Telangana High Court
M/S. B.V.R. Projects, vs Smt. Sumana Reddy on 30 April, 2025
THE HONOURABLE SMT. JUSTICE K. SUJANA
APPEAL SUIT NO.762 OF 2013
JUDGMENT:
This appeal is filed by the appellant aggrieved by the
judgment and decree dated 22.12.2010 in O.S.No.2125 of
2006 on the file of VIII-Additional Senior Civil Judge,
Rangareddy District at L.B.Nagar.
2. The plaintiff filed O.S.No.2125 of 2006 to cancel the
cancellation of sale deed dated 21.04.2006 and to direct the
Sub-Registrar-II to remove the impugned document i.e.,
cancellation of sale deed from the register and to grant
perpetual injunction against the defendants restraining them
from interfering with the peaceful possession and enjoyment
of the suit property.
3. For the sake of convenience the parties herein after
referred to as arrayed in the above suit. The appellant herein
is the 6th defendant in the said suit.
4. The plaintiff purchased Plot No. 76 in Sy.No.45 at
Miyapur village, along with two others, through a sale deed
executed on 11.07.2005, by the 6th defendant-M/s. B.V.R.
Projects, on behalf of defendants 1 to 5. The plaintiff paid
Rs.7,50,000/- towards total sale consideration and got
registered the sale deed. However, the plaintiff alleges that the
defendants colluded with the Joint Sub-Registrar-II to
fraudulently cancel the sale deed on 21.04.2006, without
notice or intimation to the plaintiff. The plaintiff claims that
the cancellation deed was registered illegally, in violation of
the Registration Act, and that the defendants bribed the
concerned officials to achieve this. The plaintiff has filed a
report with the Lokayukta and Upa-Lokayukta against the
Joint Sub-Registrar-II and seeks to have the cancellation deed
cancelled.
5. The 6th defendant filed a written statement denying the
allegations made by the plaintiff. According to the 6th
defendant, the plaintiff and her husband promised to pay the
sale consideration of Rs. 7,50,000/- within a short time and
requested the 6th defendant to execute the sale deed. Believing
their words, the 6th defendant executed the sale deed on
11.07.2005. However, the plaintiff and her husband failed to
pay the sale consideration despite repeated demands.
Therefore, the 6th defendant, representing defendant Nos. 1 to
5, executed a cancellation deed canceling the sale deed.
6. The 6th defendant also contended that similar sale deeds
were executed in favor of two other individuals, B. Latha Naik
and Himabindu, who also failed to pay the sale consideration,
cancellation deeds were executed for those sale deeds as well.
The 6th defendant denied the allegations of bribery and
claimed that the cancellation deed was registered according to
law and in accordance with the Registration Act. In support of
his contention, learned counsel relied on the judgment of the
Full Bench in Yanala Malleshwari and Others V Ananthula
Sayamma and others 1 , wherein it was held that unilateral
cancellation of sale deed is valid. The 6th defendant claimed
that the plaintiff's failure to pay the sale consideration led to
the cancellation deed and that the suit is liable to be
dismissed.
7. The plaintiff filed a rejoinder to the written statement,
contending that the allegations made by the 6th defendant are
false. According to the plaintiff, the recitals of the sale deed
1 2006 (6) ALD 623 (FB)
indicate that she paid the sale consideration, which was
received by the 6th defendant. The plaintiff also pointed out
that the Sub-registrar-II made an endorsement indicating that
the cancellation deed is invalid. The plaintiff argued that
unilateral cancellation is not valid as per law and that she had
sufficient means to pay the sale consideration, being employed
with Ideas Cellular Ltd. The plaintiff reiterated her allegations
against the Sub-registrar and claimed that the cancellation
deed is invalid.
8. Basing on the above pleadings, the trial Court framed
three issues. On behalf of the plaintiff Pws.1 and 2 were
examined, Exs.A.1 to A.6 were marked and on behalf of the 6th
defendant Dws.1 and 2 were examined and Exs.B.1 to B.3
were marked. After hearing both sides, the trial Court decreed
the suit and aggrieved by the same, the 6th defendant
preferred this appeal.
9. Heard Sri Rajagopallavan Tayi, learned counsel for the
appellant-6th defendant and Dr.K.Lakshmi Narasimha,
learned counsel for the respondent No.1-plaintiff.
10. The contention of learned counsel for the 6th defendant
is that the impugned judgment is against the principles of
natural justice and good conscience. The judgment is also
considered perverse and palpably wrong, as it failed to
consider the nature of the claim made by the plaintiff. The
court below framed an additional issue and gave a specific
finding that the facts and circumstances create grave doubt
about the version of plaintiff, yet held that plaintiff is entitled
to have the cancellation deed canceled. The 6th defendant
argues that this finding is contradictory and flawed and the
court below erred in holding that the rule incorporated in the
year 2006 has no prospective effect and that the 6th defendant
cannot cancel the document. The court below also failed to
appreciate that the plaintiff promised to pay the sale
consideration within 10 days but failed to do so, which
amounts to cheating and fraud.
