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Petitioner: HAZI GOYZUDDIN AND OTHERS VS Respondent: MUHAMMAD SERAJUL HAQ MIA AND OTHERS
P L D 1963 Dacca 326
P L D 1963 Dacca 326
Before Chowdhury, C. J. and M. R. Khan, J
Hazi GOYZUDDIN AND OTHERS---‑Appellants
versus
MUHAMMAD SERAJUL HAQ MIA AND OTHERS ---Respondents
Second Appeal No. 266 of 1957, decided on 7th December 1961.
(a) Registration Act (XVI of 1908), Ss. 77 & 49 read with S. 12, Specific Relief Act (I of 1877)‑Suit for specific performance of contract to sell immovable property under unregistered document Cause of action in suit for specific performance distinct from that under Registration Act‑Executed document whether presented for registration or not or whether suit under S. 77 had failed imma terial‑Suit for specific performance of contract for registration barred‑Suit under S. 77 relates to registration of document whose registration refused‑Court's enquiry in suit under S. 77 not concerned with validity or legal effect of document but confined to: whether document has been executed and requirements of Registration Law complied with‑Decree affects only document does not affect transaction‑Refusal to decree cannot affect contract of sale remaining unperformed till deed registered‑Registration refused‑Claimant may sue for specific performance of contract instead of appealing to Registrar under Registration Act, 1908.
(b) Practice‑High Court‑Reference to larger Bench‑Proper only when conflict of decisions in same High Court or in High Courts of same state.
Shahabuddin Ahmed for Appellants.
Md. Nurul Huda for Respondents.
Md. Yakub Hossain for the Deputy Registrar.
JUDGMENT
CHOWDHURY, C. J.‑This appeal by the defendants arises out of a suit for specific performance of a contract of sale of the disputed immovable property against defendants Nos. 1 to 22 and registration of the executed kabala or, in the alternative execution of afresh kabala and registration thereof and for confirmation of plaintiff's possession in the disputed land.
2. This appeal being valued at below Rs. 2,000 at first came up for hearing before a Single Bench and my learned brother Hasan, J. referred the case for disposal by a Divisional Bench as it involves a question of law on which there are conflicting decisions, namely, whether the suit for specific performance of contract for sale and execution and registration of a fresh kabala is maintainable in view of section 77 of the Indian Registration Act. Hence the case has come up before this Bench for hearing.
3. Facts of this case as alleged by the plaintiff, relevant for the purpose of this appeal, are as follows :‑
4. There was a contract for sale of the disputed land between the plaintiff and his sister, defendant No. 1 for a sum of Rs. 2,000 and in pursuance of that the defendant No. 1, on receipt of the consideration money, executed the kabala putting her thumb impressions in the stamp paper and signing her name by her husband below each of the thumb‑impressions in the Registration Office of Bhanga; but at the time for registration was up on that day the kabala could not have been registered and the parties came back home. Subsequently as the defendant No. 1 was not getting the kabala registered the plaintiff filed the kabala for registration on commission. The kabala was sent to Shibchar Registration Office within the jurisdiction of which defendant No. 1 resides, for registration on commission, but it was returned by the Sub‑Registrar with the endorsement that it could not have been registered for want of identification. Thereupon the registration was refused. The plaintiff filed an appeal which was rejected as time‑barred. Hence the suit for specific performance of contract and registration of the kabala executed, or, in the alternative, for execution and registration of afresh kabala and for confirmation of plaintiff's possession in the disputed land which he has got in pursuance of the contract for sale.
