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2023 Supreme(Chh) 548

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
GOUTAM BHADURI, SANJAY S. AGRAWAL, JJ.
Punit Ram Khunte S/o Kalap Ramji Khunte - Appellant
Versus
Smt. Tara Manikpuri W/o Shri Ayodhyadas Manikpuri – Respondent
FA No. 324 of 2018
Decided on : 04-10-2023

Advocates:
Advocate Appeared:
For the Appellant :Mr. Arvind Shrivastava, Advocate
For the Respondent:Mr. A.N. Bhakta & Mr. Vivek Bhakta, Mr. Devershi Thakur, Advocate

Non-payment of sale consideration could not be a ground for cancellation of the sale deed, and the agreement purporting cancellation due to non-payment could not override the registered sale deed.

Headnote:

sale deed - dispute over sale consideration - Transfer of Property Act, 1882, Section 54 - The court discussed the conflicting documents and the issue of non-payment of sale consideration, citing relevant legal provisions and precedents. The court held that non-payment of sale consideration could not be a ground for cancellation of the sale deed, and the agreement purporting cancellation due to non-payment could not override the registered sale deed.

Fact of the Case:

The plaintiff filed a suit for cancellation of a sale deed and to restrain the defendants from interfering with the possession of the property, alleging non-payment of the full sale consideration as per the agreement.

Finding of the Court:

The court held that the plaintiff's claim for cancellation of the sale deed due to non-payment of sale consideration was not valid, citing the provisions of the Transfer of Property Act, 1882 and relevant legal precedents.

Issues: Dispute over sale consideration, validity of the sale deed, and the effect of conflicting documents.

Ratio Decidendi: Non-payment of sale consideration could not be a ground for cancellation of the sale deed, and the agreement purporting cancellation due to non-payment could not override the registered sale deed.

Final Decision: The appeal was dismissed, and the parties were left to bear their own costs.

Judgement Key Points

Key Points: - The court held that non-payment of sale consideration could not be a ground for cancellation of the sale deed, and an agreement purporting cancellation due to non-payment cannot override the registered sale deed (!) (!) . - The registered sale deed Ex.D/1 shows the sale consideration and payments, and the agreement Ex.P/3 cannot override the registered instrument when the sale deed has been executed (!) (!) . - The appeal was dismissed; the plaintiff’s claim for cancellation was not valid, and the parties must bear their own costs (!) (!) . - The discussion includes section 54 of the Transfer of Property Act defining sale and its requirements, including that a sale is defined as transfer for a price paid or promised or part-paid/part-promised; and a sale requires a registered instrument for tangible immovable property of value above Rs. 100 (!) (!) . - The decision cites that even if entire consideration had not been paid, it could not be a ground for cancellation of the sale deed; remedies may lie for recovery but not cancellation (!) . - It discusses the binding precedent framework and the effect of conflicting judgments on high court decisions (contextual to the reasoning) (!) (!) (!) . - The specific factual finding: Ex.D/1 (sale deed) shows Rs. 30,00,000 paid by cheque and Rs. 12,50,000 cash; the agreement states different terms about cancellation upon cheque dishonor; there is a contradiction between Ex.D/1 and Ex.P/3 (!) .

What is the effect of non-payment of sale consideration on cancellation of a registered sale deed under Transfer of Property Act, 1882?

What is the binding nature of an agreement alleging cancellation (Ex.P/3) when a registered sale deed exists?

What is the proper remedy or recourse when non-payment of sale consideration occurs in a sale transaction?


JUDGMENT :

Goutam Bhaduri, J.

1. Challenge in this appeal is to the judgment and decree dated 26-4-2018 passed by the Additional District Judge, Raipur, in civil suit No.59-A/2017 whereby the suit filed by the appellant/plaintiff was dismissed.

2. Brief facts of the case, as pleaded in the plaint, are that the plaintiff owned a land bearing Kh.No.217/1 admeasuring 3000 sq.ft. wherein superstructure was raised on 1800 sq.ft. He entered into an agreement for sale on 18.11.2010 that the property in its entirety would be sold for a sale consideration of Rs.42,50,000/-. The cost of the suit property was Rs.50.00 lacs. The plaintiff averred that during the execution of the sale deed, out of sale consideration of Rs.42,50,000/-, Rs.30,00,000/- was paid by Cheque which the defendant availed on loan and for remaining Rs.12,30,000/- a cheque was given though in the sale deed, the amount of sale consideration was stated to be received in cash. At the same time, it was further agreed that an agreement was executed, which purports that an amount of Rs.12,30,000/- is being given by cheque which is entered as cash in the sale deed and further if the cheque was dishonoured by the bank on subsequent point of time, the sale deed ipso facto would be cancelled. Subsequently when the cheque was dishonoured, the plaintiff claimed that the sale deed has come to an automatic end whereas the defendants pursued for mutation of their names in the revenue documents, which resulted into a cause of action to be in favour of the plaintiff. Therefore, the suit was filed for cancellation of the sale deed and to restrain the defendants from interfering the possession of the plaintiff.

3. Written statement was filed on behalf of the defendants in which it has been submitted that the plaintiff offered for purchase of the suit property for a sale consideration of Rs.50.00 lacs, which was refused by the defendants, however, after due negotiations, the sale consideration was settled for Rs.42,50,000/- and initially Rs.7,70,000/-was paid in cash and on 18.11.2010, a cheque of Rs.12,30,000/- was given. The defendants further stated that for the rest of the amount, Rs. 30.00 lacs loan would be availed from HDFC Bank and thereafter, the amount would be paid. In consequence thereof, after obtaining loan of Rs.30.00 lacs, a cheque of Rs.30.00 lacs was given to the defendants. The defendants stated that it was agreed that in case Rs. 12,30,000/- is paid in cash, the cheque would be returned to him. The defendant further stated that as per the agreement, an amount of Rs.7,70,000/- was paid, however, on the subsequent time when Rs. 4,80,000 was paid and cheque was demanded back, but eventually the cheque was not returned by the defendants Instead, it was encashed through the Bank and by misusing the cheque, the complaint under the Negotiable Instruments Act was filed. It further stated that despite receipt of Rs.42,50,000/-, the plaintiff has not delivered the possession of the suit property and after the sale deed has been executed, earlier agreement to this effect has come to an automatic end. Further the defendants stated that on unsustainable ground, the application for mutation is being objected and dismissal of suit was prayed. The counter claim was also made by the defendants for return of cheque of Rs.12,50,000/- as also the declaration that the sale deed is valid and further possession of the suit property was also claimed by way of counter claim.

4. On the basis of pleadings of the parties, the learned trial Court framed the issues and held that the plaintiff is not the owner of the suit property comprised over Kh.No.217/1, P.H. No.180/1 Rani Durgavati Ward, Palash Vihar Colony, Colony, Mahavir Nagar Raipur and further held that the agreement dated 18.11.2010 cannot be enforced. Further in respect of the counter claim, it was allowed to the extent to hand over the possession of the suit property within a period of 30 days. Hence, this appeal.

5. Learned counsel for the

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