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TMI Blog1959 (1) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... purchaser will pay the balance of the purchase money, viz., Rs. Nine Thousand only to each of the vendors on or before the 10th day of October, 1946 and on payment of the balance of the purchase money, each of the vendors will execute and register in favour of the purchaser or his nominee a proper and valid conveyance of their sixth undivided share in the aforesaid premises known as the Wakefield Estate subject to the liabilities hereinbefore mentioned and deliver possession of their share to the purchaser. The costs of stamp on the conveyance and registration charges and purchaser's Solicitors fees will be borne by the purchaser. And the purchaser will pay and discharge the liability under the mortgage indenture and under the aforesaid promissory note for Rs. Fifty-nine thousand only and all other liabilities payable in respect of the said Wakefield Estate. The promissory note referred to in that paragraph is the note, which had been executed by all the six persons in favour of one Ricobthas Fathaimull Company for Rs. Fifty-nine thousand. Paragraph 5 of the agreement is in these terms: If the vendors should fail to execute and register the conveyance when called upon, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the defendant's 1/6th share in the Wakefield Estate. 7. The defendant admitted execution of the agreement, dated 13th September, 1946 and receipt of Rs. 10,000 the price payable to the defendant for his 1/6th share of the Estate. The defendant pleaded however that the plaintiff had not discharged the liabilities which, under paragraph 3 of the agreement, dated 13th September, 1946, he was bound to discharge, that that the defendant was not bound to execute any conveyance or release deed until those liabilities were discharged. The defendant denied that he had agreed in July, 1949, that he would execute a release deed instead of a sale deed. In regard to the release deed Exhibit A-2, the defendant pleaded that the date and month of the release deed filed in Court had been tampered with. He did not deny the genuineness of his signature found in that document. He pleaded that the suit to enforce the agreement of 1946 was barred by limitation. In regard to the alleged agreement to execute a release deed, the defendant pleaded that, even if true, the agreement had been performed by the execution of the release deed filed in Court and that the plaintiff was not entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o call on the defendant to execute a deed of conveyance. On those findings, the learned Subordinate Judge dismissed the plaintiff's suit. 10. The first question for decision is whether, under the terms of the agreement, Exhibit A-1, the plaintiff was bound to discharge the liability under the mortgage and the promissory note and other liabilities payable in respect of the estate (referred to in paragraph 3 of the agreement) before the plaintiff could call upon the-defendant or any of the other four vendors to execute a conveyance, in respect of his undivided 1/6th share in the Estate. In paragraph 3 of the agreement, the plaintiff's right to obtain a sale-deed is linked to his obligation to pay the price on or before 10th October, 1946. His obligation to discharge the mortgage promissory note and other liabilities is an independent obligation, which would give rise to a claim for damages in the event of the plaintiff not discharging those liabilities and the vendors or any of them being damnified thereby. Clause 3 of Exhibit A-1 says that, on the price being paid the vendors will execute and register in favour of the purchaser or his nominee a proper and valid conveyance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e promissory note in favour of Messrs. Ricobthas Fathaimull Co. That belief was unfounded. Therefore, the fact that the defendant wrote on 10th October, 1946, that he would execute a sale only after the promissory note had been discharged cannot affect the plaintiff's right under Exhibit A-1 to demand a sale-deed as soon as he had paid the price. 12. The next question for determination is whether the plaintiff and the defendant agreed in July, 1949, that, in the place of a conveyance, which under Exhibit A-1 the defendant had promised to execute, the defendant would execute a deed of release. A deed of release was actually executed by the defendant in favour of the plaintiff. 13. The reason why a deed of release was executed instead of a conveyance is that one Sivarama Iyer, who had been a Revenue Inspector and who was a document writer, advised the parties that a release deed would be less expensive than a conveyance but would be equally effective and the parties accepted his advice. According to P.Ws. 1 and 2, Sivarama Iyer, gave that advice and all the five vendors including the defendant accepted the advice and agreed in July, 1949, to execute release deeds. Two of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endant does not deny his signature to the document. He admits that he read the document before he signed it. In the written statement, the defendant stated the date and month of the alleged release deed .... have been tampered with . He did not specify the month or the date when he executed the document. He suggested to the plaintiff in cross-examination that the month was corrected from September to October. He did not suggest that any alteration in the date (apart from the month) had been made. As D.W. 2, however, the defendant said that he signed Exhibit A-2 in January, 1949. That is-also the evidence of his witness D.W. 3. The learned Subordinate Judge thinks that the document had been typed out on 30th January, 1949 and that, since the defendant signed the document on 30th October, 1949, the word January was erased and the word October substituted. It is not likely that the document was typed out in January, 1949, because the agreement to execute a release deed was entered into only in July, 1949. It is probable that this particular release deed and other release deeds were typed out in July. The probability also is that the space for typing the date and the month wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he conveyance registered was not discharged by handing the document over to the plaintiff. Since the defendant had expressly undertaken the duty of having the document registered, the defendant would, after handing the document over to the plaintiff, have to call upon him to present it for registration or to deliver it back to the defendant for being presented for registration. It is only if the plaintiff declined, on being so called upon, either to present the document for registration or to deliver it to the defendant that the defendant would be relieved of his obligation to have the document registered ; and not otherwise. The defendant does not say that he called on the plaintiff to present the document for registration or deliver the document to him (defendant) for being presented for registration. Therefore, the responsibility for non-registration on the specific promise embodied in Exhibit A-1 is that of the defendant and not that of the plaintiff. 