Supreme Court of India
THE HONOURABLE MR. JUSTICE R.V. RAVEENDRAN & THE HONOURABLE MR. JUSTICE J.M. PANCHAL
Kaliaperumal
Versus
Rajagopal & Another
Civil Appeal No. 5800 of 2002
Decided on : 20-02-2009
B) Transfer of Property Act,1882, Section 54:- Where the vendor had executed the sale deed, but rejected to sign on the counter sale deed before the Registrar on presenting the document for registration on the ground that he has not been paid the full price of the sale deed as promised, it is clear from the conduct of the parties that the title of the property is not intended to be transferred by such mere execution. (Para 8 and 9)
Key Points: - The sale deed may pass title to purchaser only upon payment of full consideration, depending on the intention of parties as evidenced by the deed and surrounding conduct (!) (!) - If title passes on execution and registration despite non payment, the vendor may sue for balance price but cannot avoid the sale; creation of a charge for unpaid portion is possible under Section 55(4)(b) (!) - Where the deed states that balance consideration was to be paid before registration and the buyer did not tender it in the vendor’s presence, ownership may not pass on registration alone; intention to transfer on full payment is decisive (!) - The Lower Courts erred by assuming title passed on registration when the parties intended transfer after full payment; High Court upheld that title did not pass until full consideration was paid (!) (!) - The appellant’s claim of partial payment (Rs. 25,000) was rejected; the real readiness was to pay only Rs. 15,000, not Rs. 40,000 (!) - The correct test for passing of property is the intention of the parties, discernible from the sale deed recitals and conduct, supplemented by Section 92 Evidence Act if needed (!) - The appeal was dismissed; there shall be no order as to costs (!) - Facts: sale in 1983 for Rs. 43,000; Rs. 3,000 to discharge mortgage; balance Rs. 40,000 payable at registration; contention about payment left unresolved (!) - Registrar’s endorsement and the vendor’s conduct evidence that no full payment was made and hence title did not pass (!) - The case clarifies that transfer of ownership by sale is subject to the payment condition or its absence, per Section 54 and related doctrines (!)
Judgment :-
J.M. Panchal, J.
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 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. Thefacts 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 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 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 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
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