1988 PLP 1608 (CLC)

‑‑S. 54‑‑Civil Procedure Code (V of 1908), 5.100‑‑Sale and agreement to sell‑‑Distinction‑‑In sale, title in property is absolutely passed on to the vendee while agreement to sell does not in itself create interest in favour of promisee‑‑Such agreement, by its very nature, required further auction in shape of documentation to complete the sale and for that very reason registration of agreement to sell was not made compulsory. Mirza Manzoor Ahmad for Appellant. Malik Naseem Mohammad for Respondent . Date of hearing: 10th May, 1988. This regular second appeal impugns the validity of the judgment and decree dated 3‑2‑1967 of the learned Additional District Judge, Multan, whereby the appellant‑plaintiff's appeal was dismissed.

2. The property in question belonged to Rab Nawaz plaintiff who sold it to the defendant‑Walayat Hussain by a registered Deed EXh.D.1, dated the 6th of July, 1958. The same day by a separate agreement Exh.P.1 Walayat Hussain defendant agreed to reconvey it to Rab Nawaz for the same consideration of Rs.3,000 within three and a half years. The defendant avoided to abide by the agreement whereby the plaintiff served him with a notice dated 6‑11‑1961 to perform the contract. He refused to do so vide his reply dated 14‑11‑1961. The plaintiff filed the present suit for specific performance of the contract on 15‑6‑1964.

3. The suit was resisted maintaining that the agreement P.1 being unregistered did not bind the defendant. The trial Court accepted this plea and dismissed the suit. The appeal also failed upholding the decision of the trial Court.

4. The view taken was that the agreement EXh.P.l albeit executed separately on the date of sale EXh.D.1 was in fact a part thereof and had the effect of limiting the title of the defendant‑vendee by some percentage and, therefore, required compulsory registration under section 17(1)(b) of the Registration Act. Various authorities were cited in support of this proposition.

5. Mirza Manzoor Ahmad for the appellant contended that the provision of section 17(2)(v) ibid was totally ignored which indeed was more in point in so far as the agreement Exh.P.1 entitled the appellant‑plaintiff to obtain another document which would when executed create, declare, assign, limit or extinguish title in the property. The contention was not without force as on a plain reading of the document Exh.P.1, it was established firstly, that it itself was not creating or extinguishing rights in the property in favour of the appellants, and secondly, that it envisaged the execution of 'another document' which when executed would create such rights. In order to attract the provisions of section 17(1)(b) of the Act the document is supposed to itself create or extinguish rights whether in present or in future, but it would have no application if the creation of such a right in future is dependent upon execution of yet another document. This is the distinction between the two provisions and was totally ignored by the Courts below. The document Exh.P.1 clearly bound the respondent to reconvey by another document the property to the plaintiff on the same consideration amount. The arrangement clearly suggested that the payment also had to be made at a future date corroborating the plea that it required completion of a fresh instrument. Further, the language of the agreement Exh.P.1 deliberately deferred creation of rights till after the expiry of three and a half years, meaning thereby that a new document would create those rights in future. There was considerable authority for this view and, of course, in point of time of later origin. Muhammad Akram and another v. Ch. Muhammad Salim P L D 1964 (W.P.) Lah. 490, Muhammad Hussain v. Haji Hassan Muhammad P L D 1979 Lah. 41 and Ch. Muhammad Saleem v. Muhammad Akram and others P L D 1971 SC 516 and Harkisandas Bhagvandas and others v. Bai Dhanu A I R 1926 Bom. 497 were the cases wherein such agreements to reconvey were held not compulsorily registrable.

6. The learned counsel for the respondent in reply cited Muhammad Akram v. Mst. Jannat Bibi P L D 1985 Lah. 637 urging that the parties' true intention had to be gathered from the contemporaneous agreements and that the Deed Exh.P.1 was in fact a clog on his title as vendee and required compulsory registration. The main discussion in the authority related to sale and mortgage with conditional sale. I don't think the case in hand at all involved any mortgage with conditional sale. Instead the two instruments were quite independent. The sale made in favour of the respondent initially did not place any embargo or limit on his title inasmuch as the Deed Exh. D .1 was free from any clog or restriction derogating from completeness of his title. The second document Exh.P.1 being separately written could not possibly create any limitation in regard to the sale already completed in favour of the respondent. The following observation in the precedent case rather goes against the respondent:‑

"There is an obvious distinction between the two types of transactions. In the first case there does not exist any relationship of borrower and creditor, between the parties and by virtue of the sale‑deed, the title in the property is absolutely passed on to the vendee and the agreement to transfer it to the vendor does not cast any limitation on his ownership rights..." It could not be shown if the sale‑deed EXh.D.I created any limitation on the ownership of the respondent and, therefore, it had completely transferred the property to him as full‑fledged owner. Nothing in law could prevent him from entering into the second transaction which for all purposes shall be deemed to be independent. It purported to bind the respondent to resell the property by executing yet another recognizance, and was nothing more than an agreement covered by section 17(2)(v) of the Registration Act. Other authorities cited by the learned counsel are Abdus Sattar Mallik v. Yunus Malik and others P L D 1961 Dacca 512 and Abdur Rahman Sarkar v . Haji Ranga Laskar and another P L D 1964 Dacca 230 but both these related to mortgages under section 58(c) of the Transfer of Property Act, 1882 and had no element of discussion in regard to the application of Registration Act to the agreements of resale.

7. Section 54, Transfer of Property Act was also in a way relevant. It deals with sale and also an agreement to sell. The distinction between the two as contemplated by it is that an agreement to sell does not in itself create interest in favour of the promisee. Perhaps this was the reason why its registration was not made compulsory. By its very nature it required further action in the shape of documentation to complete the sale which obviously was subject to all requirements in regard to the registration.

8. As a result, I am unable to agree with the findings of the learned lower appellate Court, the R.S.A. is accepted, the impugned judgment and decree are set aside and instead the appellant‑plaintiff's suit is decreed directing the respondent‑defendant to reconvey the property to the appellant‑plaintiff on receiving the same consideration amount namely Rs.3,

000. Parties are left to bear their own costs. A.A./T‑40/L Appeal accepted.