20. But let us assume that, by taking the document from the defendant, the plaintiff undertook responsibility for getting the document registered. That is to say, let us treat this as an ordinary case, where the vendor agrees t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so and that the plaintiff did not present the document for registration because he believed in good faith that if the time for registration of that particular document expired, the defendant would execute another release deed and get it registered. We hold that the responsibility for failure to have the document registered is the defendant's and not the plaintiff's. 23. The next question for decision is whether the agreement to execute a release deed became superseded by Exhibit B-2, the agreement, dated 30th November, 1949. (The date 29th November, 1949 in the defendant's written statement appears to be a mistake for 30th November, 1949). The point was not argued at the hearing of the appeal. It is adequately considered in paragraph 10 of the learned Subordinate Judge's judgment. Exhibit B-2 relates to the discharge by the plaintiff of certain, liabilities of the business which had been carried on under the name and style of Wakefield Tea Estate Company . It has nothing to do with the execution of a release deed by the defendant or the registration of the release deed which had been executed by the defendant on 30th October, 1949, or the performance of the ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed a decree that the defendant do execute and register a fresh deed of transfer. In second appeal, Muttuswami Ayyar and Handley, JJ. held that it was out of the question that a decree could be passed directing registration of the deed of transfer which had been executed. The document would have to be presented for registration within the period allowed and, since the period had expired, no decree directing its registration could be passed. The learned Judges had then to consider whether the decree passed by the lower Courts directing the execution of a fresh deed of transfer was correct. On that question, 'the learned Judges said: The fallacy of the lower Courts consists in treating the document (Exhibit A) as evidencing merely an agreement to transfer the mortgage, whereas it purports to be an operative transfer of the mortgage. If it had been merely an agreement to transfer contemplating a future formal deed of transfer, it would not have required registration, Section 17(h). The agreement to transfer the mortgage was so far carried out that the deed of transfer was executed and no suit will lie to compel defendant to do that which he has already done. The only act wanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case was within the principle of Venkataswami v. Krishnayya (1893)3MLJ169 . The Court re-affirmed the proposition that it was not open to the plaintiff, in regard to a document which had become inoperative by reason of non-registration, to call on the Court to read it as an agreement to sell. An expression of opinion to the contrary made in Venkata Seetharamayya v. Venkataramayya (1912) I.L.R. 37 Mad. 418 was pronounced to be an obiter dictum and was dissented from. 27. Dealing with the contention that a sale-deed which had become inoperative for want of registration should be read as agreement to sell, Coutts-Trotter, C.J., said in Satyanarayana v. Chinna Venkatarao I.L.R. (1925) Mad. 302 : (1925) 50 M.L.J. 674. I should have thought it a very vicious method of construction 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. 28. The judgments referred to above were handed down before the introduction by the Transfer of Property (Amendment) Supplementary Act (XXI of 1929) of the existing Proviso to Section 49. The secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th a view to prove the antecedent agreement to sell. When such antecedent agreement is proved, the question whether, notwithstanding the execution of the unregistered sale deed, the antecedent agreement to sell is outstanding for enforcement would have to be heard independently and decided. 30. There is one other category of cases in which a definite alteration in the law was effected by the enactment of the proviso. Such alteration was the immediate purpose of the enactment. The law applicable to that category of cases was laid down by the Judicial Committee of the Privy Council in Skinner v. Skinner (1929) 57 M.L.J. 765 : L.R. 56 IndAp 363 : I.L.R. (1929) All. 771. In that case, there was an instrument of transfer which created a present interest in immovable property. The document, in order to be operative to affect the property, had to be registered. But it was not registered. The document, however, contained an agreement that the defendant would execute another document, if called upon by the plaintiff. But that agreement that the defendant would execute another document was a term of the transfer purported to be effected by the document. Their Lordships held that, because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not touch the present question. In that case, there was an agreement of lease which, for want of registration, was inoperative to affect the property comprised in it. The plaintiff sued for damages for breach of the agreement of lease. The question was whether the document was admissible in evidence. It was held that it was. No question arose in that case of the plaintiff's right to read the document as other than it was, namely, as an agreement of lease. 