Santosh Dnyanoba Gawade And ... vs Prakash Nensukh Navlakha
2022 Latest Caselaw 3790 Bom

                            Sr.27--Reserved-29.03.2022 & Pronounced-07.04.2022.doc



      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                    CIVIL APPELLATE JURISDICTION

             Appeal from Order No. 422 / 2021
                             Alongwith
          Interim Application No. 3270 / 2021
                           in
            Appeal from Order No. 422 / 2021

Santosh Dnyanoba Gawade and Others                          ... Appellants
                        Versus
Prakash Nensukh Navlakha and Others                         ... Respondents


                         ****
Senior Advocate Mr. Anil Anturkar alongwith Tushar
Sonawane    a/w   Ranjeet    Shinde,  Advocate   for
Appellants.
Mr. R.D. Soni alongwith V.R. Kasle i/by Ram and Co.,
Advocate for Respondents.
                          ****

                        CORAM        : SANDEEP K. SHINDE, J.

                        RESERVED ON :    29th MARCH, 2022.
                        PRONOUNCED ON:   7th APRIL, 2022.


ORAL JUDGMENT :

1.   In   the      Special        Civil        Suit       No.       102/2020

instituted    by    the     Respondents-Plaintiffs,                   seeking

cancellation       of    registered        sale      deeds,       perpetual

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injunction and alternatively for recovery of Rs.

3,57,50,073/-, the learned trial Court at

intermediate stage, vide order dated 11th February,

2021 restrained the Appellants-Defendants from

creating the third party rights in the suit

properties. That order is challenged, under Order-

43 Rule -1(r) read with Section 104 of the Civil

Procedure Code.

2. Briefly stated facts of the case are like this;

Plaintiff executed instrument of registered sale

deed, dated 26th February, 2020, in respect of suit

properties in favour of Defendant No.1 and 2 for lum

sum consideration of Rs. 4,00,00,000/-. The sale

deed was registered with Sub-Registrar Haveli No.6

at Pune. Towards the consideration, Defendant No.1

and 2 paid part of it, by RTGS and issued postdated

cheques. Six cheques were returned unpaid in the

month of April and July, 2020. Thereafter

Plaintiffs did not deposit eleven cheques (all

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postdated) as requested by the Defendant No. 1 and

2. It is Plaintiffs case that during June to

August, 2020, Defendants paid Rs. 6,00,000/- by

RTGS. Thus, out of Rs. 4,00,00,000/-, the Defendnat

No.1 and 2 paid only Rs. 79,7417/-; leaving balance

of Rs. 3,20,25,829/-. In spite of these facts,

Defendant No.1 and 2 sold suit properties to the

Defendant No. 3 to 14 by executing sale deeds dated

on 3rd July, 2020; 7th July, 2020; 6th August, 2020;

14th August, 2020 and 19th August, 2020. Although the

Defendant No. 1 and 2 were repeatedly called upon to

pay balance purchase price, they evaded to pay under

one pretext or other. Constrained thereby,

Plaintiffs filed suit on 21st September, 2020,

against the Defendants seeking following reliefs;

(a). cancellation of the sale deeds in respect of

properties described in Paragraph No.1 (i) to 1(iii)

of the plaint;

(b). declaration that the sale deeds in respect of

properties described in Paragraph 1(iv) to 1(viii)

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of the plaint are not binding on them;

(c). alternatively for recovery of amount of Rs.

3,57,50,073/-;

(d). for consequential relief for injunction and

other reliefs.

3. Pending suits, Plaintiffs sought injunction to

restrain Defendants from creating third party

rights/ interest in the suit properties.

4. Defendant No.1 and 2 denied the suit claim, they

contended, that on execution of the sale deed and

upon its' registration, title in the suit properties

has passed on to them and therefor, suit seeking

cancellation of the sale deeds was maintainable.