5. The suit was contested by the defendants Nos. 1 to 13 and 16 to 21 by a joint written statement. They denied the alleged con tract for sale with the plaintiff and pleaded bar of limitation and maintainability of the suit. Their case is that the plaintiff inten tionally defaulted once and again in payment of rent of the ejmali properties of the plaintiff and his sister, defendant No. 1, to purchase fraudulently their ejmali properties in rent sale and to defraud the defendant No. 1, who saved them every tinge from sale by snaking deposit and being thus disgusted at the defaulting conduct of her brother the defendant No. 1 settled to sell the land to one Nawab Ali and went to Bhanga and purchased stamp papers, but as the Sub‑Registrar was absent execution of the kabala could not have been done ; but as she took Rs. 200 from Nawab Ali, she handed over the blank stamp papers, with her thumb‑impression and her signature by her husband to Nawab Ali. Subsequently when Nawab Ali was not willing to purchase the land the defend ant transferred them to the other defendants for Rs. 4,500 In the meantime the plaintiff persuaded and gained over Nawab Ali and obtained those blank stamp papers on which he manipulated the disputed kabala and characterized the disputed kabala as fraudulent, forged and without consideration.
6. The defendants Nos. 2 to 22 further pleaded that they were bona fide purchasers for valuable consideration without notice of the plaintiff's contract or of his kabala.
7. Both the Courts below found that there was a contract for sale of the disputed land between the plaintiff and his sister, defendant No. 1, and in pursuance of that contract the defendant No. 1 executed the disputed kabala on receipt of the stipulated consideration money, but the trial Court relying on the decision of the Madras High Court in the case of Satya Narayana v Chinna Venkata Rao (I L R 49 Mad. 302), dismissed the suit holding that the suit for the specific performance of contract was not maintainable on account of the provisions of section 77 of the Registration Act under which the plaintiff should have filed a suit for getting the executed kabala registered. On appeal the learned Subordinate Judge took a contrary view relying on the decisions of the Calcutta. High Court in the cases of Surendra Nath Nag Chowdhury v. Gopal Chunder Ghosh (12 C L J 464 (467)), Nasiruddin Midda v. Bipta Das and others (27 C L J 538) and of the Dacca High Court in the case of Hafez Ahmed v. Obedur Rahman and others ((1955) 7 D L R 263), which 12c prefers to that of the Madras High Court reported in I L R 49 Mad. 302 as they are more appropriate to the facts of the present case than that of the Madras case where the suit for specific performance of the contract was against the executant alone, whereas in the present case the suit was not only against the executant but also against her subsequent transferees and decreed the suit holding that the suit for specific performance of contract for sale would lie. Hence this second appeal.
8. This appeal, as stated above, at first came up for hearing before Hasan, J. as the valuation of the appeal does not exceed Rs. 2,000. The learned Judge on account of conflicting view mentioned above has referred the case to be placed before a larger Bench. Hence this appeal has come up before us. There is no conflict of decision in this High Court nor in any of the two High Courts in Pakistan, rather they are unanimous, vide 7 D L R 263 and P L D 1953 Lah. 87.
9. As to whether in such circumstances the reference is justified, I like to quote the following passage from the judgment of Sir Murray Coutts Troiter, Kt., Chief Justice in the Madras case, reported in I L R 49 Mad. 302 at 308:
"But unfortunately the matter is covered with confliction authority. The authorities in Madras appears to differ from authorities in other parts of India. In matter which is open to divergence of view, my opinion is that this Court should follow its own cursus curiae unless it is of opinion that the former decisions of the Court are clearly wrong. I do not think, if it agrees with those decisions, that it ought to harass the parties with any argument before a Full Bench merely because of different views in other Court."
At the same time, I am not unmindful of a reference to a Division Bench in a similar circumstance in Patna High Court in the case of Jhamon Mahton v. Amrit Mahton and others (A I R 1945 Pat. 62), but that may be justified as the conflict was between two High Courts of India i.e., within the same state."
