Class, Peshawar, dated the 29th of October 1956, dismissing the appellant's suit, was restored.
2. The facts giving rise to the suit, out of which the present Letters Patent Appeal arises, may be shortly narrated :‑
Malik Banaras Khan sued Sayed Farman Shah for specific performance of an agreement, dated the 27th of April 1955, copy Exh. P. W. 3/1. The gravamen of the plaintiff's claim was that on the 27th of April 1955, Sayed Farman Shah executed an agreement in which he had agreed to sell to him 161 marlas of land towards the west, out of khasra No. 178/1, that in the said agreement the sale price of the land had been fixed at Rs. 500 which had been paid to the defendant, and the possession of the land was also given to him (plaintiff), and that the defendant had further agreed to execute a sale‑deed and get it registered by the 10th of May 1955, but he had not done so. The defendant resisted the plaintiff's suit on various grounds, but we are concerned in this appeal with the plea raised by the defendant, to the effect that the agreement (the actual word used in the written statement was Iqrarnama) was in fact exchange and inadmissible in evidence for want of registration. On the, pleadings of the parties, the following issues were settled in the suit :‑
(1) Whether the suit is barred by time
(2) Whether the defendant failed to perform his part of the contract, if so, with what effect
(3) Whether the agreement deed being without consideration and unregistered is void and cannot be enforced against the defendant
(4) To what compensation, if any, the plaintiff is entitled
(5) Relief.
3. Mr. Abdur Rehman Khan, Sub‑Judge 4th Class, Peshawar, by his order dated the 29th of October 1956, non‑suited plaintiff on issue No. 3, holding that "the agreement was in fact in itself creating an interest in the immovable property of the value of more than Rs. 100 and do not, therefore, allow the application of section 17. Clause (2) sub‑clause (5) of the Registration Act and if carried out will definitely bring about a change of ownership and is, therefore, compulsorily registrable and as such is in admissible in evidence under section 49 of the Registration Act, and cannot be the foundation and basis of the present suit for specific performance."
4. The plaintiff went up in appeal, and the learned Senior Sub‑Judge set aside the judgment and decree of the trial Court, and remitted the case for decision of the remaining issues, as he thought that the agreement Exh. P. W. 3/ 1 was an agreement to sell, and was, therefore, not compulsorily registrable.
5. The defendant, feeling aggrieved, went up in appeal and Abdul Aziz Khan J., by his order‑ dated the 24th of June 1960. accepted the appeal, set aside the judgment and decree of the Senior Sub‑Judge, and restored that of the trial Court The reasons which prevailed with our learned brother in reaching that conclusion are to be found in para. 5 of the judgment which is reproduced :‑
"Exhibit P. W. 3/1 leaves no room for doubt Mat there way a transfer of ownership. A transfer of ownership means a transfer by such person of his rights and interests in the pro perty in full and permanently. Where there is no transfer ownership, the transfer, though in form c2 sale, cannot be con sidered to be sale. In the present case. it Is categorically stated in Exh. N. W. 3/l that possession has been transferred."
6. Khan Abdul Latif Khan, the learned counsel for the appellant, strenuously argued that the agreement dated the 27th of April 1955, (copy Exh. P. W. 3/1), was not a through and through sale, but a mere agreement to sell, and (lid not itself create any right, title, o: interest in immovable property, but merely created a right to obtain another document, and as such fell under the exempted clause of section 17, sub‑clause (2) (v) of the Registration Act. He argued that in order to decide whe ther the instrument. (copy Exh. P.W. 3/1), was a mere agreement to sell or a complete sale. All the terms of the document should be looked through, and that the terms of the present instrument unmistakably led to the irresistible conclusion that the instrument was a mere agreement to sell.
7. Mr. Khwaja Muhammad Khan, the learned counsel for the respondent, on the other hand, argued that the instrument in question was an exchange or, in the alternative, it was a completed sale, and not an agreement to sell. He emphasized (1) that the sale consideration of Rs. 500 had been admitted and (2) that it was also admitted that the possession of the property had passed, and as such these facts clearly constitute a completed sale, and not an agreement to sell. Mr. Khwaja Muhammad Khan backed his argument by the following three authorities :‑
(1) Dayal Singh v. Indar Singh A I R 1926 P C 94.
(2) James R. R. Skinner v. Robert Hercules Skinner and others A I R 1929 P C 269,
(3) Diwan Singh v. Gurbachan Singh and others A I R 1932 Lah. 276.
8. The sole question which calls for determination is as to whether the instrument, (copy Exh. P. W. 3/1) is agreement to sell, and comes under the Exception of section 17, sub‑clause 2 (v). It will be convenient to reproduce the said proviso, which runs as follows:‑‑
(v) Any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immov able property, but merely creating a right to obtain another document which will, when executed, crate, declare, assign, limit or extinguish any such right, title or interest.
