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PETITIONER: RAM SARAN LALL AND OTHERS

       Vs.

RESPONDENT: MST.  DOMINI KUER AND OTHERS.

DATE OF JUDGMENT: 27/04/1961

BENCH: SARKAR, A.K. BENCH: SARKAR, A.K. SINHA, BHUVNESHWAR P.(CJ) GUPTA, K.C. DAS AYYANGAR, N. RAJAGOPALA MUDHOLKAR, J.R.

CITATION:  1961 AIR 1747            1962 SCR  (2) 474  CITATOR INFO :  R          1969 SC 244  (11)  F          1972 SC2162  (4,5,7)

ACT: Registration-Sale-When complete-If complete only on date  of registration  Preemption Indian Registration Act, 1908  (XVI of 1908), ss. 47 and 61.

HEADNOTE: P executed a sale deed on January 31, 1946, in respect of  a house  in favour of D and presented it for  registration  on the  same  day.  On coming to know of the execution  of  the sale deed, the appellant who had a right of preemption, made the  talab-i-mowasibat  on February 2, 1946.  The  deed  was copied out in the Registrar’s books on February 9, 1946, and thereupon the registration became complete as provided in s. 61 of the Registration Act.  The appellant filed a suit  for preemption.  D resisted the suit on the ground that the sale was  completed on February 9, 1946, and the talab  had  been made  prematurely.  The appellant contended that in view  Of s.  47 Registration Act a registered document operated  from the  time it would have otherwise operated and the sale  was completed on the date of its execution. Held (per Sinha, C. J., Sarkar and Mudholkar, jj.) that  the sale  was  completed  only on February  9,  1946,  when  the registration   was  complete,  that  the  talab   was   made prematurely and that the suit must fail.  Section 47  merely permitted a document when registered to operate from a  date which  may  be  earlier  than  the  date  on  which  it  was registered, it did not say when the sale would be deemed  to be complete.  A sale which was required to be registered was not  completed  until  the  registration  of  the  deed  was completed. Tilakdhari  Singh  v. Gour Narain, A.I.R. (1921)  Pat.  150, Nareshchandra Datta v. Gireeshchandra Das, (1935) I.L.R.  62 Cal. 979, and Gobardhan Bar v. Guna Dhar Bar, I.L.R.  (1940) II Cal. 270, approved. Bindeshri  v.  Somnath Bhadry, A.I.R. (1916)  All.  199  and Gopal  Ram v. Lachmi Himir, A.I.R. (1926) All. 549,  distin-

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guished. Per Das Gupta and Ayyangar, jj. --The sale was completed  on the  day  of execution and the talab was made at  the  right time.   Section 61 had nothing to do with the time when  the sale  evidenced by the registered deed became  complete;  it refers  merely to the fact that the registering officer  had completed  his  duty.  Section 47 provided when a  sale  was deemed to be completed.  There was no difference between the time when a sale 475 became  effective  and  the  time it could  be  held  to  be completed.  Under s. 47 the crucial test for determining the time  from which the registered document was to have  effect or  be  deemed  to be completed was  the  intention  of  the parties.  The sale deed shows that the parties intended that the deed should be effective from the date of execution.