10. Be that as it may, the point involves in his case is whether in the facts and circumstances of the case, the suit for specific performance of contract for sale is maintainable in view of the provisions of section 77 of the Registration Act. There are conflicting authorities on the point. This conflict is between the Madras High Court on the one side and the Calcutta, Allahabad, Patna, Dacca and Lahore High Courts on the other. Madras High Court in the case of Venkatasami v. Kristayya (44 1 C 361), followed in the case of Satya Narayana v. Chinna Venkata Rao, held that if, on denial of execution by the vendor, a Registrar refuses to register a sale‑deed presented by the purchaser for registration, the sole remedy of the purchaser is to file a suit as provided by section 77 of the Registration Act within 30 days of the refusal and not a suit for specific performance of the contract, such as the execution of a new sale‑deed and registration thereof. The other High Courts mainly in the case of Surendra Nath Nag Chowdhury v. Gopal Chandra Ghosh, Nasiruddin Midda v. Bipta Das and others, same as Nasiruddin Midda v. Shidoo Mia (7 A L J 887), Amer Chand v. A'athu (A I R 1932 All. 96), Bala Kishan Das and others v. Bachan Pandey (P L D 1953 Lah. 87), Jhaman Mahton v. Amrit Mahton and others, Hafez Ahmed v. Obedur Rahman and others, Shah Muhammad v. Inayat Ullah and others took the contrary view.
11. In the case of Surendra Nath Nag Chowdhury v. Gopal Chandra Ghosh it has been held:
"Although a document, which has been executed, is inopera tive in law and wholly ineffectual to create title in the intended lessee, it is nevertheless evidence of a valid agreement to execute a lease and consequently forms the foundation of an action for specific performance."
This decision has been criticized in the Madras case reported in I L R 49 Mad. 302 p. 309 as " a very vicious method of con struction to say that a document, which purports to be one thing, is to be allowed to be treated when it is found imperfectly to contain what it purports to be as a valid document of a different order altogether."
12. The next Calcutta case Nasiruddin Mida v. Bihta Das and others, where the document was in the same stage as in the aforesaid Madras case, namely, it had been executed but one of them refused to acknowledge the right to have it registered and it has been held ‑
"As regards the claim to enforce registration of the document executed in his favour by his vendor, lie was no doubt bound to follow strictly the procedure prescribed by the Indian Registration Act before he could institute a suit under section 77 to compel registration. But as regards the alternative claim to enforce specific performance of the agreement to sell, there was really no answer to the suit. Although the vendors had executed the document they could not be deemed to have completely performed their part of the agreement. The agree ment in essence was not merely to execute a conveyance which until registered would be inoperative in law, but to transfer the full title from themselves to the plaintiff as purchaser. Such title could be transferred only by means of a registered instru ment; consequently, the execution of the conveyance, not followed by registration, could not be regarded as fulfillment of the contract. The true position then is that the agreement to transfer remained unperformed and the plaintiff was entitled to proceed against his vendors to compel them to fulfill their contract."
This view is also taken by the Allahabad High Court in the case of Amer Chand v. Nathu, which is as follows :‑
"His (plaintiff's) grounds of appeal are that the substantial relief sought by him was tire specific performance of the contract for sale and for possession of the property. We see no answer to this appeal. No defence to the action was disclosed by the defendants and in view of all the facts the Courts of first instance as well as the lower appellate Court ought, in our opinion, to have granted a decree for specific performance The Court of first instance was wrong in passing an order (that is no doubt true) for registration of the sale‑deed which was executed by the guardian of the defendants in view of the provisions of the Registration Act. But it appears to us that the Court has jurisdiction to direct performance of the contract and to require that the defendants should do all necessary for the purpose of fulfilling the obligation into which through their guardian they had entered and that the plaintiff is entitled to have a fresh sale‑deed executed by all necessary parties and to have the document so executed registered."
This view of the Calcutta and Allahabad High Courts has been criticised by the learned Chief Justice of the Madras High Court in the case reported in I L R 49 Mad. 302 p. 309, as follows:
"The reasoning of the learned Judges of the Calcutta High Court appears to this. The undertaking of a person who enters into a contract for sale of real property is to do everything whereby an operative agreement in law can be effected. He has not done everything if he failed in an instrument where the obligation is cast upon him to obtain its registration and, therefore, a step in the creation of the legal relation of purchaser and vendor being wanting, you can compel the person who has taken that step to take it. The answer appears to me to be very simple. Section 77 of the Registration Act not only tells you how you are to do that but says that if you want to effect that purpose of having registration forcibly carried out by a decree of that Court, you must do it within 30 days. It seems to me that these decisions in Calcutta and Allahabad in effect take upon themselves by a side wind to get rid of the period of limitation strictly imposed by the express words of the statutes. To my mind no judicial decision has any right to temper with a thing enforced and enjoined by a statute whose construction is free from possible doubt. The most that can be said is that the remedy given by the statute is not intended to be only one. It is almost impossible to believe that the Legislature can have intended that there should be a direct and an indirect way of effecting the same thing and that the period of limitation applic able to them should be entirely different."