It will be plain from reading of the above provision that if a document does not itself create any right, title or interest of the value of one hundred rupees and upwards to or in immovable property, "but merely creates a right to obtain another document which if completed would create such rights in the immovable property" then the document clearly falls under the Exception of clause (v) of section 17 sub‑clause (2). In other words, we have to see whether the instrument is a completed sale or mere agreement to sell. To decide this question, we have to look into the terms of the agreement. It will be convenient to reproduce the rendering into English of the said agreement, by our learned brother Abdul Aziz Khan, .1. :‑
We said Farman Shah son of Dilawar Shah first party and Malik Banaras second party do hereby agree that on the basis of partition, I first party Farman Shah the owner of 1 kanal 131 marals bearing Khasra No. 178/1. I the first party therefore out of the said area agree to sell 161 marlas of land on the western side in favour of the second party Malik Bararas. The price of the land has been fixed as Rs. 500 which has been paid to me the first party by the second party and the possession of the land has been delivered to the said second party. Khasra No. 178/2 belongs to me the second party and I would sell 164 marlas of land of this khasara number in favour of the first party. The price of the area has been fixed as Rs. 500 which I the second party has received from the first party and the possession has been delivered. We both the parties will get the sale‑deed in respect of the property registered till 10th May 1955. Whoever refused to get the sale‑deed registered shall be forced to register the same.
9. After careful perusal of the authorities cited at the Bar, and giving the terms of the instrument Exh. P. W. 3/1, our mature consideration, and speaking with respect, we are unable to accede to the reasoning which found favour with our learned brother, in holding that the agreement was an exchange or a completed sale, and, as such, required registration, as we are clearly of the view that the instrument in question is merely an agree ment to sell and not a completed sale. We now proceed to give our reasons :‑
10. The instrument in the second line in vernacular, after describing the names of the parties states :‑
Then the first party states that he had agreed to sell 1641 marlas of the land towards west. The words actually used in vernacular are :
These words unequivocally indicate that the first party had agreed to sell, and that the property had not been already sold. The next important term, which in our view would clinch the matter in favour of the appellant, are the following words in vernacular :‑
These words, in our view, admit of no ambiguity, and clearly show that the parties did not treat the instrument to be a completed sale, in that they had in very clear language stipulated to get sale deeds executed in favour of each other by 10th May 1955.
11. Finally, we have the evidence of Muhammad Yunas petition writer (P. W. 5) who deposed that the two sale‑deeds, copies Exh. P. W. 3/3 and Exh. P. W. 3/4 were actually drawn up on the 27th April 1955, and Haji Malik Banaras appellant actually completed the sale‑deed Exh. P. W. 3/3 by signing the same under which he sold 161 marlas of land towards the west out of khasra No. 178/2 in favour of Sayed Farman Shah for the sum of Rs. 500, while the sale‑deed on behalf of Sayed Farman Shah in favour of the appellant in respect of the sale of 161 marlas of land towards the west out of khasra No. 178/1 was left with the scribe Muhammad Yunas (P. W. 5) to be signed by him, but later on the father of Sayed Farman Shah took both the sale deeds from the witness. The drawing of the two sale‑deeds and actual execution of the sale‑deed by the appellant in favour of the respondent conclusively prove the intention of the parties that the parties clearly intended to treat the instrument in suit as a mere agreement to sell, and in face of the above evidence it is idle for the respondent to suggest that the instrument Exh. P. W. 3/1 was a completed sale or exchange and not an agreement to sell. We, however, regret to note that the notice of our learned brother, Abdul Aziz Khan, J., was not drawn to this important documentary evidence and the statement of Muhammad Yunas petition‑writer.
12. As regards the two Privy Council rulings and the decision of the Lahore High Court, reported in A I R 1932 Lah. 276, cited on behalf of the respondent, we are clearly of the view that the same are not in the least availing to the respondent in view of the Registration (Amendment) Act, 1927 (Act 11 of 1927) which came into force from 18th February 1927. By this Act there had been added to section 17 sub‑clause (2) of the Registration Act, 1908 the following Explanation :‑
A document purporting or operating to effect, a contract for the sale of immovable property shall not be deemed to require or ever to have required registration by reason only of the fact that such document contains a recital of the payment of any earnest money or of the whole or any part of the purchase money.
The decision of the Privy Council in Dayal Singh v. Indar Singh (1) came up for consideration before the Full Bench of Allahabad High Court, comprising of seven Judges, reported in Bansi Dhar and others v. Sampat Kumar Singh and others (2), Lindsay, J., delivering the judgment for the Court observed that "a contract of sale of immovable property though it contains a recital of payment of a part of purchase money of more than Rs. 10 to the proposed vendee, does not require registration." At page 287, his Lordship further observed :‑
"The document of the 1st September 1918, with which we are not concerned is a document of the description given in the above Explanation, and it follows, therefore, that in virtue of this new enactment it did not require to be registered."
As regards the Privy Council ruling A I R 1929 P C 269 as also A 1 R 1932 Lah. 276, the same would not advance the case of the respondent, in that the attention of their Lordships was not drawn to the introduction of the Explanation at the end of subsection (2) of section 17 of the Registration Act.
13. For all the foregoing reasons, we accept the Letters Patent Appeal with costs, set aside the judgment and decree of our learned brother, Abdul Aziz Khan, J., dated the 24th of June 1960, restore that of the Senior Sub‑Judge, and remit the case to the trial Court for decision of the remaining issues.
14. It is important to observe here for the information of the learned trial Court that issue No. 3 was a composite issue, compris ing of two issues, (A I R 1926 P C 94) whether the agreement‑deed, was without consideration, and (A I R 1927 All. 287) whether the agreement deed being unregis tered was void and could not be enforced against the defendant. The learned trial Court, while discussing this issue, had confined its discussion to the latter part of the issue, relating to the agreement being unregistered, and not said anything about the first part of the issue, whether it was without consideration. He should, therefore, while deciding the remaining issues, address himself to this issue as well.
K. B. A./A. H. Appeal accepted
Case remanded.
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