JUDGMENT: CIVIL APPELLATE, JURISDICTION: Civil Appeal No. 104 of 1959. Appeal  by special leave from the judgment and decree  dated December  19, 1956, of the Patna High Court in  Appeal  from the Appellate Decree No. 632 of 1949. M.   C.  Setalvad,  Attorney-General  of  India  and  R.  C. Prasad, for the appellants. S.   P. Varma, for respondent No. 1. N.   S. Bindra and D.  Gupta, for Intervener. 1961.   April 27.  The Judgment of Sinha, C. J., Sarkar  and Mudholkar, JJ., was delivered by Sarkar, J. The judgment  of Das Gupta and Ayyangar, JJ., was delivered by Ayyangar, J. SARKAR, J.-The parties to this litigation are all Hindus but it  is not in dispute that the Mohammedan law of  preemption is applicable to them by custom, nor that the appellants had a  right  of preemption.  The only question is  whether  the first  demand called talab-i-mowasibat which has to be  made after the completion of the sale in order that the right may be enforced, was made before or after such completion.   The making of the demand is not in dispute but the dispute is as to when the sale was completed. The appellants had their residential house contiguous to the house owned by certain persons whom we may call Pandeys.  On January  31,  1946, the Pandeys executed a deed of  sale  in favour  of  the  respondent purchaser in  respect  of  their aforesaid  house.   The  appellants claim a  right  of  are- emption   on  account  of  this  sale.   The   consideration mentioned in the deed was Rs. 2,000.  There was a subsisting mortgage on that house and the deed provided that out of the consideration a sum of Rs. 200 would be left with 476 the  respondent  purchaser for clearing off  that  mortgage. The deed also recited that the Pandeys had received Rs.  400 and  "the  remaining Rs 1,400 (Rupees fourteen  hundred)  in cash  at the time of exchange of equivalents, (that  is)  at the   time  of  (handing  over)  of  the  receipt  of   this deed...............  On  receipt  of the  whole  and  entire amount of consideration money we have put the said  claimant into  possession and occupation of this vended  property  as absolute owner in place of us, the executants and our  heirs and  representatives." The deed further stated,  "this  sale deed becomes operative from the date when we the  executants affixed-our  signatures  thereon.  Whatever title,  we,  the executants  and our heirs had............. with  respect  to this  vended property, has become extinct,  inoperative  and null  and void and the same has now been transferred to  and

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acquired  by  the  claimant." By the  word  "claimant",  the respondent purchaser was referred to. The  deed  was  presented at  the  registration  office  for registration  by the Pandeys on the day it was executed  and it  was left with the Registrar in the  Registration  Office for  the necessary entries and copies being made, a  receipt being  given  to  the Pandeys.  On  February  2,  1946,  the appellants on coming to hear of the execution of the deed of sale  made the talab-imowasibat.  On February 7,  1946,  the receipt  granted by the Registration Office to  the  Pandeys was made over by them to the respondent purchaser who there- upon  paid  the balance of the price as  stipulated  in  the deed.  On February 9, 1946, the documents were copied in the Registrar’s  books  and thereupon  the  registration  became complete as provided in B. 61 of the Registration Act.   The respondent  purchaser thereafter received the deed  of  sale from the Registrar’s Office on February 13, 1946. The appellants filed their suit for preemption on  September 9,  1946.  The suit was decreed by the trial court and  this decision  was maintained by the first Appellate Court.   The High  Court,  however,  in  second  appeal  set  aside   the decisions of the Courts below with the result that the  suit stood dismissed and 477 the  appellants  have  now come to  this  Court  in  further appeal. The  Mohammedan  law  of preemption  is  stated  in  Mulla’s Principles  of Mohammedan law in these terms: "The right  of preemption  arises  only out of a valid, complete  and  bona fide  sale." This statement of the law is accepted  by  both the parties and there is no question that it is not correct. There  is  furthermore  no  dispute that  the  sale  to  the respondent  purchaser was valid and bona fide.  It  is  also agreed  that one of the requisites before the right of  pre- emption  can be exercised is the preliminary demand  by  the preemptor  and  that  such demand must  be  made  after  the completion of the sale.  The case has been argued before  us on  behalf of the appellants on the basis that the sale  was governed  by  the Transfer of Property Act, 1882.   We  will also proceed on that basis. Section  54  of the Transfer of Property Act  provides  that sale  of tangible immovable property of the value of  rupees 100 and upwards, which the house with which we are concerned is, can be made only by a registered instrument.  Section  3 of  this Act defines "  registered" as registered under  the law for the time being in force regulating the  registration of  documents.  This, in the present case, means the  Regis- tration  Act  of  1908.   It is  not  in  dispute  that  the registration under the Registration Act is not complete till the  document to be registered has been, copied out  in  the records  of the Registration Office as provided in s. 61  of that  Act.  It was therefore con. tended in the  High  Court that  when a sale had to be made by a registered  instrument it  became  complete only on the instrument  of  sale  being copied  in the books of the Registration Office.   The  High Court accepted this view and held that the sale in the  pre- sent  case, therefore, became complete on the completion  of the registration of the instrument of sale which was done on February  9, 1946 when the instrument was copied out in  the books  of  the  Registration Office.  In this  view  of  the matter, the High Court 61 478 came to the conclusion that the appellants were not entitled to  enforce their right of preemption because they  had  not