11. The further contention of learned counsel for the 6th
defendant is that the court below erred in holding that the
sale deed cannot be canceled due to non-payment of sale
consideration. The 6th defendant contends that Section 54 of
the Transfer of Property Act and the decisions relied upon by
the plaintiff are not applicable to the present case. It is
further contended that the court below failed to appreciate
that there was no bar under the Registration Act, 1908, to
execute a deed of cancellation canceling the sale deed for non-
payment of sale consideration. The 6th defendant seeks to set
aside the impugned judgment and decree, arguing that the
court below made several errors in law and fact that the
plaintiff's entitlement to have the cancellation deed canceled is
not supported by law or evidence.
12. On the other hand, learned counsel for the plaintiff
would submit that cancellation deed was executed on the
ground that sale consideration was not paid. If the sale
consideration is not paid, the recourse available is to file a
suit for recovery of sale consideration, but not execution of
cancellation of sale deed, which is nothing but violation of
Rule 26 (k) (i) of the Andhra Pradesh Rules under the
Registration Act. The said registration is illegal, null and void.
The findings of the trial Court on additional issue of IDBI Loan
is not germane and it is irrelevant to the present case. The
legal question is whether the registered sale deed can be
cancelled unilaterally, even if the loan is not approved has no
bearing on the legal invalidity of the cancellation of sale deed.
Hence, prayed to dismiss this appeal.
13. Considering the submissions made by both the counsel
and the material on record, the suit is filed by the plaintiff for
cancellation of cancellation of sale deed on the ground of non-
payment of sale consideration. The trial Court initially framed
only two issues, later additional issue was framed on sale
consideration as the plaintiff therein filed re-joinder stating
that she paid total sale consideration of Rs.7,50,000/-.
14. Basing on the above, the following points arise for
determination :
1. Whether the plaintiff in the suit is entitled for
cancellation of cancellation of sale deed ?
2. Whether the judgment of trial Court needs any
interference ?
POINT NOs.1 and 2 :
15. The suit is filed for cancellation of execution of
cancellation of sale deed on the ground that unilateral
cancellation is not valid and it is settled principle of contract
that if consideration is not paid, the recourse is to file a suit
for recovery of the said amount and without giving notice for
payment of consideration and without filing a suit for recovery
of sale consideration, the 6th defendant executed registered
cancellation deed is void. In support of her contention,
plaintiff examined Pws.1 and 2. Pw.1 evidence is that she
purchased the suit schedule property for an amount of
Rs.7,50,000/- and Pw.2 who is the husband of Pw.1 filed
chief-affidavit stating that plaintiff being an employee having
monthly income of Rs.25,000/- per month purchased the suit
schedule property by obtaining loan of Rs.10 Lakhs from IDBI
Bank, Basheerbagh Branch and paid Rs.7,50,000/- to the 6th
defendant at the time of registration of sale deed towards sale
consideration. As such, non-payment of consideration is
baseless and false.
16. On the other hand, Dw.1 who is the 6th defendant filed
chief affidavit stating that the husband of plaintiff approached
the defendants for purchase of suit schedule property and
requested to execute sale deed and that he would pay the sale
consideration after obtaining loan from IDBI, within 10 days.
The husband of plaintiff is the Regional Manager of IDBI Bank
at the time of transaction and believing his words, sale deed
was registered in favour of plaintiff, but the plaintiff and her
husband failed to keep up their assurance, as such, he
cancelled the sale deed. Dw.2 was the Branch Manager of
IDBI Bank, filed his chief affidavit stating that as per record,
plaintiff approached the Bank for grant of housing loan of
Rs.10 Lakhs, the bank sanctioned the loan but she did not
receive the loan amount. Pw.2 attested the copy of bank
record and produced before the Court to show the cancel pay
order and statement.
17. The evidence of Dw.2 would show that plaintiff
approached IDBI Bank and availed loan of Rs.10 Lakhs for
purchasing the suit schedule property. However, in the
present case, whether the plaintiff paid sale consideration or
not is not the question before this Court. The question before
this Court is whether unilateral cancellation of sale deed is
valid in the eye of law. On this aspect the contention of
learned counsel for the 6th defendant is that on the date of
execution of cancellation of sale deed, unilateral cancellation
is valid. The said amendment was made on 29.11.2006,
whereas, the cancellation of sale deed was executed on
21.04.2006. Therefore, it is valid.
18. In support of his contention, learned counsel for the 6th
defendant relied on the Full Bench judgment of A.P.High
Court in Yanala Malleshwari's case, wherein it was observed
that when there is no prohibition under the Act for the vendor
to get the cancellation deed registered, it cannot be said that
unilateral cancellation is void.
