Sashikanta Mishra, J
1. The Plaintiffs in C.S. No.6/2012 in the court of Civil Judge (Sr. Division), Boudh, are the appellants. In the present appeal, they seek to challenge
the judgment dated 08.2.2018 passed by learned District Judge, Boudh, followed by decree in R.F.A No.22/2017 confirming thereby the judgment
dated 19.5.2017 followed by decree passed by the Trial Court in the aforementioned suit.
2. The present respondent was the sole defendant in the suit. The suit of the plaintiffs was dismissed by the trial Court while the counter claim of the
respondent was allowed, which was confirmed by the lower appellate Court.
3. For convenience, the parties are referred to as per their respective status in the trial Court.
4. The plaintiffs’ case, briefly stated, is that they being the son and father respectively executed two agreements for sale on 18.7.2009 of the suit
property in favour of the defendant. The suit property consisted of two lots in the plaint as described in the schedule. The consideration was fixed at
Rs.67500/- each, which was paid in full. The plaintiffs also delivered possession to the defendant. Since the suit property was subjected to
consolidation and the proposed sale would create a fragment, applications seeking permission of the consolidation authority were submitted by the
plaintiffs under Section 34 of the Orissa Consolidation of Holdings and Prevention of Fragmentation of Land Act, 1972 (OCH & PFL Act). It was
stipulated in the agreements that the deeds of conveyance would be executed after obtaining permission. However, permission could not be obtained
within the stipulated period mainly because of non-cooperation by the defendant. Under such circumstances, the plaintiffs filed the suit praying for a
decree of declaration that the two agreements dated 08.7.2009 are null and void and inoperative and further, for recovery of possession.
The defendant entered appearance and contested the suit by filing written statement. She claimed that the full consideration amount was paid and she
was in cultivating possession of the land, same being duly delivered to her. She further alleged that the plaintiffs did not take proper step in the
permission cases before the Consolidation Officer for which they were dismissed for non-prosecution. The defendant further alleged that the plaintiffs
claimed additional consideration citing escalation of price in the market, which led to the dispute between them for which the plaintiffs did not
deliberately prosecute the permission applications. The plaintiffs issued notices to the defendants offering to return the consideration and when the
defendant enquired the reason, they claimed enhanced consideration.
5. The defendant also filed a counter-claim seeking a direction to the plaintiffs to execute the deed of conveyance in respect of the suit lands in her
favour after obtaining necessary permission from the competent authority within a stipulated period as well as for award of damages of Rs.2 lakhs in
her favour.
The plaintiffs filed written statement to the counter-claim questioning its maintainability and raising the plea that they were still in possession over the
suit land. They further alleged that permission from the competent authority could not be obtained due to inaction of the defendant. As such, they were
compelled to issue pleader’s notices to the defendant for revocation of their agreements and to refund the advance money taken by them.
6. On the rival pleadings as above, the trial Court framed the following issues for determination;
(1) Is the suit maintainable?
(ii) Have the plaintiffs any cause of action to bring the suit ?
(iii) Whether the agreements dated 15.07.2009 entered into between the parties are null and void, in operative and not binding on the plaintiffs ?
(iv) Whether the plaintiffs are entitled to recovery of the possession of schedule ""A"" & ""B"" suit land, if they are found dispossessed?
(v) Whether the defendant is to get back her advance money from the plaintiff after due revocation of the agreements ?
(vi) To what other relief or reliefs, the parties are entitled ?
7. The plaintiffs examined two witnesses including the Plaintiff No.1 as P.W.1 and proved the documents marked Exts.1 to 9. The defendant
examined 3 witnesses including herself as D.W.1 and proved the documents marked Exts.A to J. Originally, the trial Court decreed the suit in part by
judgment dtd.31.7.2013 and dismissed the counter-claim. The defendant challenged the decree before the District Judge in RFA No.17/2013. The
appellate Court held that the agreements for sale marked Exts. A and B required compulsory registration, but the defendant should have been given
opportunity to pay stamp duty and penalty for impounding the documents by the Court. It was also held that the defendant being the land owner of the
contiguous Chaka, no permission was necessary for the proposed transfer as the same did not violate the provision of Section 34 of the OCH and PFL
Act. The suit was thus remanded for fresh disposal permitting the defendant to pay the stamp duty and penalty on the two agreements for sale. After
remand, the trial Court heard the matter afresh and this time it was held that the defendants having paid stamp duty and penalty, the agreements for
sale marked Exts.A and B are valid documents. Since the plaintiffs, after receiving the consideration money had delivered possession of the suit lands
to the defendant, they are not entitled to recovery of possession thereof. It was also held that the defendant is the real purchaser of the suit lands and
is in possession and thus, the counter-claim was partly allowed with direction to the plaintiffs to execute and register the sale deeds in her favour after
obtaining necessary permission from the competent authority at the cost of the defendant. The suit was thus dismissed and the counter claim was
allowed in part.