34. We hold that the proposition laid down in Venkataswami v. Krishnayya (1893)3MLJ169 , namely that a deed of transfer, which by reason of non-registration, is ineffective to affect the immovable property comprised therein, cannot be read as an agreement to execute a deed of transfer in future, continues to be a correct statement of the law on that point and that its validity has not been affected by the enactment in 1929-1930 of the proviso to Section 49 of the Registration Act. 35. We have now to consider the second proposition laid down in Venkataswami v. Krishnayya (1893)3MLJ169 , relating to the right of the plaintiff, who has in his possession an unregistered deed of transfer, to call on the defendant to execute a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecution of a fresh document and registration of such document. This Court held that the remedy of specific performance was an equitable remedy, which was not available to a person who had been guilty of laches. Coutts-Trotter, C.J., said: How it can be said that a man who was 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 is entirely free from blame passes my comprehension. It appears to me that a man who has failed to adopt the remedy expressly provided by the statute cannot come to this Court and ask for an exercise in his favour of discretionary and equitable remedy. In that view, the suit was dismissed. That decision was followed in Venkatasubbayya v. Venkatarathnamma (1954) 1 M.L.J. 396. 38. The question arises, what happens if the plaintiff's suit under Section 77 of the Registration Act to compel registration of the document fails. Would he be entitled thereafter to institute a suit for specific performance ? That question is answered in Manuka Goundan v. Elumalai Goundan (1956) 2 MLJ 536 . The document considered in that case had been ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of transfer may be decreed in his favour if it is found that the refusal to register the first document was on grounds which could not disentitle him to the equitable remedy of specific relief. 40. We have now to consider the second class of cases where the plaintiff, having an unregistered (and for that reason inoperative) document in his possession, sues for a decree directing the execution of a second document. 41. Venkataswami v. Krishnayya (1893)3MLJ169 , was a case in which the plaintiff sued for the execution of a second document without having presented the first document for registration. The lower Courts found that the defendant was not justified in his refusal to register the document. On that ground, this Court did not allow the defendant-appellant his costs. That decision, if it stood by itself, would seem to make it a rigorous rule of law that a person who had obtained a document but had failed to present it for registration would not, while he continued in possession of the document, be entitled, in any circumstances, to institute a suit for a decree directing the execution of a second document. The rigour of that rule has, however, been modified by subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration of a proper conveyance. It is true that the purchaser can resort to proceedings under the Registration Act and the special statutory remedy under Section 77 of that Act to obtain registration of the executed document. But if for any reason it becomes impossible to obtain registration after resort to such proceedings or because of other circumstances which prevent any resort to such proceedings under the Act, then undoubtedly the vendee is entitled to bring a suit for specific performance of the agreement to sell in his favour. This does not, however, mean that every such suit should be decreed. Being an equitable remedy a Court is not bound to grant specific performance in every case in which an agreement has not been carried out in its entirety. Well established equitable considerations would justify a Court refusing to grant the relief of specific performance. To take an obvious case, if the vendor duly executes a sale deed and hands it over to the vendee and the vendee neglects to present it for registration within the time prescribed and therefore loses his right to have it registered, a Court may well say that the plaintiff has only to blame himself for not securing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the agreement of July, 1949, although that agreement is not specifically referred to in Exhibit A-2 (Please see Section 97 of the Evidence Act). The liability acknowledged under Exhibit A-2 was not discharged by the mere execution of the release deed. Exhibit A-2 cannot be regarded as a document discharging the liability until it was registered. It has not been registered. Therefore, the acknowledgment of liability contained in it can be given effect to for the purpose of saving limitation for enforcing the agreement of July, 1949. 46. We hold that the plaintiff is entitled to a decree directing the defendant to execute release deed. 47. The plaint contains an alternative prayer that the defendant be directed to execute a conveyance. Under Exhibit A-1, the defendant promised to execute a conveyance. But that promise was superseded by consent by the promise made in July, 1949, that a deed of release would be executed and is not outstanding for enforcement. We hold that the plaintiff is not entitled to ask for the execution of conveyance on the basis of the agreement Exhibit A-1. 48. The plaintiff's claim to have a conveyance executed is rested in the alternative o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iting, which the plaintiff may subsequently find to be necessary in order to secure title, would, under that clause in Exhibit A-2 have to be executed by the defendant, provided the plaintiffs claim that such further document be executed was reasonable and the plaintiff offered to bear the expenses of the execution and registration of such document. Among the many reservations which Srinivasa Aiyangar, J., made in his exhaustive judgment if I may say so, in Valambalachi v. Duraiswami Pillai AIR1928Mad344 , is the following: If in a sale or sale deed there should be a covenant for further and better assurance, the right to get a fresh document may conceivably be covered by such a covenant. That was said before the amendment of Section 49 of the Registration Act by the introduction of the proviso. The proviso places the plaintiff's right in that matter beyond the plea of controversy. We hold that, in enforcement of the promise made by the defendant in Exhibit A-2 to sign and execute all deeds and writings for better securing the estate, the plaintiff is entitled to have a proper deed of conveyance executed by the defendant at the plaintiff's cost and registered. 49. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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