P L D 1959 (W (PLP)

KAIKAUS, J.‑This is an appeal against the decree and the judgment of the District Judge, Sukkur, affirming a judgment of the Sub‑Judge, Sukkur dismissing the suit of the plaintiffs appellants for refund of Rs. 3,800 paid as earnest money in respect of a contract of sale. On 24th March 1949, Azizuddin and Zahir Ahmad plaintiffs‑appellants entered into a contract with Seth Sugnichand Dayaram Jotwani defendant‑respondent for purchase of a building in which there was an ice factory for a sum of Rs. 38,

000. The machinery in the factory had been separately purchased for a sum of Rs 70,000 and in respect of that there is no dispute between the parties. An agreement for sale of the building was executed and a sum of Rs. 3,800 was paid as earnest money by the appellants in respect of which a receipt was executed by the respondent. At the same time the possession of the building was given to the appellants who executed a lease deed for a period of 4 months agreeing to pay rent at the rate of Rs. 100 per month. The time for payment of the balance of the purchase price as mentioned in the agreement of sale was 14 days. In the agree ment it has also been provided that the respondent was to obtain the Income‑tax certificate. This certificate is required on account of the provisions of the Transfer of Property Ordinance of 1947, which provides that no document can be registered unless the person whose interest is to be transferred gets a certificate from the Income‑tax authorities to the effect that either there is no income‑tax due from him or he has made satisfactory arrangements for its payment. Till the expiry of 14 days the respondent had not obtained the certificate and on 13th April 1949, a notice was served by the appellants on the respondent calling upon him to refund the sum of Rs. 3,800 because he had failed to sell to them the building within 14 days as stipulated. To this the respondent replied that the whole sum of Rs. 38,000 had to be paid before he obtained an income‑tax clearance certificate and that he was prepared to obtain such a certificate if this money was paid. In his reply the respondent also expressed his willingness to complete the sale by obtaining the income‑tax certificate provided the balance of the consideration was paid to him within a week from the receipt of the notice. The present suit was filed on 10th November 1950, for a refund of the sum of Rs. 3,

800. It is alleged in the plaint that it was the duty of the defendant to execute a sale‑deed and have it registered within 14 days and as he had failed to do so the plaintiff's were entitled to put an end to the contract and have the amount of this money refunded. The respondent contended inter alia that in accordance with the agreement and the receipt for Rs. 3,800 which he had passed, he was only to execute a conveyance within 14 or 15 days and he was not bound to get it registered. It was not necessary, therefore, for him, to have an income‑tax clearance certificate within 14 days. The trial Court found that in accordance with the receipt executed by the respon dent he was only to execute a proper conveyance and execution did not include registration and, therefore, the plaintiff's were bound to pay the money on mere execution of the deed, with this finding the learned District Judge agreed on appeal. The' question, therefore, which falls to be determined in this second appeal is whether the plaintiffs were bound to pay the money on mere execution of the deed even though the respondent was not in a position to have the document registered within 14 days. For a decision of this question it will be proper to reproduce the contents of the agreement as well as the receipt executed by the respondent. The agreement runs :‑ "This agreement made at Sukkur this day of 24th March 1949, between Seth Sugnichand Dayaram Jotwani, aged about 52 years, Hindu, by religion resident of Rohri, District Sukkur (hereinafter called the Vendor) of the one part and Azizuddin and Zahir Ahmad sons of Haji Naseeruddin aged about 52 and 30 years, residents of originally Delhi and at present residing in Sukkur (hereinafter called the purchasers) of the other part: Witnesseth the vendor do hereby agree to sell and the vendee has agreed to purchase a plot of land with building, electric fittings therein bearing C.S. No. 2017/2 and 2049/3 measuring 450 sq. yds. and hundred one (101‑4 sq. yards) totalling 551‑4 sq. yds. (equal to 4963 sq. ft.) but actually measuring 'as 4835 sq. ft. ward B, at Shaikhshein Road, Sukkur for the lump sum of Rs. 38,000 (Thirty eight thousands) only. The vendee has paid the sum of Rs. 3,800 (three thousand eight hundred) only to the vendor as the earnest money and the receipt thereof the vendor doth hereby acknowledge by cash and the balance of the purchase price will be paid within a fortnight (fifteen days). The vendor hereby declare that the said property is his sole property and is free from all claims, burdens and liabilities and has full authorities to dispose of the same and the vendor will make full assurance to the vendee that the property is free from all burdens. That the vendor will obtain the income‑tax certificate. The sale‑deed expenses including stamps and registration charges will be borne by both the parties, half to half. That the vendor hereby agrees that will complete the same in favour of the vendee or his nominees appointed by the vendee in this behalf. In witness whereof the parties named above have set their hands at Sukkur on 24th March 1949." The receipt runs :‑ "I, Sugnichand Dayaram, aged 52 years, Hindu by caste, resident of Rohri, District Sukkur, received a sum of Rs. 3,800 (rupees three thousand and eight hundred) only, on account of earnest money for the cost of building bearing C. S. No. 2017/2 and 2049/3 Ward "B" situated at Shaikhshein Road, from Azizudin and Zahir Ahmad Sons of Haji Naseeruddin, residents of Delhi and at present residing in Sukkur, as sold to them on 24th March 1949, vide agreement stamp No. I dated 16‑11‑

