Contract Act, 1872 – s.11 – Registration Act, 1908 – s.85 – A Land measuring 3.40 Hectares was sold by respondent no.2 to appellants and collaterals of the appellants – Half of the total land (suit land) was purchased by appellants and other half by the collaterals of appellants – Respondent no.2 herein executed a Sale Deed (suit land) in favour of appellant no.1 and his minor brother (since deceased) on 02.12.1985 with respect to suit land and another sale deed was also executed with the collateral of the appellants – The sale deed (suit land) in favour of the appellant no.1 and his minor brother could not be registered and remained pending for registration before the Sub-Registrar on account of deficiency in stamp duty – On 03.12.2010 respondent no.2 executed a Conveyance Deed with respect to the suit land in favour of respondent no.1 – It is the same land which was transferred in favour of the appellant no.1 and his brother in December, 1985 – The appellants then followed up registration of their sale deed, which was registered on 14.06.2011 – Appellant filed suit for cancellation of sale deed 03.12.2010 and the same was dismissed by the Trial Court – First Appellate Court allowed the appeal filed by the appellants – However, the High Court set aside the decision of the First Appellate Court and upheld the decision of the Trial Court – Correctness: Held: The Trial Court and the High Court had proceeded on the premise that the defendant No.1-the vendor (respondent no.2 herein) had denied the execution of the sale deed and had also denied that he had not received any consideration – This premise taken by both the Courts i.e. Trial Court and the High Court are contrary to the pleadings on record and the evidence led during the Trial – There is clear misreading of the evidence – In his written statement, defendant no.1 has not specifically denied anywhere that he had not executed the sale deed or that the signatures on the sale deed were not his signatures – Thus, the very premise on the basis of which the Trial Court and the High Court proceeded are perverse being contrary to the material on record – Both the said courts also failed to take into consideration that defendant no.1 the vendor (respondent no.2 herein) neither entered the witness box in support of his pleadings and to prove them, nor did lead any evidence, either oral or documentary, in support of his pleadings – There was no justification to treat a vague statement in the written statement of not recollecting about execution of sale deed, to be taken as a denial of the execution – The Trial Court and the High Court fell into the trap of clever drafting and a vague statement of defendant no.1 – The Trial Court and the High Court also committed a manifest error in recording that the defendant no.1- vendor (respondent no.2 herein) had denied having received any sale consideration with respect to the sale deed dated 02.12.1985 – In the written statement filed by the defendant no.1, there is no such statement made – Based upon the aforesaid two factual errors, the Trial Court and the High Court wrongly shifted the burden on the plaintiff to prove execution of the sale deed and also payment of the sale consideration – The impugned judgment thus suffers from manifest error of law and facts both – It is not disputed by respondent No.2 that on 02.12.1985, he had executed another sale deed with respect to the remaining portion of the land in favour of the collaterals of the appellants – This sale deed in favour of the collateral was presented for registration on the same date as the sale deed of the appellant i.e. 05.12.1985 and was thereafter duly registered – The respondent No.2 has never challenged the said sale deed in favour of the collaterals – It is thus apparent that the family members and collaterals of the appellants purchased the entire land measuring 3.40 Hectares from respondent No.2 in equal shares by two separate documents which were executed on the same date and presented for registration on the same day – There is no specific denial in the written statement filed by respondent No.2 about the sale deed in favour of collaterals – General denial has been made by placing strict proof of liability on the plaintiff – The respondent No.2 apparently wants to take advantage of certain minor aberrations and minor technicalities and is also taking up self-conflicting pleas – As far as the question of payment of sale consideration is concerned, assuming that no sale consideration was paid even though there was a registered sale deed, it would be at the instance of the vendor to challenge the said sale deed on the ground of no sale consideration being paid – In the present, case, there is no such challenge to the sale deed for being declared as void or being cancelled on such ground – Regarding delay of 26 years in registering the document, Non-registration of a document duly presented for registration could be for many reasons – But once it is registered, there is a presumption of correctness attached to it, that is to say that the document has been duly executed and registered in accordance to law – It was for the defendants (respondents) to come forward and to establish that the document was wrongly registered – They did not lead any evidence in this respect – Instead, they tried to put burden on the plaintiff-appellant by requiring him to call the Sub-Registrar as a witness, which the appellant rightly denied – It was always open for the respondents to have called for the records of the Sub-Registrar’s office and also the Sub-Registrar in order to find out any