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made the preliminary demand after the completion of the sale as  the  law required them to do, but before,  that  is,  on February 2, 1946. In  answer  to  this view of the  High  Court,  the  learned Attorney-General appearing for the appellants says that  the High  Court  overlooked s. 47 of the  Registration  Act  the effect  of which was to make a registered  document  operate from the time from which it would have commenced to  operate if  no registration thereof had been required and  not  from the time of its registration.  His contention is that once a document  is  registered, as the deed of sale in  this  case was,  it  begins  to operate from the  time  it  would  have otherwise operated and therefore, the position in this  case is  that  the sale became operative and  hence  complete  on January  31,  1946.  The  learned  Attorney-General  further contends  that the proper construction of the deed  of  sale was  that it became operative from the day it  was  executed and that if it was not so, it was not a sale but could  only be  an agreement to sell in which latter case  his  clients, though  this present suit might fail, would be entitled,  if they  so desired, to enforce their right of preemption  when the  sale was completed in pursuance of that agreement.   As authority in support of his contention that in view of s. 47 of the Registration Act the sale in the present case must be deemed to have been completed on the day the instrument  was executed,  the learned Attorney-General relied on  Bindeshri v. Somnath Bhadry (1) and Gopal Ram v. Lachmi Misir (2). We   do  not  think  that  the  learned   Attorney-General’s contention is well founded.  We will assume that the learned Attorney-General’s  construction of the instrument  of  sale that the property was intended to pass under it on the  date of   the   instrument  is  correct.   Section  47   of   the Registration Act does not, however, say when a sale would be deemed  to  be complete.  It only permits  a  document  when registered, to operate (1) A.I.R. (1916) All. 199. (2) A.I.R. (1926) All. 549. 479 from a certain date which may be earlier than the date  when it was registered.  The object of this section is to  decide which  of two or more registered instruments in  respect  of the same property is to have A effect.  The section  applies to  a  document only after it has been registered.   It  has nothing  to do with the completion of the  registration  and therefore nothing to do with the completion of a sale,  when the  instrument is one of sale.  A sale which is  admittedly not  completed until the registration of the  instrument  of sale  is  completed, cannot be said to have  been  completed earlier  because by virtue of s. 47 the instrument by  which it  is effected, after it has been registered, commences  to operate  from  an earlier date.  Therefore we do  not  think that the sale in this case can be said, in view of s. 47, to have  been completed on January 31, 1946.  The view that  we have  taken of s. 47 of the Registration Act seems  to  have been  taken  in  Tilakdhari Singh v. Gour  Narain  (1).   We believe  that the same view was expressed  in  Nareshchandra Datta  v. Gireeshchandra Das (2) and Gobardhan Bar  v.  Guna Dhar Bar (3). With  regard to the two cases on which the Attorney  General has  relied,  it  has  to be observed  that  they  were  not concerned  with a right of pre-emption arising on a sale  of property.  Bindeshri Prasad’s case (4) was concerned with  a suit for zar-i-chaharum.  It does not appear from the report what  that right was or when it arose.  It is  not  possible therefore  to derive much assistance from it.   Gopal  Ram’s

