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IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. SUBRAMANIAN, R. SAKTHIVEL, JJ.
Dr. P.V.R.K. Anjaneeya Guptha - Appellant
Versus
M. Anbazhagan & Ors. - Respondents
W.A. No. 1057 of 2023 and CMP Nos. 10562 and 10563 of 2023
Decided On : 13-06-2024
Cancellation - Sale Deeds - Transfer of Property Act, 1882; Registration Act, 1908 - The court interpreted Sections 55(4)(b) and 68 of the Transfer of Property Act and Registration Act, concluding that non-payment of sale consideration does not empower cancellation of registered Sale Deeds by authorities.
Fact of the Case:
The petitioner sought cancellation of Sale Deeds due to non-payment of sale consideration. The third respondent issued cheques that bounced, and despite an understanding to pay, the payment was not made. The petitioner approached authorities for cancellation, leading to a Writ Petition.
Finding of the Court:
The court found that the Registration Authorities lack the power to cancel Sale Deeds based on non-payment of consideration, as this is a substantive matter governed by the Transfer of Property Act, and such issues must be resolved in civil court.
Issues: Whether the Registration Authorities can cancel Sale Deeds for non-payment of sale consideration.
Ratio Decidendi: The court held that the power to cancel registered Sale Deeds does not exist under the Registration Act for non-payment of consideration, as this is a matter for civil courts under the Transfer of Property Act.
Result: The Writ Appeal is allowed, and the order of the Hon'ble Single Judge cancelling the Sale Deeds is set aside.
JUDGMENT :
R. Subramanian, J.
[PRAYER: Writ Appeal filed under Clause 15 of the Letter Patent against the order dated 12.08.2022 made in W.P.No.1471 of 2022.]
Challenge in this appeal is to the order of the Writ Court granting the extraordinary relief of cancellation of Sale Deeds for non-payment of sale consideration.
2. The facts that led to the filing of the Writ Petition seeking a Writ of Mandamus directing the respondents to consider the petitioner's representation dated 21.01.2022 and cancel the Sale Deeds dated 17.04.2019 and 13.10.2021 as mentioned in the Understanding Deed dated 30.03.2021 are as follows:
2.1. It is the case of the petitioner before the Writ Court that he is in the business of construction of buildings and he purchased the property subject matter of the Writ Petition in the year 2006. Due to certain financial difficulties experienced by him, he wanted to sell the property and the third respondent expressed his interest in purchasing the property for a consideration of Rs.48,87,000/- (Rupees Forty Eight Lakhs Eighty Seven Thousand Only). After further negotiation, an advance of Rs.5,00,000/- (Rupees Five Lakhs Only) was paid by way of cheque bearing No.325832 drawn on State Bank of India, Villianur Branch, Puducherry and on presentation, the cheque was honoured.
2.2. According to the petitioner, the third respondent who agreed to pay the balance of consideration, issued two cheques bearing Nos.927730 and 927731, dated 17.04.2019, drawn on Punjab National Bank, for a sum of Rs.21,93,000/- and Rs.21,94,000/- respectively. After receipt of the two cheques, the Sale Deed was registered on 17.04.2019. It should be pointed out at this juncture that there was no recital in the Sale Document regarding the non-payment of consideration. Subsequently, when the cheques were presented, they were returned citing 'insufficiency of funds' as a reason. According to the petitioner, despite his repeated demands, the third respondent did not come forward to pay the balance of sale consideration.
2.3. The petitioner also found to his shock and surprise that the third respondent has mortgaged the property with the fourth respondent for a sum of Rs.10,00,000/- (Rupees Ten Lakhs Only) vide a Mortgage Deed dated 21.08.2019 and it was also the further contention that the pandemic intervened and thereafter, the petitioner was able to trace the third respondent and an Understanding Deed was entered into between them on 30.03.2021 wherein the third respondent agreed to pay the balance of consideration within a specific time, failing which, he would get the Sale Deed cancelled.
2.4. In the interregnum, the third respondent has also created a document of Cancellation of the Mortgage and a fresh Mortgage for a sum of Rs.75,00,000/- (Rupees Seventy Five Lakhs Only) was also created on 11.03.2021.
2.5. It was the further case of the petitioner that the third respondent had conveyed the property to the fourth respondent for consideration on 13.10.2021 vide Document No.24894 of 2021. The petitioner had approached the Police invoking the provisions of Land Grabbing Act also. A representation was also made on 21.01.2022 to the District Collector, Puducherry and the District Registrar, Puducherry seeking cancellation of Sale Deeds on the ground that the consideration was not paid and a fraud was perpetuate. The Undertaking that was given by the third respondent on 30.03.2021 was also sought to be enforced through the Authorities of the Registration Department. Since no action was taken by the Registration Department, a Writ Petition seeking a Mandamus was filed before this Court.
3. We find from the order of the Hon'ble Single Judge that the respondents 1 and 2 therein were directed to pass orders and the orders have to be produced before this Court. Pursuant to the said direction, the first respondent therein conducted an enquiry and rejected the representation on the ground that non-payment of consideration is not a ground for cancellation and the
The court established that non-payment of sale consideration does not justify cancellation of registered Sale Deeds by Registration Authorities, which is a matter for civil courts.
The Registration Authorities lack the power to cancel registered Sale Deeds for non-payment of sale consideration, as this is governed by substantive law and must be resolved in civil court.
The intention of the parties in a sale deed, as evidenced by the recitals, is crucial in determining the passing of title and the validity of the sale. The power of the registering authority to cance....
A vendor cannot unilaterally cancel a registered sale deed as it conflicts with property law principles; disputes must be resolved in civil court.
A writ petition is not maintainable to challenge the registration of a cancellation deed executed unilaterally by the settlor of a settlement deed. The proper remedy for the aggrieved party is to fil....
The main legal point established in the judgment is that the Registering Authority has no power to unilaterally cancel a settlement deed, and such unilateral cancellation is void and non-est in law.
The Registrar does not possess the authority to cancel registered sale deeds, and such powers cannot be conferred by executive order, as this would infringe upon statutory provisions governing regist....
Proper execution of cancellation deeds and conducting enquiries before registration is essential under Section 26(i)(k) of the Indian Stamps and Registration Act.
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