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1969 Supreme(P&H) 115

PUNJAB & HARYANA HIGH COURT
Shamsher Bahadur, J.
Lilawati
Versus
Firm Ram Dhari Suraj Bhan
Second Appeal No. 466 of 1963,
Decided On : SEPTEMBER 12, 1969

After an absolute sale, there can be no restriction on the enjoyment of the property that has been transferred.

Headnote:RENT - Enforceability of rent payment after absolute sale - Sec. 11 of the Transfer of Property Act - The court discussed the principle embodied in Sec. 11 of the Transfer of Property Act, which states that there can be no restriction on the enjoyment of property that has been transferred absolutely. The court held that after an absolute sale, any direction in the sale-deed that is contrary to the enjoyment of the absolute estate is void and unenforceable. The court cited the Privy Council decision of Rameshwar Bakhsh V/s. Balraj Kuar, AIR 1935 PC 187, which stated that clauses that are repugnant to the absolute estate created in favor of the buyer cannot cut down that estate and must be held invalid. The court also cited the Oudh Chief Court decision in Mt. Shiv Nath Kunwar V/s. Lachhmi Narain, AIR 1938 Oudh 17, which held that a stipulation for payment of rent to the vendor after an absolute conveyance is a clear restriction on the enjoyment of the rights created absolutely and is therefore illegal and unenforceable. The court concluded that the appellant's attempt to convert the sale into a perpetual lease was not permissible under Sec. 11 of the Transfer of Property Act.

Fact of the Case:

The plaintiff sold a plot of land to the defendants with a condition to pay a certain sum as rent. The defendants refused to comply with the condition, and the plaintiff brought a suit to enforce it.

Finding of the Court:

The trial court and the lower appellate court decided against the plaintiff, finding that the transfer of the land was absolute and therefore the condition for rent payment was unenforceable.

Ratio Decidendi:

After an absolute sale, any condition that restricts the enjoyment of the absolute estate is void and unenforceable under Sec. 11 of the Transfer of Property Act. Final Decision: The court upheld the decisions of the lower courts and dismissed the appeal.

Judgment

1. The single question for determination in this appeal of the plaintiff is whether after a vendor has made an absolute sale of property he can enforce the payment of the sum of rent from the vendee?

2. The plaintiff Lilawati sold about 100 plots in village Pillu Khera in Jind Tehsil, the object being to start a Mandi there. The defendant-respondents M/s. Ram Dhari Suraj Bhan purchased plot No.70 for Rs.99/- in pursuance of the sale-deed Exhibit P.1 of 20th of April, 1958. Although the sale was absolute, some conditions were introduced, on of these being that a sum of two annas in every hundred rupees would be paid as haqe malkana to the vendor. Out of this sum of two annas, one anna was to be given to the village Panchayat and the remainder one anna was to be retained by the vendor Lilawati. It is not necessary to go into the other conditions which required the vendee to construct a shop on the plot sold to him and to keep a frontage for purposes of the shop. The defendants having refused to comply with the direction for payment of haqe malkana, the plaintiff brought a suit for rendition of accounts to enforce the condition.

3. The pleadings of the parties gave raise to many issues but out of them issue No.3 is only relevant for purposes of this appeal: "3. If issue No.2 is proved, are the defendants bound by these conditions?" The trial Judge, and likewise the lower appellate Court in appeal, decided against the plaintiff, having found as a fact that the transfer of the land in favour of the vendee-defendants was absolute. It is not contested by Mr. Aggarwal, the learned counsel for the appellant, that the sale of plot for Rs.99/- in favour of the vendee by the appellant was absolute. In that situation, the principle embodied in Sec.11 of the Transfer of Property Act that there can be no restriction on the enjoyment of property which has been transferred absolutely, is clearly applicable. Under this section: "where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interst as if there were no such direction. " Likewise, the vendee is entitled to ignore a condition which cuts down his enjoyment of the absolute right of property. As stated in Mullas Transfer of Property Act (1966 Edition) at page 104, " a restraint on transfer is repugnant to any interst in property whether absolute or limited, for the right of transfer is an incident of ownership. " It was observed by Right Honble Sir Shadi Lal in the Privy Council decision of Rameshwar Bakhsh V/s. Balraj Kuar, AIR 1935 PC 187, at p.190: "there can, however, be no doubt that if these clauses are repugnant to the absolute estate created in favour of the lady, they cannot cut down that estate and must consequently be held to be invalid. "

4. The property having passed absolutely to the vendee-respondents, any direction in the sale-deed which is contrary to the enjoyment of such absolute estate is void and unenforceable. In a Single Bench decision of the Oudh Chief Court in Mt. Shiv Nath Kunwar V/s. Lachhmi Narain, AIR 1938 Oudh 17, the sale-deed was for a cash consideration of Rs.1000/- and there was an agreement for payment of Rs.47/- as annual rent to the vendor. It was held by the learned Judge that "where a vendor makes an absolute conveyance of his property to the vendee by sale for a cash consideration, the stipulation in the sale deed for payment of a certain amount to the vendor out of the profits of the property by way of rent is clear restriction on the enjoyment of the rights created absolutely, in favour of the vendee. Such a restriction being repugnant to the interest created, is not only illegal but without consideration and cannot be enforced. "

5. What the appellant apparently wants is to convert a sale into a perpetual lease and he cannot be perm




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