8. The plaintiffs carried the matter in appeal to the District Court being RFA No.22/2017. After considering the grounds raised, the lower appellate
court framed the following points for determination;
(A) whether both the agreements for sale in respect of the suit lands A and B required compulsory registration and if so whether the Defendant who relies on the
same should be given opportunity to pay required stamp duty and penalty after impounding the same and not to abruptly declare those as null and void?
(B) whether for the proposed sale transaction of the suit, Section 34 of the OCH and PFL Act, 1972 was a bar ?
9. After analyzing the evidence on record, the findings of the trial Court and the rival contentions, the lower appellate Court held that since the
defendant had paid stamp duty and penalty, there was nothing wrong in accepting the same as evidence in the case. It was further held that as per
Section 17(i)(v) and the proviso to Section 49 of the Registration Act, the unregistered agreement for sale can be admitted into evidence. The lower
appellate court also took note of the fact that the plaintiffs had received full consideration amount and had delivered possession of the suit lands to the
defendant. On the above findings, the appeal was dismissed.
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Being further aggrieved, the plaintiff-appellants have filed the present Second Appeal.
10. The Second Appeal has been admitted on the following substantial questions of law;
“(i)Whether the courts below have gone wrong in Law in holding that the unregistered agreements are admissible in evidence though not as instrument of title
having failed to notice that the Defendant in her counter claim has categorically admitted that possession has been delivered in pursuance of the Agreements for
sale, registration of which is compulsory under Section 17(1-A) of the Registration Act, 1908 and the consequential provisions of the State Amendment of the Act ?
(ii) Whether the Courts below before entitling the Respondent (Defendant) to a decree of specific performance of contract, in the facts and circumstances of the case
were under the legal obligation to record a finding that the Respondent (Defendant) was all along ready and willing to perform her part of the contract and the
contract had not been completed for the reasons/causes attributable only to the Appellants (Plaintiffs)?â€
11. Heard Mr. D.P.Mohanty, learned counsel for the appellants and Mr. B.S. Dasparida, learned counsel for the Respondent.
12. Mr. Mohanty assails the impugned judgments by contending that both the Courts below fell into error by holding that payment of stamp duty and
penalty upon impounding the documents by the Court cured the defect of non-registration of the documents as per Section 17(1-A) of the Registration
Act. Since both the documents are compulsorily registerable as per the above provision, they could not have been accepted as valid in the eye of law.
Mr. Mohanty also refers to the provision under Section 17(1)(f) of the Orissa Amendment. According to him, Exts.A and B could not have been
accepted as valid documents for the purpose of enforcement of the right of the specific performance of contract. He has also relied upon the
judgments of the Supreme Court in the cases of Mst. Kirpal Kuar v. Bachan Singh and others AIR 1958 SC 199 and K.B. Saha and Sons Pvt.
Ltd. v. Development Consultant Ltd. 2008(8) SCC 564
13. On the other hand, Mr. Dasparida would argue that once the lower Appellate Court remanded the matter to the trial Court with specific direction
to grant opportunity to the defendant to pay Stamp Duty and penalty and same having been duly complied with by the defendant, the documents
acquired validity in view of Section 35 of the Stamp Act and were therefore, admissible in evidence. Further, in view of the provision of Section 49 of
the Registration Act also, the documents became admissible in evidence. According to Mr. Dasparida therefore, the counter-claim of the defendant
was rightly allowed by the trial Court and confirmed by the lower Appellate Court.
14. In view of the rival submissions noted above, the first point that falls for consideration is, regarding the validity of the agreement for sale executed
on 18.7.2009 between the plaintiffs and the defendant marked Exts.A and B. Admittedly, the agreements were not registered. What would be the
effect of such a document? In this regard, the relevant provisions under the Registration Act, 1908 are to be examined. Section 17 of the Registration
Act, deals with documents of which registration is compulsory, sub-section (1-A) of which reads as follows;
“(1-A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53-A of the Transfer of Property
Act, 1882, shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001, and if
such documents are not registered on or after such commencement then, they shall have no effect for the purposes of the said section 53-A.â€
15. Be it noted that the above provision was inserted in the statute by Amendment Act 48 of 2001 w.e.f. 24.9.2001. Section 17 was also amended in
its application to the State of Odisha by inserting clauses (f) and (g). Clause (f) being relevant in the present context, is quoted below;
“(f) Agreement to sell immovable property possession whereof has been or is handed over to the purported purchaserâ€
16. Before proceeding further, it would be apt to mention here that the crux of the dispute lies in the determination of validity of Exts.A and B. It is
undisputed that the consideration amount of Rs.67500/- each was paid by the defendant to the plaintiffs. It is also admitted by the plaintiffs that
possession was delivered. The suit land being part of Chaka lands and the proposed sale having the effect of creating a fragment, necessary
permission of the competent authority was required to be obtained as per Section 34 of the OCH and PFL Act. It was therefore provided in the
agreements that the deed of conveyance would be executed after obtaining the necessary permission. In fact, the plaintiffs had applied for permission
being Misc. Case Nos.9/2010 and 11/2010. It has been otherwise stated that the defendant is a contiguous land owner and therefore, the bar under
Section 34(2) would not apply. The defendant raised a counter claim in the suit asking for direction to the plaintiffs to execute the sale deed in her
favour as per the agreement after obtaining permission. This in effect amounts to a suit for part performance of contract where the defendant claims
to have performed her part of the contract by way of paying the full consideration amount. Further, the defendant also claims to be in possession. This
is therefore, not a claim for specific performance of contract simplicitor, but a suit for part performance of contract, which entails performance of the
plaintiffs’ part of the contract by way of obtaining permission and executing the sale deed. In other words, this is a suit of the nature described in
Section 53-A of the Transfer of Property Act (T.P. Act). Such being the case, the provision of Section 17(1-A) would come into play. Admittedly, the
agreements were not registered and therefore, ordinarily the same could not form the basis of the counter-claim filed by the defendant in view of
Section 17 (1-A) of the Act.