mandatory lacuna or illegality or lack of procedure not being followed with respect to the registration – They did nothing of this sort – In fact, respondent No.2 did not make any bone of contention with regard to the registration process and the registration of the documents after 26 years by challenging the same before the same authority or any superior authority or any Court of law – Registration of a document carries with it presumption of correctness until and unless the same was challenged by way of independent proceeding or a counter claim – In the absence of any such claim, the sale deed in favour of the appellants has to be treated as a valid document – The High Court recorded the findings that the fact that the purchasers were minors would not per se affect the validity of the sale deed for the reason that the second purchaser who was mentioned as a minor in the sale deed was represented through his natural guardian and mother – The respondent no.2 appears to be a dishonest person, which is apparent from his conduct not only during the trial but also acting in collusion with respondent no.1 to execute the sale deed for the same land which he had already transferred – Thus, the impugned judgement of the High Court is set aside and that of the first Appellate Court decreeing suit of the appellant is restored and maintained. [Paras 29, 30, 33.1,33.2, 33.6, 33.8, 33.9, 33.12, 33.13] Contract Act, 1872 – s.11 – Registration Act, 1908 – s.85 – Whether the sale deed dated 02.12.1985 was executed by Respondent No. 2:
Held: It is not disputed by respondent No.2 that on 02.12.1985, he had executed another sale deed with respect to the remaining portion of survey No.13/1 in favour of the collaterals of the appellants – This sale deed in favour of the collateral was presented for registration on the same date as the sale deed of the appellant i.e. 05.12.1985 and was thereafter duly registered – The respondent No.2 has never challenged the said sale deed in favour of the collaterals – It is thus apparent that the family members and collaterals of the appellants purchased the entire survey No. 13/1 measuring 3.40 Hectares from respondent No.2 in equal shares by two separate documents which were executed on the same date and presented for registration on the same day – There is no specific denial in the written statement filed by respondent No.2 about the sale deed in favour of collaterals – General denial has been made by placing strict proof of liability on the plaintiff. [Para 33.1] Registration Act, 1908 – Transfer of Property Act, 1882 – Registration of documents/sale deed – Payment of stamp duty – Deficiency of stamp duty – Deficiency of stamp duty cannot enure any benefit to the vendor:
Held: The issue of registration of a document is with the State, which requires compulsory registration of documents so that it is not deprived of revenue by way of stamp duty payable on such transfers of immovable property – If the purchaser has no means to pay stamp duty or exorbitant demand of stamp duty is made by the registering authority which the purchaser is unable to pay at that time but he remains satisfied with the fact that the vendor has fairly and duly executed the sale deed presented it for registration and put him in possession of the purchased property which he is peacefully enjoying, he is always at liberty to pay the deficiency of stamp duty at any point of time – The document presented for registration will remain with the Registering Authority till such time, the deficiency is removed – However, this pendency of registration on account of deficiency cannot enure any benefit to the vendor, who has already eliminated all his rights by executing the sale deed after receiving the sale consideration – He cannot become the owner of the transferred land merely because the document of sale is pending for registration – It is the purchaser who cannot produce such document which is pending registration with respect to the immovable property in evidence before the Court of law as the same would be inadmissible in view of statutory provision contained in the TP Act as also the Act, 1908. [Para 33.13] Principles/Doctrines – Doctrine of bona fide purchaser – Applicability in case of subsequent purchaser: Held: The doctrine of bona fide purchaser for value applies in situations where the seller appears to have some semblance of legitimate ownership rights – However, this principle does not protect a subsequent purchaser if the vendor had already transferred those rights through a prior sale deed – In a case where the vendor deceitfully executes a second sale deed 26 years after the initial transfer, without disclosing the earlier transaction and without any ongoing litigation regarding the property, the subsequent purchaser cannot claim the benefits of a bona fide purchaser – Essentially, if the vendor’s rights were already severed by the first sale, any later sale deed made without transparency and in bad faith is invalid – The subsequent purchaser, even if unaware of the prior sale, cannot be considered bona fide because the vendor no longer had the legal right to sell the property – Thus, the protection afforded by the bona fide purchaser doctrine is nullified by the vendor’s deceitful conduct and the pre-existing transfer of rights – This ensures that the original purchaser’s rights are upheld and prevents unjust enrichment through fraudulent transactions. [Para 35]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Ankit Gyan. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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