2009 (2) TMI 825 - SC - Indian Laws

Suit seeking declaration of title to the suit properties - hand over possession and to pay past mesne profits - Whether title to the disputed properties passed to the appellant when the sale deed dated 26.6.1983 was registered on October 26, 1983, though admittedly no amount was paid towards consideration to the respondents - execution of the sale deed on June 26, 1983 - instrument was presented for registration on October 21, 1983 and registered on October 26, 1983 - HELD THAT - We find that the parties intended that ownership of the property would be transferred to the appellant only after receipt of the entire consideration by the vendors, as a condition precedent. The operative portion of the sale deed clearly states that the vendors have agreed to receive ₹ 40,000/- in the presence of the Sub- Registrar on the date of the registration of the sale deed and that in consideration of payment to be so made, the property was being conveyed to the purchaser. This makes it clear that the title was intended to pass only on the payment of balance consideration of ₹ 40,000/- in the presence of the Sub-Registrar. This is also supported by the evidence of DW-1 to DW-4. The Sub-Registrar has also clearly recorded that no amount was tendered or paid by the purchaser to the vendors in his presence. Therefore title in fact did not pass either on execution or registration of the sale deed. It is admitted that possession of the suit properties purported to have been sold under the sale deed was never delivered to the appellant and continued to be with the respondents. In fact, the appellant, therefore, sought a decree for possession of the suit properties from the respondents with mesne profits. If really the intention of the parties was that the title to the properties should pass to the appellant on execution of the deed and its registration, the possession of the suit properties would have been delivered to the appellant. All the three courts have also concurrently found that the appellant had pleaded a false case that he had paid a part of the balance consideration, that is, ₹ 25,000/- on July 21, 2003 to the respondents to enable them to purchase lorry. This case of the appellant was disbelieved by the trial court as well as the first appellate court which is the final court of facts. That finding was not challenged by the appellant before the High Court. From the averments made in the plaint it is evident that the appellant was ready and willing to make payment of only ₹ 15,000/- and not ₹ 40,000/-. He had never shown his readiness or willingness to make payment of ₹ 40,000/- which was the balance of the consideration and which had to be paid only in the presence of the Sub-Registrar, as mentioned in the deed. Therefore, the first respondent who was present before the Sub-Registrar on behalf of the respondents on October 26, 1983, was justified in not signing or affixing his thumb mark in the endorsement of registration to be made on the deed, by the Sub-Registrar. Therefore, we are of the considered view that the parties really intended that title of ownership to the suit properties would pass to the purchaser, only after payment of full consideration by the purchaser to the vendor as a condition precedent. Parties did not intend that there should be transfer of ownership merely on execution and registration of the deed. The trial court and first appellate court having misinterpreted the legal position, the High Court rightly set aside the decree passed in favour of the appellant and dismissed the suit. No ground is made out by the appellant to interfere with the decision of the High Court. Therefore, the appeal, which is devoid of merits, deserves dismissal.

Summary

Issues:
Title passing to the appellant upon registration of the sale deed without full consideration payment.

Analysis:
The case involved a dispute over the passing of title to a property upon registration of a sale deed without full payment of consideration. The appellant claimed to have paid a portion of the consideration, while the respondents denied receiving it. The trial court decreed in favor of the appellant, holding that title had passed upon registration, and the respondents' remedy was to sue for the balance. The District Judge allowed the appeal partly, requiring the appellant to deposit the balance before obtaining possession. The High Court set aside the decree, concluding that title did not pass without full payment. The Supreme Court analyzed the legal principles of sale, emphasizing that ownership transfer in a sale is not contingent on full payment, as per Section 54 of the Transfer of Property Act. However, the intention of the parties, as reflected in the sale deed and surrounding circumstances, determines title transfer. In this case, the sale deed explicitly stated that title would pass upon full payment, supported by the vendors' refusal to sign the deed due to outstanding balance. The appellant's claim of partial payment was found false, leading to the conclusion that title did not pass upon registration. The courts concurred that full payment was a condition precedent for title transfer, justifying the High Court's decision to dismiss the suit. The Supreme Court upheld the High Court's judgment, dismissing the appeal for lack of merit.

This detailed analysis highlights the legal intricacies surrounding the passing of title in a property transaction, emphasizing the significance of the parties' intention as reflected in the sale deed and supporting evidence. The judgment underscores the importance of full payment as a condition precedent for ownership transfer, despite registration of the sale deed. The courts' consistent interpretation of the facts and legal principles led to the dismissal of the appeal, affirming that title did not pass to the appellant without full consideration payment.