17. Both the Courts below have taken the view fact that the documents being impounded, the defendant paid stamp duty and penalty as per Section 35
of the Indian Stamp Act, 1899 and therefore, same are admissible in evidence. The question is, whether payment of stamp duty and penalty would
cure the defect of non-registration as provided in Section 17(1-A) of the Registration Act. It must be kept in mind that even an unregistered
agreement can be used for collateral purposes and may be received as evidence of a contract in a suit for Specific Performance under Chapter-II of
the Specific Relief Act, 1963. But then, this Court has already held, for reasons indicated, that the suit, i.e. the counter claim of the defendant is not a
suit for Specific Performance of Contract, per se, but a suit for part performance of contract within the meaning of Section 53-A of the T.P. Act.
Therefore, though an unregistered document may be admitted into evidence as per Section 49 of the Registration Act as also in terms of Section 35 of
the Indian Stamp Act, there is no provision by which it can be held that mere payment of stamp duty or penalty would validate the contract for the
purpose of Section 53-A of the T.P. Act overcoming the bar placed in Section 17(1-A) of the Registration Act. Mere admissibility of a document as
evidence cannot in any manner do away with the mandatory requirement of registration as contemplated under Section 17(1-A) as otherwise the very
provision itself would be rendered otiose. A reading of the impugned judgment would reveal that this is where both the Courts below fell into error by
treating the documents as valid only because stamp duty and penalty was paid by the defendant. Such being the case, the counter-claim could not
have been entertained much less allowed on the basis of the unregistered agreement for sale at the instance of the defendant. This Court therefore,
finds considerable force in the contention of the appellants as noted above.
18. Such being the finding of this Court, what would be the natural corollary vis-Ã -vis the agreements for sale? Once the validity of the agreements is
set at naught, it goes without saying that the defendant cannot be said to have acquired any manner of right, title or interest over the suit land on such
basis.Â
19. Notwithstanding the finding as above, in view of the fact that the defendant is admittedly in possession over the suit land, it is to be seen as to how
far would she be entitled to protect the possession being the purported transferee of the contract for sale. In this context, it would be useful to refer to
the provision under Section 53-A of the Transfer of Property Act which reads as follows:
“53-A. Part performance. Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from
which the terms necessary to constitute the transfer can be ascertained with reasonable certainty,
and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, in
part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the
contract,
 then, notwithstanding that [***] where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law
for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under
him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the
contract.â€
Be it noted that by amendment effected on 24.9.2001 the words, “the contract, though required to be registered, has not been registered,†was
omitted from this provision. But then, by an amendment to the Registration Act also effected on 24.9.2001, Section 17 was amended to insert subâ€
section (1-A), which has already been quoted hereinbefore. Thus, the cumulative effect of the above provisions as they exist, is that such a contract
cannot be enforced for the purposes of Section 53-A. In other words, possession of the defendant over the suit land in view of non-registration of the
contract would also become unlawful. The plaintiffs would therefore, be fully entitled to ask for recovery of possession subject of course to the
condition that the consideration amount received by them from the defendant is refunded.
20. Thus, from a conspectus of the analysis of the facts and law and the discussion made herein before, this Court is of the considered view that both
the Courts below committed manifest error in allowing the counter claim of the defendant and in dismissing the suit of the plaintiffs. The impugned
judgments therefore, warrant interference by this Court.
21. In the result, the appeal is allowed. The impugned judgments are set aside. The suit filed by the plaintiffs is decreed by holding them entitled to
recovery of possession of the suit lands from the defendant subject to the condition that they shall refund the consideration amount of Rs.67500/-each
received by them to the defendant along with interest @ 7% per annum calculated from the date of receipt of the amounts by them within three
months. Further, the counter-claim filed by the defendant is dismissed. There shall be no further order as to costs.
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