43. The balance will be received within a fortnight and the proper sale‑deed will be executed at the time of full payment." The stress by the respondent is on the last sentence of the "receipt wherein it is stated that a proper sale‑deed will be executed at the time of full payment". The contention is that execution does not include registration and if the plaintiffs appellants had accepted this‑‑receipt as representing the agreement between the parties they have no right to insist that at the time when they paid the balance of the purchase price the respondent should have a sale‑deed not only executed but registered in their favour. We have little doubt after considering the agreement as well as the receipt that it was not the intention of the parties to vary the ordinary terms of an agreement of sale. The ordinary terms of such an agreement are contained in section 55 of the Transfer of Property Act. According to that section the seller is bound, inter alia, in the absence of a contract to the contrary, " on payment or tender of the amount due in respect of the price, to execute a proper conveyance of the property when the buyer tenders it to him for execution at a proper time and place." The words used here are "proper conveyance and we do not regard it open to serious argument that this means a conveyance which transfers title. Asp in the case of an ordinary contract, the passing of consideration by both the parties to a contract should be simultaneous. A vendee has to pay money only at the time when the vendor transfers title to him. That is the essence of section 55 and in a case where the mere execution of a deed does not entitle the vendee to have it registered it could not be said that the vendee would be bound by law to pay the purchase price on mere execution of the deed. Conveyance in section 55, should mean a conveyance which has not only been executed but has been registered but in any case even if there could be some argument in favour of the vendor after a deed is executed which the vendee has a right to get registered, there can be no such argument in a case where on account of some statutory provision there is a condition to be fulfilled by the transferor before a deed can be registered. Section 3 of the Transfer of Property Ordinance 1947 debars a Registrar from registering a document in the absence of a certificate by the Income‑tax authorities to the effect that income‑tax has been pain or its payment has been arranged for, as and mere execution of it does not entitle the vendee to have it registered. It will be observed that so far as the agreement of sale is concerned it simply says that within 14 days (or 15 days) the balance of the purchase price is to be paid. This would not mean that the vendee was bound to pay the purchase price even though the vendor neither executed a document nor registered it although in the agreement itself there is no such condition mentioned. The agreement clearly means that the vendee will pay the money when the vendor performs his part of the contract as he is bound to do under the law that governs such transfers. It may be mentioned here that the Transfer of Property, Act is in force in the Sind area. If there was no variation of the ordinary incidents of a contract of sale by the words of the agreement we do not think there is any variation on account of the fact that in the receipt t which the respondent executed he put in the words "and the proper sale‑deed will be executed at the time of full payment". This receipt which was executed by the respondent was not signed by the appellants but even if we overlook that matter and regard it as a bilateral document we are unable to infer from its contents an intention to make a special agreement that even though the respondent was not in a position to have a deed registered he would be entitled to payment. If that was the intention of the parties we would find a mention of it in the agreement for sale which was intended to be a repository of the terms of the agree ment between the parties. Important and exceptional terms are not to be regarded as embodied in documents by mere impli cations. They have to be expressly stated. If we accept the contention of the respondent we would be imputing to the parties a deliberate intention that even though the respondent was not in a position to have‑a sale‑deed registered the appellants would be bound to pay the whole of the purchase price. The respondent may never have got an income‑tax certificate. The income‑tax which he owes is more than a lakh. We have been told that the Income‑tax authorities do grant certificates if the transferor agrees to pay them the whole of the consideration which he receives and furnishes security to this effect but the respondent may never have furnished such security. The appellants would in that case be losing their money. The question is whether the appellants would ever agree to such a term. If it is the contention of the respondent that they did expressly agree to such a term then we would expect it to be specifically mentioned in the agreement of sale. From a simple use of the words execution of proper sale deed in the receipt which the respondent himself passed We cannot infer that there was an express agreement between the parties for absolving the respondent from an obligation which he was bound under the ordinary law to discharge. Even the word `execution' may sometimes include registration. It is to be noted that in section 55 of the Transfer of Property Act the word used in respect of a conveyance is only "execute", yet it cannot be said that mere execution without registration of the sale deed would be sufficient compliance with section 55 particularly in a case where a liability is to be discharged before the transferor can be in a position to have the sale‑deed registered. There is one other aspect of the matter and for that we will reproduce sections 3 and 4 of the Transfer of Property Ordinance 1947 :‑ "