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case(’) was concerned with a right of pre-emption arising on the  grant of a lease and the question was whether the  suit for   the  enforcement  of  such  a  right  was  barred   by limitation.   It appears that Art. 120 was applied  to  that suit  and  it  was held that the cause  of  action  for  the excrcise  of the right of pre-emption arose as soon  as  the lease was executed and even before it was registered  though before  the  actual registration the  suit  for  pre-emption could not have been maintained. (1)  A.I.R (1921) Pat, 150. (2)  (1935) I.L.R. 62 Cal. 979 (3)  I.L.R. (1940) II Cal. 270 (4)  A.I.R. (1916) All. 199. (5) A.I.R. (1926) All 549. 480 This  view  was  taken  in  reliance  upon  s.  47  of   the Registration Act.  We are not aware whether the law of  pre- emption  applicable to the case required  that there  should be  a completed lease before the right to pre-empt could  be enforced.  If that law did so require, then we do not  think that the case was rightly decided.  It was said in that case that   "When   the  law  has  given  to  a   transaction   a retrospective  effect, it must have that effect." We do  not think that a transaction which when completed has a  retros- pective  operation can be said for that reason to have  been completed on the date from which it has that operation. In  the  view  that we have taken, it is  not  necessary  to discuss  the question of the construction of the  instrument of  sale  in this case, that is, to decide  whether  on  its proper  reading the transfer was intended to take  immediate effect on its execution or later on after the balance of the purchase money had been paid.  Nor do we think it  necessary to pronounce on the other argument of the learned  Attorney- General  that a transfer which does not convey the  property immediately can only be an agreement to transfer. We  think  that  for  these  reasons  this  appeal  must  be dismissed and we order accordingly.  The appellants will pay the costs of this appeal. AYYANGAR,  J.-We regret that we are unable to agree  to  the order dismissing this appeal. The  facts have been very fully set out in the  judgment  of Sarkar, J. and it is therefore unnecessary to repeat them. The  following matters are beyond dispute: (1) that the  law that  is  applicable to govern the right  of  the  appellant before  us  is  the  law of  pre-emption  as  understood  in Mohammedan  law,  (2) that according to  the  principles  of Mohammedan  law, the right of pre-emption arises and  the  2 talabs have to be performed immediately on the completion of a  valid,  and bona fide sale, and (3) that the  two  talabs which are required to be performed by a person claiming  the right  of pre-emption have been performed by the  appellant. There being further no dispute that a sale did take 481 place, the only point in controversy in the appeal is as  to whether  the talabs which were performed on February  2,1946 were  performed  by the appellant after the  right  of  pre- emption  accrued to her, viz.,, after the sale in favour  of the respondent was effected or were they premature. At one time there was a controversy as to whether it was the principle  of the Muslim law that would determine the  point of  time when a sale should be taken to be  complete  (under which system crucial significance was attached to two of the ingredients  of a sale, viz., payment of  consideration  and delivery  of possession) or whether after the  enactment  of the  Transfer of Property Act it was to the statute  and  to

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the  creteria  laid  down  by it that one  has  to  turn  to determine  when a sale should be held to have  taken  place. The  former view found favour with the majority of the  Full Bench of the Allahabad High Court in Begam v. Muhammad  (1), Justice   Banerjee  dissenting  from  the  majority.    This controversy,  however,  is  long past and it  has  now  been decided  by  this  Court in Radha Kishan v.  Shri  Dhar  Ram Chandra (2) that the provisions of the Transfer of  Property Act  supersede the principles of the.  Mohammedan law as  to sale and it was to the statute that one should look to  find out whether, and if so when, a sale was complete in order to give rise to a right of pre-emption. Turning  now to the provisions of the Transfer  of  Property Act,  in  the case of a sale of immovable  property  of  the value of Rs. 100 or over (as in the case before us) s. 54 of the  Act  enacts  that  it  could  be  effected  only  by  a registered   instrument;  sale  itself  being   defined   as "transfer  of  ownership  in exchange for a  price  paid  or promised  or part paid and part promised".  In other  words, the  essence  of  a  transaction of  sale  consists  in  the transfer  of ownership and this transfer has to be  effected by "a registered instrument".  The Transfer of Property  Act while   prescribing   the   formalities   of   writing   and Registration,  does not itself determine the point  of  time when  a  sale  becomes  complete.   "Registered"  under  the Transfer (1) I.L.R. 16 All. 344. (2) [1961] 1 S.C.R. 248 482 of  Property  Act means: "registered under the law  for  the time   being  in  force  regulating  the   registration   of documents" (s. 3).  When one turns to the Registration  Act, provision  is  made, inter alia for the  time  within  which after  its  execution  a document  could  be  presented  for registration,  the persons who could so present, the  office in  which  the  document  could  validly  be  presented  and registration  effected  and sub-Part B of Part  11  starting from  s. 58 deals with the procedure on admitting  documents to registration. Section 60(1) enacts:               "After such of the provisions of sections  34,               35,  58  and  59  as  apply  to  any  document               presented for registration have been  complied               with,  the registering officer  shall  endorse               thereon  a  certificate  containing  the  word               registered’, together with the number and page               of  the  book in which the document  has  been               copied." and  s. 61 which follows makes provision for the copying  of documents   in   Public  registers  from  which   the   word "registration" is derived and enacts:               "61.  (1).  The endorsements  and  certificate               referred  to and mentioned in sections 59  and               60  shall thereupon be copied into the  margin               of the Register book, and the copy of the  map               or plan (if any) mentioned in section 21 shall               be filed in  Book No. 1.               (2)The  registration  of  the  document  shall               thereupon be deemed complete, and the document               shall  then  be  returned to  the  person  who               presented  the  same for registration,  or  to               such other person (if any) as he has nominated               in  writing  in  that behalf  on  the  receipt               mentioned in section 52." Much  reliance  has been placed by learned Counsel  for  the