13. Further reason given in support of the view taken in the case reported in I L R 49 Mad. 302 p. 314 is that laches will defeat all equitable claims:
"And it must be remembered that although in this country the remedy of specific performance is a statutory remedy, it nevertheless is simply a crystallization into statutory form of an equitable remedy to which laches, as it is to all equitable claims, an answer. How can it be said that a man who is given an express statutory remedy by an Act of Legislature under section 77 of the Registration Act and has failed to take advantage of it, has not been guilty of laches and entirely free from blames passes my comprehension."
14. Next case of Allahabad High Court is reported in A I R 1932 All. 96 where it has been held that mere failure of a suit under section 77 or its in fructuous termination cannot operate as res judicata in a subsequent suit brought for specific performance of the original contract and for recovery of possession of the immovable property. The latter suit is based on the original cause of action which was independent and separate from the cause of action arising from the refusal to register the document executed and that the remedy, which the plaintiff claims in the suit for specific performance of contract by executing a new and fresh document and for recovery of possession, which relief he could not have claimed in the previous suit under section 77 of the Registration Act. Section 77 does not provide the only exclusive relief to the transferee who paid the consideration and earnest money on the promise of the vendor to transfer to him the immovable property. There is absolutely no reason why he should not be able to enforce the contract specifically and obtained actual possession.
15. In coming to this conclusion the learned Judge followed the Calcutta and earlier Ailahabad and Patna decisions.
16. In case of Hafez Ahmed v. Obedur Rahman and others, it has been held that a contract for sale of immovable property cannot be said to have been specifically performed till the kabala is validly presented for registration and that once it is established that the contract was an executor contract and not an executed contract there is hardly any doubt that it would be attracted by section 27 (b) of the Specific Relief Act.
17. So also the Lahore High Court in the case of Shah Muhammad v. Inayat Ullah and others, took the same view as follows:
"When the vendor executes a deed of sale but it remains unregistered and the vendee sues for specific performance of the original contract the question that is to be considered is whether there is subsisting contract for sate or not. If the contract be subsisting the vendee has a statutory right subject to the provision of the Specific Relief Act to have the contract performed. The suit cannot be defeated merely because the deed executed had not been registered."
In some of these latter cases, Madras cases reported in I L R 16 Mad. 341 and I L R 49 Mad. 302 have been considered but not followed.
18. Even in the Madras case reported in I L R 49 Mad. 302 at page 313, maintainability of the suit for specific performance has been upheld in cases where the defendant held the document fraudulently or stolen it from the plaintiff and concealing it from the plaintiff for the purpose of preventing registration or in cases where soon after the execution, the document in question is lost or destroyed by fire before registration. It was so held on the ground that as things stood at the time of the suit he had nothing so ever to register. But that does not make any difference in principle on which suit for specific performance of contract was held to be not maintainable, in respect of an executed document which could not have been registered because of the refusal of the execution or on which suit for specific performance of contract for sale of immovable property is held to be maintainable. It is the original contract for sale which is sought to be specifically enforced by the suit and not the registration of the executed document to be barred under the Registration Act. It seems that there is some confusion between the two, because of the fact of the case reported in I L R 49 Mad. 302 where, of the several executants, only one, a Hindu widow, having little interest in the disputed property objected registration and did not appear to admit the execution and therefore, the document, so far as she was concerned, was not registered which was followed by a suit for specific performance of contract against all the executants. There is no doubt and there is no difference of opinion that al suit for specific performance of contract for registration of the very executed document is barred because of the specific provision f in the Registration Act. There again after the registration of the executed document there is nothing to be specially enforced by a suit. All the reasons given by the Madras High Court may be aptly applicable in suit only for specific performance of the implied contract for registration of the executed document and the observation as to the inadmissibility of the executed document as foundation of a suit for specific performance of contract for sale of immovable property might have been correct as has been pointed out, by the subsequent Privy Council decision in the case of James R. R. Skinner v. Robert Hercules Skinner and others (A I R 1929 P C, 769), where their Lordships held that an agreement for the sale of immovable property was a transaction "affecting" the property within the meaning of section 49 of the Registration Act inasmuch as, if carried out, it will bring about a change of ownership and to allow a document, which did itself create such an interest, to be used as the foundation of a suit for specific performance was an evasion of the Registration Act. Their Lordships have not said anything about the maintainability of the suit for specific performance of the contract, if the contract can be proved independently of the document executed.
