The main legal point established in the judgment is that a registered document operates from the time of execution, and subsequent transfers are subservient to prior contracts, unless there is a special contract.

JUDGMENT

(Prayer: Appeal Suit has been filed under Section 96 of C.P.C read with Order 41 Rule 1 of C.P.C., against the judgment and decree dated 07.08.2012 in O.S.No.11748 of 2010 on the file of the Additional District Judge, XVI Additional Judge, Chennai.)

1. The Appeal by the defendants, who lost the suit for declaration and delivery of possession and mesne profit.

2. Case of the plaintiff:-

The suit laid on the premise that the Flat No.5A, 5th Floor, Ramaiam Flats, Citadel No.1, Panchaliamman Koil Street, Arumbakkam, Chennai which is the subject matter of the suit and more fully described in the plaint schedule, sold to the plaintiff by M/s.P.V.S Finance Ltd., (third defendant) for a sale consideration of Rs.23,00,000/- vide a registered sale deed dated 17/03/1999. The possession was handed over to the plaintiff and letter dated 18/03/1999 was given by the third defendant confirming the factum of handing over. Copy of the handing over letter was also marked to M/s.Ramaniam Builders, who constructed the flats. While so, during the month of February 2002, the plaintiff came to know that one Tejraj (second defendant) is in occupation of the suit property without any legal authority. Therefore, the plaintiff issued notice dated 23/03/2002 calling upon the second defendant to vacate and deliver possession. The second defendant replied disputing the plaintiff’s claim without disclosing his legal right to be in occupation. To this reply dated 01/04/2002, the plaintiff gave a rejoinder dated 10/04/2002 calling upon the second defendant to disclose his right to occupy the suit premises. Since no information received from the second defendant, plaintiff gave a police complaint and during the investigation by the police, the plaintiff came to understand that one A.Gothamchand (the first defendant) purchased 1/3rd undivided share in the flat and land under a registered sale deed mentioning a consideration of Rs.4,10,000/- on 08/12/2000. Pending suit, the plaintiff came to know that the remaining 2/3rd share sold to Mrs.Gangabai (wife of the first defendant) and Mrs.Anitha (daughter-in-law of first defendant) for like sum on the same day. Hence, they were also impleaded as defendants 4 and 5.

3. The third defendant in order to defeat the rights of the plaintiff undervaluing the property had executed sale deeds in the name of first, fourth and fifth defendants, 1/3rd each for a consideration of Rs.4,10,000/- each with dishonest intention to get the sham and nominal document registered without furnishing income tax clearance certificate. While the suit property worth Rs.23lakhs and the plaintiff paid the said consideration and got the sale deed executed and presented for registration and same pending registration for want of income tax clearance, taking advantage of the pendency of registration, the third defendant has created three sale deeds in favour of defendants 1, 4 and 5 showing the total sale price as Rs.12,30,000/- and each vendor paid Rs.4,10,000/- towards their 1/3rd share. In order to cheat him and the Income Tax Department, the third defendant in connivance with the defendants 1, 4 and 5 had created these sale deeds for the suit property after alienating it to the plaintiff. Therefore, the defendants 1, 4 and 5 are not bonafide purchasers and defendant No.3 is not the owner of the suit property as on 08/12/2000 when he executed the sale deeds in favour of them.

4. After executing the sale deed in favour of the plaintiff, in fact the 3rd defendant borrowed Rs.40,000/- from the plaintiff to get Income Tax clearance certificate and executed a pronote dated 13/03/1999. He did not get the Income Tax certificate as promised, hence the sale deed dated 17/03/1999 presented for registration could not be registered immediately. Later, at the plaintiff’s own cost, the Income Tax certificate was obtained and the document gotregistered in the year 2001. Meanwhile, the third defendant had illegally created documents and put the second defen