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Dahiben Vs. Arvindbhai Kalyanji Bhanusali (D) thr. L.Rs. and Ors. - (Supreme Court) (09 Jul 2020)

Non-payment of a part of the sale price would not affect the validity of the sale

MANU/SC/0508/2020

Property

The present Civil Appeal has been filed to challenge the impugned Judgment passed by a Division Bench of the Gujarat High Court, which affirmed the Order of the trial Court, allowing the application filed by Defendant Nos. 2 and 3/Respondent Nos. 2 and 3 herein under Order VII Rule 11(d), Code of Civil Procedure, 1908 (CPC) holding that the suit filed by the Appellant and Respondent Nos. 9 to 13 herein (the "Plaintiffs") was barred by limitation. The subject-matter of the present proceedings pertains to a plot of agricultural land of old tenure ("suit property") which was in the ownership of the Plaintiffs.

The land was under restrictive tenure as per Section 73AA of the Land Revenue Code. The Plaintiffs filed an application before the Collector, to obtain permission for selling the suit property to Respondent No. 1/Defendant No. 1, which was non-irrigated, and stated that they had no objection to the sale of the suit property. After obtaining permission from the Collector, the Plaintiffs sold the suit property to Respondent No. 1 herein. The Respondent No. 1 subsequently sold the suit property to Respondent Nos. 2 and 3 herein vide registered Sale Deed.

The Plaintiffs filed Special Civil Suit against the original purchaser i.e. Respondent No. 1, and also impleaded the subsequent purchasers i.e. Respondent Nos. 2 and 3 as Defendants. It was prayed that the Sale Deed dated 2nd July, 2009 be cancelled and declared as being illegal, void, ineffective and not binding on them, on the ground that the sale consideration fixed by the Collector, had not been paid in entirety by Respondent No. 1. The Trial Court, on the basis of the settled position in law, held that the suit of the Plaintiffs was barred by limitation, and allowed the application under Order VII Rule 11(d) of CPC. The High Court affirmed the findings of the Trial Court, and held that the suit was barred by limitation, since it was filed beyond the period of limitation of three years. Aggrieved by the impugned Judgment and Order passed by the High Court, the original Plaintiff No. 1 has filed the present Civil Appeal.

The test for exercising the power under Order VII Rule 11 of CPC is that, if the averments made in the plaint are taken in entirety, in conjunction with the documents relied upon, would the same result in a decree being passed. If on a meaningful reading of the plaint, it is found that the suit is manifestly vexatious and without any merit, and does not disclose a right to sue, the court would be justified in exercising the power under Order VII Rule 11 of CPC. The power under Order VII Rule 11 of CPC may be exercised by the Court at any stage of the suit, either before registering the plaint, or after issuing summons to the Defendant, or before conclusion of the trial, as held by this Court in the judgment of Saleem Bhai v. State of Maharashtra. Order VII Rule 11(d) provides that where a suit appears from the averments in the plaint to be barred by any law, the plaint shall be rejected.

If the case made out in the Plaint is to be believed, it would mean that almost 99% of the sale consideration allegedly remained unpaid throughout. It is, however inconceivable that if the payments had remained unpaid, the Plaintiffs would have remained completely silent for a period of over 5 and ½ years, without even issuing a legal notice for payment of the unpaid sale consideration, or instituting any proceeding for recovery of the amount, till the filing of the present suit in December 2014.

In Vidyadhar v. Manikrao and Anr., this Court held that the words "price paid or promised or part paid and part promised" indicates that actual payment of the whole of the price at the time of the execution of the Sale Deed is not a sine qua non for completion of the sale. Even if the whole of the price is not paid, but the document is executed, and thereafter registered, the sale would be complete, and the title would pass on to the transferee under the transaction. The non-payment of a part of the sale price would not affect the validity of the sale. Once the title in the property has already passed, even if the balance sale consideration is not paid, the sale could not be invalidated on this ground. In order to constitute a "sale", the parties must intend to transfer the ownership of the property, on the agreement to pay the price either in praesenti, or in future. The intention is to be gathered from the recitals of the sale deed, the conduct of the parties, and the evidence on record.

In view of the law laid down by this Court, even if the averments of the Plaintiffs are taken to be true, that the entire sale consideration had not in fact been paid, it could not be a ground for cancellation of the Sale Deed. The Plaintiffs may have other remedies in law for recovery of the balance consideration, but could not be granted the relief of cancellation of the registered Sale Deed.

The delay of over 5 and ½ years after the alleged cause of action arose in 2009, shows that the suit was clearly barred by limitation as per Article 59 of the Limitation Act, 1963. The Plaintiffs have failed to discharge the onus of proof that the suit was filed within the period of limitation. The plaint is therefore, liable to be rejected under Order VII Rule 11(d) of CPC. Reliance is placed on the recent judgment of this Court rendered in Raghwendra Sharan Singh v. Ram Prasanna Singh (Dead) by LRs.5 wherein this Court held the suit would be barred by limitation under Article 59 of the Limitation Act, if it was filed beyond three years of the execution of the registered deed.

The present suit filed by the Plaintiffs is clearly an abuse of the process of the court, and bereft of any merit. The Trial Court has rightly exercised the power under Order VII Rule 11 of CPC, by allowing the application filed by Respondent Nos. 2 & 3, which was affirmed by the High Court. The present Civil Appeal is dismissed with costs of Rs. 1,00,000 payable by the Appellant to Respondent Nos. 2 and 3, within a period of twelve weeks from the date of this Judgment.

Relevant : Saleem Bhai v. State of Maharashtra. MANU/SC/1185/2002, Vidyadhar v. Manikrao and Anr. MANU/SC/0172/1999

Tags : SALE DEED   REGISTRATION   VALIDITY  

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