19. Soon after the Privy Council decision in 1929, section 49 of the Registration Act has been amended and a proviso was added to the following effect :‑
"Provided that an unregistered document affecting the immovable property and required by this Act or by Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter 2, Specific Relief Act or as evidence of part perform ance of a contract for the purpose of section 53‑A, Transfer of Property Act, 1882 or as evidence of any collateral transaction not required to be effected by registered instrument."
20. After this amendment of section 49 of the Registration Act which specifically provides for specific performance of contract on the evidence of an unregistered document there can be hardly any doubt as to the maintainability of a suit for specific perfor mance of a contract for sale of immovable property if the executed document is not registered.
21. There can be hardly any difference in effect whether the document executed is presented for registration or not as my learned brother Hasan, J., seems to think in his referring judgment that there is. It is immaterial whether the executed document was presented for registration or not or there was failure in a suit under the Registration Act or its infructuous termination, because the cause of action for a suit for specific performance of contract is quite distinct and separate from the cause of action B for a suit under the Registration Act, in one the cause of action is the original contract and in the other the cause of action is the refusal to get the kabala registered and the scope of inquiry in the two suits are quite different. Of course, if the executed document is registered there is nothing left to be specifically enforced by a suit for specific performance because the contract is executed and no contract is subsisting.
22. On the facts and circumstances of this case, I therefore, hold that the suit for specific performance of the contract for sale and execution and registration of a fresh kabala in favour of the plaintiff by the defendants is maintainable.
23. Now coming to the other contention of Mr. Shahabuddin, the learned Advocate for the appellant, that the plaintiff failed to prove that the defendants are not bona fide purchasers for value with notice of the plaintiff's contract, there is a finding by both the Courts below that the defendants are purchasers with knowledge of the plaintiff's contract and that finding is based on the evidence of defendant No. 1 who is found to have entered into a contract of sale with the plaintiff. In her deposition she has stated thus:
Which can be translated thus:
"My brother is friendly with Goyezuddin Haji. Before I executed a kabala (in favour of Goyezuddin Haji and others) I told Goyezuddin that my brother had procured a kabala and creating trouble. My brother prohibited Goyezuddin not to take any kabala. I have not executed any kabala in favour of my brother. He has forged the kabala."
24. It is contended by Mr. Shahabuddin that, first of all, the deposition quoted above does not convey any notice of the contract as she all through denied the contract but it simply stated about the creation of a fraudulent kabala and so that will not constitute any notice of the plaintiff's contract. He also contends that even if it is a notice about the kabala or the contract of sale, it does not bind any other purchaser than Goyezuddin Haji, defendant No. 2, as there are 20 other purchasers, not of the same family or same house, but according to the finding of the Courts below, they are men of different localities, joined together for purchasing the property and the evidence of defendant No. 16 is that each one of them paid Rs. 225 towards the consideration of the purchase. Be that as it may, section 27 of the Specific Relief Act provides :‑
"Except as otherwise provided by this chapter specific perfor mance of a contract may be enforced against‑
(a) either party thereto ;
(b) any other person claiming under him by a title arising subsequently to the…
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