RAMACHANDRA NAIDU Vs. RAMAYYA NAIDU

JUDGEMENT

(1.) THIS appeal arises out of a suit for specific performance filed by the plaintiff, who has succeeded in both the Courts below. The defendants' contention was that the agreement in question was really a usufructuary mortgage and that there was no agreement to sell, which could be specifically enforced. Both the Courts below have found against the contention of the defendants that it was only a usufructuary mortgage and their decision on this point is undoubtedly correct on the facts of the case. In this Court, in addition to the contention that the agreement in question is only a usufructuary mortgage, the appellants have also raised the question that the deed of agreement is really a sale deed and therefore, it cannot be specifically enforced, though this point has not been raised in the memorandum of appeal. As I have already pointed out, the conclusion of the courts below that the agreement is not a usufructuary mortgage is quite correct. The other contention put forward in this Court is in a sense really contradictory of the stand taken by the defendants in the Courts below. I shall, however, deal with it.

(2.) THE agreement Ex. A-1 states that the defendants have agreed to sell the properties, that they have also received the sum of Rs. 5281 in full, towards the sale price, that on that date itself they handed over possession of the properties mentioned in the schedule attached to that letter, that the plaintiff, should take possession of the properties absolutely and enjoy the same, and that whenever he demands the execution of a regular document of sale, on that day, at his own expense, the defendant should execute and register a document of sale in plaintiffs favour. The contention of the defendants, as I have already mentioned, is that this amounts to a document of sale I do not think that is correct. The document does not contain any words of conveyance. It does not say that the executants of that document were selling their properties. It only says that they had agreed to sell. The mere fact that the document mentions that the executants have received the sale consideration or that possession has been handed over to the plaintiff does not mean that it can be interpreted as a deed of conveyance. Apart from that, there is also a specific agreement contained in that document by which the executants have agreed to execute a document of conveyance whenever the plaintiff wanted. That agreement itself could be specifically enforced. Therefore, the argument on behalf of the defendants, that this being a document of sale and being unregistered a decree for specific performance based on it cannot be granted cannot be accepted. This itself is enough to dispose of the contention of the appellants. But, however, I shall deal with the question even on this basis that it amounts to a document of sale.

(3.) THE first decision on which reliance was placed is one in J. R. Skinner v. R. H. Skinner, AIR 1929 PC 269. It was held there that an agreement for the sale of immoveable property is 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 does itself create such an interest to be used as the foundation of a suit for specific performance is an evasion of the Registration Act. In that case, the document stated that the vendor confirmed it to be a complete and conclusive sale and that by virtue of that sale and agreement if the vendee considers necessary, the vendor would always be ready to execute and register a power of attorney or give the vendee any other document of help, the vendee may demand. Unlike the document in that case, the document in the present case is merely an agreement to sell and does not mention that it is a sale. That apart, both the Registration Act as well as the Transfer of property Act were amended subsequently in order to nullify the effect of this decision of the Privy Council. The effect of the amendment was summed up as follows in the Full Bench decision of this Court in Subramanian Chettiar v. Arunachalam Chettiar, 1943-2 Mad LJ 424 at p. 426 = (AIR 1943 Mad 761 at p. 762) (FB):