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respondent  and, indeed, in the judgment of the High  Court, on  the  words  the  "registration  of  the  document  shall thereupon be deemed complete" occurring in sub-s. (2) of  s. 61.   But  in the context of the fasciculus of  sections  in which it appears it is clear that it refers to the fact that the  registering officer had completed his duty and  had  no more  to  do  with the document  presented  to  him,  beyond returning the original to the party entitled to receive  the same.  In 483 our  opinion, these words have nothing to do with  the  time from  which  the  transaction  covered  by  the   registered document operates or with reference to the present  context, when  the  sale  evidenced by the  deed,  becomes  complete. Specific  provision  is  made  for these in  s.  47  of  the Registration Act which reads:               "A registered document shall operate from  the               time  from  which it would have  commenced  to               operate  if no registration thereof  had  been               required or made, and not from the time of its               registration." The  principles  underlying  ss.  61(2)  and   47  are   not divergent.   It is not as if, that any delay by  the  regis- tering officer which might take place owing to the  pressure of work in his office or for other reason, has any effect on the rights of parties, quod their property or the time  from when  the deed operates, or as regards the effectiveness  of the  transaction, or the priority of transactions inter  se. It is not as if, documents executed on different dates,  the parties  intending them to operate at different times,  have their intentions modified, if not nullified by the action or inaction of the registering officer, or any delay that might take  place  in his office.  A contention  that  though  the Muslim law of sale is superseded by the Transfer of Property Act  and  the  Registration  Act,  but  yet  the   provision contained  in s. 47 of the Registration Act is  inapplicable to determine when a sale effected by a registered instrument should  be complete could not be sustained on any  principle or  logic,  or of course on any rule  of  interpretation  of statutes.   In our opinion no distinction is possible to  be drawn  between  a sale which is effective and one  which  is complete since they are merely different forms of expressing the  same concept and for the same reason between  the  time from  when  a sale becomes effective and when it  should  be held to be complete.  As under Muslim law the talabs have to be  performed only immediately after the preemptor  receives information   of  the  sale,  the  view  we  take   of   the applicability  of s. 47 of the Registration Act,  introduces no  element of hardship in the exercise of the  option.   We are,  therefore, clearly of the opinion that the  time  when the sale becomes complete so as to 484 entitle  the  preemptor  to perform  the  talabs  should  be determined by the application of the principle of  intention laid down in s. 47 of the Registration Act Which is as  much a part of the positive law governing the right of preemption as  the provision of s. 54 of the Transfer of  Property  Act which,  requires  a registered instrument to effect  a  sale which gives rise to a right of preemption. If, therefore, B. 47 of the Registration Act should apply to determine the time from which the registered document should have effect or, in other words, the time from which the sale should be held to be complete, the intention of the  parties would be the crucial and only test.  That has to be gathered by reference to the document itself read in the light of the