Their case is after acquiring title vide sale deeds

executed in July, August and September, 2020 they

sold the suit properties to the Defendant No. 3 to

14. Besides it is their case that, before executing

the sale deed dated 26th February, 2020, they paid

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Rs. 2,14,96,199/- in cash to the Plaintiffs towards

consideration of purchase price, when transaction

was captured in the CCTV. In support thereof, they

produced a pendrive. As such according to them,

they owe Rs. 976657/- to the Defendants. Therefore,

it is their case, that Plaintiffs cannot seek

cancellation of the sale deed, and at the most; the

suit may be maintainable only for recovery of

balance consideration. It is their contention that

after executing the sale deed, the revenue record of

the suit properties were altered. Thus, relying on

the revenue records, respecting the suit properties,

Defendant No.3 to 14 purchased the same from them

under different sale deeds. As such Defendant No.3

to 14 are bonafide purchasers. On these grounds, the

Defendant no.1 and 2 opposed the temporary relief

sought by the Plaintiffs.

5. Defendant No. 3 to 14 claimed that they were

bonafide purchasers inasmuch as they performed due

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diligence before buying the suit properties, by

verifying title of Defendant No.1 and 2. Also they

had verified the revenue records respecting the suit

properties, which at the material time was showing

the names of Defendant No.1 and 2, as its owners.

Further they asserted their possession in the suit

plots sold to them by the Defendant No.1 and 2. On

these grounds, they resisted the temporary relief

sought by the Plaintiffs.

6. The learned trial Court vide order dated 11th

February, 2021 restrained the Defendants from

creating the third party right in the suit property.

That order is under challenge.

7. Heard. Mr. Anil Anturkar, learned Counsel for

the Appellants and Mr. R.D. Soni, learned Counsel

for the Respondents.

8. Mr. Anturkar, learned Senior Counsel for the

Appellants, contended that upon execution of the

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sale deed, dated 26th February, 2020 by the

Plaintiffs in favour of the Appellants-Defendants

No.1 and 2, sale was complete and title in the suit

properties had passed on to the Defendants. Relying

on the judgment of the Apex Court in the case of

Vidyadhar 1999 3 SCC 573, Mr. Anturkar, submitted

that actual payment of whole of the price at the

time of execution of the sale deed is not sine-qua-

non for completion of the sale and therefore non-

payment of part of sale price, would not affect

validity of the same. To put it differently, once

title in the property has already passed, even if

the balance sale consideration is not paid, the sale

could not be invalidated. Mr. Anturkar, learned

Senior Counsel relying on the judgment in the case

of Dahiben 2020 (7) SCC 366, contended that even if

the averments of the Plaintiffs are taken to be

proved, that entire sale consideration had not

infact being paid, it could not be a ground for

cancellation of the sale deed and the Plaintiffs may

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take recourse to other remedies in law for recovery

of the balance consideration. Mr. Anturkar,

submitted in this case assuming, but without

admitting, out of total consideration of Rs. 4

Crores, balance amount payable was Rs.

3,20,25,829/-, even then, in view of the averments

in Paragraph No. 13 of the plaint, for unpaid part

purchased price and interest accrued thereon, the

Plaintiffs were entitled to recover the said amount,

as the suit properties were agreed to be charged and

having been charged Under Section 100 of Transfer of

Property Act. Submission is that herein,

Plaintiffs' remedy in law is to recover the balance

consideration, but not to seek relief of

cancellation of the registered sale deeds. In the

next place, Mr. Anturkar submitted that the

statement of facts contained in Clause No. 10, 11,

12 and 13 of the sale deed, if taken together,

intention of the parties to pass the ownership and

title in the suit property to the Appellant-

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Defendant No.1 and 2, was clearly discernible. For

that reason, Mr. Anturkar submitted that in this

case, ownership and title in the suit property was

transferred to the Appellants No. 1 and 2 and

further Defendant No.1 and 2 sold the properties for

consideration to Defendatn No.3 to 41. Therefore

the learned Judge could have not restrained the

Defendants from creating further third party right.