19. The Hon'ble Supreme Court in Satya Pal Anand V
State of M.P. 2, relied on the judgment in Thota Ganga Laxmi
V State of A.P. 3, wherein it was held in paragraph Nos.46 and
47 as under :
"46. In our considered view, the decision in Thota Ganga
Laxmi [Thota Ganga Laxmi v. State of A.P., (2010) 15 SCC
207 : (2013) 1 SCC (Civ) 1063] was dealing with an express
provision, as applicable to the State of Andhra Pradesh and
in particular with regard to the registration of an
extinguishment deed. In absence of such an express
provision, in other State legislations, the Registering Officer
would be governed by the provisions in the 1908 Act. Going
by the said provisions, there is nothing to indicate that the
Registering Officer is required to undertake a quasi-judicial
enquiry regarding the veracity of the factual position stated
in the document presented for registration or its legality, if
the tenor of the document suggests that it requires to be
registered. The validity of such registered document can,
2 (2016) 10 SCC 767
3 (2010) 15 SCC 207
indeed, be put in issue before a court of competent
jurisdiction.
47. In the present case, the document in question no doubt
is termed as an extinguishment deed. However, in effect, it
is manifestation of the decision of the Society to cancel the
allotment of the subject plot given to its member due to
non-fulfilment of the obligation by the member concerned.
The subject document is linked to the decision of the
Society to cancel the membership of the allottee of the plot
given to him/her by the Housing Society. In other words, it
is the decision of the Society, which the Society is entitled to
exercise within the framework of the governing cooperative
laws and the bye-laws which are binding on the members of
the Society. The case of Thota Ganga Laxmi [Thota Ganga
Laxmi v. State of A.P., (2010) 15 SCC 207 : (2013) 1 SCC
(Civ) 1063] , besides the fact that it was dealing with an
express provision contained in the statutory Rule, namely,
Rule 26(k)(i) of the Andhra Pradesh Registration Rules,
1960, was also not a case of a deed for cancellation of
allotment of plot by the Housing Society. But, of a
cancellation of the registered sale deed executed between
private parties, which was sought to be cancelled
unilaterally. Even for the latter reason the exposition
in Thota Ganga Laxmi [Thota Ganga Laxmi v. State of A.P.,
(2010) 15 SCC 207 : (2013) 1 SCC (Civ) 1063] will have no
application to the fact situation of the present case."
21. In the above judgments it was observed that registering
authority has no adjudicating power to cancel the registered
sale deed and unilateral cancellation is not permissible. In
Thota Ganga Laxmi's case also, it was observed that the deed
of cancellation of registered sale deed cannot be unilaterally
executed, the competent Court can only nullify the said
document.
22. In the present case, it is not the contention of 6th
defendant that fraud was played, but the only ground is that
no sale consideration was paid, even after registration of sale
deed. If the sale consideration is not paid, the recourse to the
party is to file a suit for recovery of sale consideration. No
notice was issued to the plaintiff for payment of sale
consideration and no suit is filed for recovery of sale
consideration. As per Section 54 of the Transfer of Property
Act, even if consideration is not paid, sale is valid as future
consideration is also valid. Therefore, the 6th defendant has to
file a suit for recovery of the said amount. In Thota Ganga
laxmi's case and in Satya Pal Anand's case, it is reiterated
that the sub-registrar has no adjudicatory power to cancel the
sale deed on the ground of non-payment of sale consideration,
even if it is not paid, he has to file a suit for cancellation of
registered sale deed on the ground of non-payment of sale
consideration. Therefore, unilateral cancellation is void and
not valid.
23. The trial Court has also discussed at length about the
unilateral cancellation. Though an additional issue is framed
for deciding the point whether consideration is paid by the
plaintiff, as the suit is filed on the ground that unilateral
cancellation is void, whether consideration is paid or not is
not the question before the trial Court. If really sale
consideration is not paid, the 6th defendant has to file a suit,
and then the Court can decide accordingly. Hence, the trial
Court has rightly decided that unilateral cancellation is not
valid cancellation and it is void. Therefore, I find no illegalities
in the judgment of the trial court and there are no grounds for
this Court to interfere with the impugned judgment. There
are no merits and the appeal is liable to be dismissed.
However, the appellant is at liberty to file suit for cancellation
of sale deed.
24. Accordingly, the Appeal Suit is dismissed. No costs.
Miscellaneous petitions, pending, if any, shall stand
closed.
_______________
K. SUJANA, J
Date : 30.04.2025
Rds