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surrounding  circumstances, with however a proviso  that  if the document were clear and its terms explicit, no  evidence to contradict them would be admissible.  Paragraph 4 of this document  of the sale-deed Ex.  ’A’ dated January  31,  1946 recites the consideration for the same.  This was to consist of  Rs. 2,000.  Out of this, it states that the vendors  had received Rs. 400 in cash at the time of the execution of the document, and that Rs. 200 had been left with the  purchaser for  payment to a previous possessory mortgagee.  In  regard to the balance of Rs. 1,400 the recital reads:               "and  received the remaining sum of Rs.  1,400               in   cash   at  the  time   of   exchange   of               equivalents, (that is) at the time of  handing               over  of  the receipt of this deed.   In  this               manner  we have received the entire amount  of               consideration  money for this vended  property               from the claimant and brought the same to  our               possession and use." It is, no doubt, true that the sum of Rs. 1,400 had not been received  on January 31, 1946, the date of the execution  of the document and that it was agreed that  sum would be  paid in  exchange for the delivery of the receipt  obtained  from the  Registrar  in respect of the  sale-deed  presented  for registration.   But  the  use  of  the  past  tense  clearly indicates  that the vendor agreed to the promise to pay  the balance of Rs. 1,400 as the consideration for the  execution of the                             485 document  on  January 31, 1946, as tantamount to  an  actual payment.  In other words, in terms of s. 54 of the  Transfer of  Property  Act  it  was a  transaction  under  which  the property in the house was to be transferred in exchange  for a price "part paid and part promised".  Paragraph 4 and  the recital  there do not indicate any intention that the  title to  the property was to be conveyed only on the  payment  of Rs. 1,400 on the surrender of the registration receipt.  If, however, there was any doubt as to what the intention of the parties was, it is made clear by the other stipulations  and recitals which follow.  Paragraph 5 opens with the words:               "On receipt of the whole and entire amount  of               consideration  money  we  have  put  the  said               claimant  into  possession and  occupation  of               this  vended  property as  absolute  owner  in               place  of us the executants and our heirs  and               representatives." The  reference to the receipt here is obviously  based  upon treating  the  entire consideration of Rs. 2,000  as  having been  received on the day of the execution of the  document. In other words, part of the consideration was paid and  part promised and the promise was treated as the consideration in respect  of  the  balance  unpaid.  Besides  and  as  if  to reinforce  their intention the deed goes on to  state  after the  words  of  conveyance  "I have  executed  the  deed  of absolute sale and jointly received Rs. 2,000 as per recitals in the body." That the title of the vendee was not to be postponed to  any date  beyond  the date of the execution of the  document  is made  clear  by the further words in para 5-"It  is  desired that  the  said  claimant should enter into  and  remain  in possession  and  occupation  of the vended  property  as  an absolute  owner"-which was to be from and after the date  of the  execution  of the deed.  Turning next to  paragraph  6, there is an express stipulation as regards when the transfer should  be  deemed  effective.   It  says:  "This  sale-deed becomes  operative  from the date when  we,  the  executants

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affixed our signatures thereon"-a recital which is  repeated and reinforced by paragraph 7 in which dealing 62 486 with  the title of the vendors, it is stated that  the  said title  with  respect  to the  vended  property  "has  become extinct, inoperative and null and void and the same has  now been  transferred to and acquired by the claimant".  In  the face  of  these recitals, covenants and  stipulations  which clearly  express the intention of the parties that the  deed should  have effect from the date of its execution it  seems to  us  that the argument that it could be  postponed  to  a later  date-either  the  date  when  the  registration   was complete under the terms of s. 61 of the Indian Registration Act or to February 7, 1947 when on the registration  receipt having  been handed over to the vendee, the vendor  received the balance of Rs. 1,400 is hardly tenable. If  this  were the true legal effect of the deed and  if  by virtue  of  the provisions of the Transfer of  Property  Act read  in conjunction with those of the  Indian  Registration Act, the title to the property was transferred to the vendee immediately on the execution of the document on January  31, 1946  the performance of the two talabs by the appellant  on February  2,  1946  would  be in  time,  legal,  proper  and effective to clothe her with a right to demand a  conveyance in  her  favour.  It is only necessary to add  that  learned Counsel for the respondent did not contest the position that if on a proper construction of the sale deed Ex. ’A’-read in the  light  of  its  recitals  and  the  relative  statutory provisions-there  was a sale effective on  January’31,  1946 the  talabs performed by the appellant would not suffice  to clothe her with the right which she claimed in the suit  out of which this appeal arises. We  would accordingly allow the appeal and decree  her  suit with costs throughout. By  COURT.-In accordance with the opinion of  the  majority, the appeal is dismissed with costs.                             487