Mr. Anturkar, further argued that, there was

reliable evidence on record suggesting that before

executing the sale deed by Plaintiffs in favour of

Defendant No.1 and 2, on 2nd January, 2020, Defendant

No.1 and 2 had paid Rs. 2,14,96 199/- in cash to the

Plaintiffs and this transaction was captured in the

CCTV. Mr. Anturkar submitted, the pendrive

containing the footage has been taken on record by

the learned trial Court vide order dated 11th

February, 2021. Submission is that although the

said pendrive has been taken on record, the learned

trial Court declined to rely on the data/stored in

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the device-pendrive, for want of certificate under

Section 65-B of the Evidence Act. Mr. Anturkar

submitted that the requirement of the certificate

under Section 65-B of the Evidence Act, is not a

mandatory at the time of production of electronic

record and therefore, learned Judge could not have

disregarded data (electronic evidence) stored in the

pendrive, while passing the impugned order.

Therefore, according to Mr. Anturkar, the learned

trial Court has committed an error by restraining

the Defendant No. 1 and the subsequent purchasers

being Defendant No. 3 to 41 from creating the third

party right in the suit property.

9. Mr. Soni learned Counsel appearing for the

Respondents countered the arguments of the

Appellants and submitted, that to ascertain whether

ownership or title to the property has passed to

purchaser, the true test of passing of property is

the intention of parties. Mr. Soni would rely on

the judgment of the Apex Court in the case of

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Kaliperumal AIR 2009 SCC 2122, wherein the Apex

Court has held that normally ownership and title to

the property will pass to the purchaser on

registration of the sale deed, with effect from date

of execution of the sale deed. But this is not an

invariable rule, as the true test of passing of

property is the intention of parties. Though

registration is prima facie proof of an intention to

transfer the property, it is not proof of operative

transfer, if payment of consideration is a condition

precedent for passing of the property. The answer

to the question, whether the parties intended that

transfer of ownership should be mearly, by execution

and registration of the deed or whether they

intended the transfer of the property to take place,

only after receipt of entire consideration, would

depend on the intention of the parties. Such

intention is primarily to be gathered and determined

from recitals of the sale deed.

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10. Therefore, question that falls for consideration

is, whether in this case, Plaintiffs intended the

transfer of the suit properties to take place to

Defendant No.1 and 2 upon execution and registration

of the sale deed dated 26th February, 2020, or

whether they intended the transfer of the property

to take place, only after receipt of entire

consideration ?

11. Execution of sale deed dated 26th February, 2020

respecting the suit properties in favour of

Defendant No. 1 and 2, for lumsum consideration of

Rs. 4 Crores and its registration with the Sub-

Registrar, Haveli-6, Pune are not disputed facts.

Towards consideration of the sale, the Defendant

No.1 and 2 paid part of agreed amount by RTGS and

issued postdated cheques. Clause No.10 of the sale

deed provided, that in the event of dishonor of any

of the cheques, for any reason whatsoever, the

Defendant No.1 and 2 would be liable to pay interest

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@ 2% per month on the outstanding amount of purchase

price. The said clause also provided, that if

Defendant No.1 and 2 further failed to pay the

amount with interest within a period of three

months, the instrument of sale shall automatically

be rendered invalid and terminated.

(emphasis supplied).

Clause No.11 of the sale deed, lays down that there

would be a charge on the said properties of such

unpaid purchase price. Clause No.13 provided, in

the event of dishonor of any postdated cheques, the

vendors cannot take recourse to remedy other than

cancellation of the sale deed. According to the

Plaintiffs, out of total consideration of Rs. 4

Crores, they have received only an amount of Rs.

79,74,171/- leaving balance of Rs. 3,20,25,289/-.

Primary evaluation of these recitals and in

particular clause 10 and 13 imply, that the parties

intended the transfer of suit property to take

place, only after receipt of entire consideration.

