While observing that the need to take into consideration the surrounding circumstances and the conduct of parties in deciding the passing of title would arise only if the recitals in the document are indecisive and ambiguous, the Supreme Court said that the High Court has committed a serious error based on perverse appreciation of evidence, in setting aside the judgment and decree of the First Appellate Court decreeing the subject suit and in restoring the decree of dismissal of the suit of the trial Court.

A Two Judge Bench of Justice M.R. Shah and Justice C.T. Ravikumar clarified that “where a deed of sale had been duly executed and registered, its delivery and payment of consideration have been endorsed thereon it would amount to a full transfer of ownership so as to entitle its purchaser to maintain a suit for possession of the property sold”.

S.M. Jadhav & Company appeared for the Appellant, whereas, Lambat & Associates appeared for the Respondent.

Going by the background of the case, as per the plaint, the first two Original Defendants sold the suit field in favour of the Plaintiff as per registered sale deed. Soon on its execution the Plaintiff was put in possession but the second defendant started disturbing his possession. Suit was then filed in 1979. In view of the registered sale deed, he obtained absolute title over the suit land and in such circumstances, the second defendant who sold the same for discharging debts and family got no right or reason to disturb his peaceful possession. The total sale consideration of ten thousand was given to defendants for the said entire extent of over 3 acres as the first defendant obtained title over 2 acres out of the total extent from the second defendant as per registered sale deed and the second defendant remained as the owner in possession of the balance one acre. It was his case that the second defendant had utilised the sale consideration passed on to him for different purposes, including to pay his debts. Thereafter, for the non-compliance with the order of the Chamber Judge, the SLP stood dismissed qua sixth respondent.

When the matter reached the Trial Court, it was concluded that the plaintiff had not purchased the suit field as claimed and the sale deed was a sham document which was executed only as a security for a money lending transaction and consequently, the original suit was dismissed with costs. The Regular Civil Appeal, filed by the unsuccessful plaintiff before the First Appellate Court was allowed.

After considering the submissions and referring to the Fragmentation Act, the Apex Court observed that it is only aimed at preventing the fragmentation of agricultural holdings and to provide for the consolidation of agricultural holdings for the purpose of the better cultivation thereof.

The Apex Court further observed that the decision of the High Court on the validity of the sale transaction covered under the sale deed executed by the second defendant in favour of the first defendant, in terms of the provisions under the Fragmentation Act (when that question was not legally available to be considered in the subject suit) and the virtual declaration of the said sale as void, were unsustainable.

The very object of the mandate for registration of transfer of an immovable property worth more than Rs. 100/- under Section 54 of the Transfer of Property Act, 1882, read with Section 17 of the Indian Registration Act, is primarily to give certainty to title. When execution is challenged, registration by itself is no proof of execution and proof of complying with Section 67 of the Evidence Act is necessary”, added the Court.

While affirming the fact that there can be no reason to disbelieve a recital contained in a registered sale deed regarding payment of consideration, executed by the vendor, the Apex Court elucidated that if it is said to have already been paid, going by the registered sale deed, certainly it is for the vendor asserting non-passing of consideration to prove the said asserted fact.

Certainly, parol evidence is admissible to show that a contract embodied in a document was never intended to be acted upon but was made for some collateral purpose”, added the Court.

The Bench went on to highlight that in view of the factum of registration of the sale deed and admission of its execution and the recording of payment of consideration thereon, the second respondent was not justified in raising grievance, initially, even against the sale of the extent of one acre.

Thus, noticing that by virtue of Section 54 of the Transfer of Property Act and Section 17 of the Registration Act and since the immovable property was worth more than Rs 100, the deed was reduced in writing and registered, the Bench concluded that the intention of the parties was also reflected specifically in the deed and at the same time, nothing reflected a contra-intention not to pass the title and ownership even impliedly therein.

Cause Title: Damodhar Narayan Sawale (D) through LRs. Vs. Shri Tejrao Bajirao Mhaske and Ors.

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