3. No Registration Officer, Revenue Officer, Custodian or other officer appointed to deal with property shall register any document, relating to property other than agricultural land, which is required to be registered under the provisions of clauses (a), (b), (c) or (e) of subsection (1) of secti17 of the Registration Act, 1908, unless it is certified by an Inspecting Assistant Commissioner of Income‑tax, in respect of every person whose right, title or interest in the property is or will be transferred, assigned limited or extinguished under the terms of the document, either that such person is not liable to taxation under the Income‑tax Act, 1922, the excess Profits Tax Act, 1940, or the Business Profits Tax Act, 1947, or that he has either paid or made satisfactory provision for the payment of all existing or anticipated liabilities under any of the said Acts.

4. If any right, title or interest in any property whether movable or immovable, other than agricultural land, is or has been transferred, assigned, limited or extinguished after the 14th day of August 1947, an Income‑tax Officer may at any time issue a notice to all or any of the parties to the transaction requiring them to produce within one month the certificate prescribed by section 3 and if such certificate is not produced he may forward a statement to the Collector showing the existing and anticipated tax liabilities of each or any of the said parties. The Collector shall then proceed to recover the total amount shown in the statement as if it were an arrear of land revenue, and for the purpose of the recovery proceedings he may treat the said property as if it belonged to all or any of the persons named in the statement." It will be observed that this Ordinance necessitates the discharge of the liability to pay tax before a deed is registered, subject to this the Income‑tax authorities may agree to have instead of money some kind of security or undertaking. Section 4 provides that if a certificate has not been obtained then the Income‑tax Officer may recover, the amount as arrears of land revenue. These provisions of the Transfer of Property Ordinance would show that the amount of Income‑tax becomes a charge on property which is to be transferred or which is transferred. The vendor is bound to discharge all burdens on the property which R is to be transferred and therefore the vendee can demand before he accepts the property that either the amount of income‑tax is paid or a security is furnished ‑so that hence forth the amount is A not liable to be recovered from the property transferred. In this view of the matter also the vendee is not bound to pay the purchase price before a certificate from the Income‑tax authorities is obtained. We would, therefore, not accept the ground on which the lower Courts have decided against the appellants. However, this does not conclude the matter. The respondent did obtain a certificate in May, 1949 and he has filed a suit for specific per formance of the agreement of sale which is pending and has been stayed on account of this appeal. The mere fact that within 14 days the respondent had not obtained an income‑tax certificate may not entitle the appellants to put an end to the contract if the time allowed to the respondent for execution of the sale‑deed under the agreement was not 14 days only. The question still to be decided is whether there was a failure on the part of the respondent to perform the agreement of sale so as to entitle the appellants to put an end to the contract. An issue on this point had been framed by the trial Court which reads :‑ "who is guilty of the breach of the contract and with what consequence ?" This issue was not decided by the learned District Judge because his decision on the point which we have decided went against the appellants. The case, has, therefore, to be remanded to the District Judge for a decision of the issue mentioned above. He can decide this issue either on the material which is already on the record or if he so wishes he may give further opportunities to the parties to lead evidence on the question as to whether time was the essence of the contract. If he wants further evidence to be recorded he can either record it himself or remand the case or have a finding on the point from the trial Court. We may, however, point out that there is little room for any lengthy oral evidence to be led. It is to be remembered that the terms of the agreement are embodied in a document and, before any evidence is led, sections 91 and 92 have to be considered. All these matters are, however, for the decision of the learned District Judge. We accept this appeal and remand the case to him for a re‑decision in the light of what is said above. Costs of this appeal will be costs in the cause. A. H. Case remanded.