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Meaning thereby, merely by execution and

registration of the sale deed, parties did not

intend to transfer ownership and title to the

property to the Appellant No.1 and 2. The judgment

cited by Mr. Anturkar, also underlines, the same

principle, that in order to constitute a sale, the

parties must intend to transfer the ownership of the

property and the intention is to be gathered from

the recitals of the sale deed, the conduct of the

parties and evidence on record. Insofar as conduct

of the parties is concerned, Mr. Anturkar, learned

Senior Counsel for the Appellants vehemently

submitted that before execution of the sale deed on

2nd January, 2020, the Appellants paid Rs.

2,14,96,199/- in cash to the Plaintiffs, as a part

of consideration and the said amount matches with

the amount of postdated cheques. Precisely for this

reason, though the postdated cheques were

dishonored, the Plaintiffs did not initiate action

against the Defendant No.1 and 2. Mr. Anturkar

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submitted, that had the Defendant No.1 and 2 not

paid the cash the Plaintiffs, would not have

conceded the request of the Defendants, for not

depositing nine postdated cheques. According to Mr.

Anturkar, a prudent person would put all possible

efforts to recover the dues either by prosecuting

the drawer once cheques were dishonoured. However,

Plaintiffs having not done so it must be held that

Plaintiffs had received cash. It is therefore the

contention of the Appellants, that in spite of

receiving the part consideration in cash, the

Plaintiffs instituted the suit to recover the amount

in excess of agreed consideration. Therefore the

Appellants the conduct of the Plaintiffs dis-

entitles, to claim the equitable relief of

injunction, as sought by them.

12. Mr. Soni, learned Counsel for the Respondent

submitted, assuming but without admitting that the

Defendants had paid cash to the Plaintiffs on 2nd

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January, 2020. Yet, there is no evidence to signify

as to how much amount was paid?; Whether Rs.

2,14,96,199/- less or more. Moreover, even if it is

assumed that Defendants had paid Rs. 2,14,96,199/-,

it cannot be assumed the alleged payment was towards

the agreed consideration, under the sale deed. Mr.

Soni has rightly submitted that the all postdated

cheques were bearing the date 25th March, 2020 and

25th April, 2020. It means cheques were issued after

alleged payment of cash made on 2nd January, 2020.

Submission is, had Defendants paid cash in January,

2020, there was no occasion for issuing the

postdated cheques of March and April, 2020. I have

no reason to disagree with Mr. Soni.

13. Having regard to the facts of the case and

particularly the statement of facts contained in the

recitals of the sale deed prima facie in my view,

the parties never intended to transfer the title in

the suit properties to the purchasers and therefore

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the payment of entire consideration was a condition

precedent for transfer of proprietary rights in the

suit properties. This fact is clearly disernible

from the recitals in Clause No. 10 and 13 of the

sale deed.

14. Insofar as the CCTV footage captured and data

stored device in pendrive is concerned; the judgment

in the case of Avadud Kushe in Criminal Writ

Petition 54/2016 relied on by Mr. Anturkar, does not

further his case, reason being the issue in the said

judgment was, at what stage the certificate under

Section 65B of the Evidence Act is to be produced.

Admittedly, the device (pendrive) stores the

electronic evidence, of secondary in nature and

therefore unless the certificate under Section 64B

is produced, the Court could not have considered

such electronic evidence. The reliance placed by

the Appellants on the judgment of the Apex Court in

the case of Arjun Khotkar 2020 7 SCC is equally

irrelevant because the pendrive, in which the CCTV

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data of alleged transaction is stored is not a

primary but a secondary evidence. Thus, keeping in

mind facts of the case, it is to be held that the

execution of sale deed dated 26th February, 2020 and

its registration has not transferred title in the

suit properties to the Defendant No.1 and 2. As a

consequences, Defendant No. 1 and 2 could not have

transferred the title to Defendant No.3 to 41. For

all that reasons, impugned order does not call for

any interference. As a result, the appeal is

dismissed, including Interim Application therein.

(SANDEEP K. SHINDE, J.)

Digitally signed by MOHAMMAD MOHAMMAD NAJEEB NAJEEB MOHAMMAD MOHAMMAD QAYYUM QAYYUM Date:

2022.04.07 14:54:44 +0530

Na j ee b....