Registered Sale Deed Operates From Date Of Execution When Entire Consideration Is Paid; Unilateral Changes After Execution Invalid : Supreme Court

The present case arises out of the decision given by the High Court in the second appeal in a suit filed by the Respondents for declaration of ownership over a land measuring 71 kanals and 8 marlas (suit property) which their predecessor ( original plaintiff) allegedly bought through a sale deed from the predecessor of the appellants.

After the execution of the sale deed on July 23, 1975, the predecessor of the appellants (first defendant) executed a gift deed in favour of his wife, gifting her 2/3rd share in the same suit property. The main contention by the plaintiff was that interpolation was made in the sale deed by the first defendant before the registration of the said sale deed wherein it was added that only 1/3rd of the share measuring 23 kanals and 8 marlas was being sold.

The Trial court decreed the suit in favour of the respondents, holding that the complete area of land measuring 71 kanals 8 marlas was sold. The first appeal preferred by the appellants was allowed on the ground that the correction made in the deed was bona fide and not done fraudulently. The second appellate court however set aside the previous order and restored the decree of the Trial Court.

It was submitted by counsel appearing for the appellants that the sale was deemed effective from the date of registration of the sale deed, rather than from its execution. It was argued that the content conveyed in the registered sale deed holds precedence. Additionally, emphasis was placed on the agreement for sale executed prior to the sale deed, which specifically referenced the sale of a 1/3rd share of the first defendant, not the entire property. The submission highlighted that the inclusion of the original plaintiff's name in the revenue records as the owner of the entire area did not confer any title, as the crucial aspect was the property description within the registered sale deed. The respondents were not represented.

Understanding Section 47 of the Registration Act, 1908:

The bench observed that the impugned High Court Order placed reliance on S.47 of the Registration Act to address the issue at hand. On a simple analysis, the bench observed that the provision stipulated that a registered document shall be effective from the time it would have commenced operating if registration were not mandatory. Consequently, when a document subject to compulsory registration is registered in accordance with the Registration Act, it can take effect from a date preceding its registration date. The commencement date of its operation is contingent upon the nature of the transaction.

The Court further held, “If, in a given case, a sale deed is executed and the entire agreed consideration is paid on or before execution of the sale deed, after it is registered, it will operate from the date of its execution. The reason is that if its registration was not required, it would have operated from the date of its execution.”

Explaining the decision in Ram Saran Lall v. Domini Kuer :

The appellants relied upon the constitution bench judgement in Ram Saran Lall v. Domini Kuer AIR 1961 SC 1747 to submit that the sale would be completed when the deed was registered and thus the description of the property recorded in the deed will prevail.

Explaining the decision in Ram Saran Lall, the bench observed that the matter concerning the completion of a sale is not addressed by Section 47 of the Registration Act. The Constitution Bench clarified that Section 47 solely pertains to a document's application after its registration and is unrelated to the finalization of a sale if the instrument is a sale deed. It was further established that upon registration of a document, it will be effective from an earlier date, as outlined in Section 47 of the Registration Act.

Furthermore, relying upon the plain reading of S.54 of the Transfer of Property Act, 1984, the bench held, “Every sale deed in respect of property worth more than Rs. 100/- is compulsorily registerable under Section 54 of the Transfer of Property Act. Thus, a sale deed executed by the vendor becomes an instrument of sale only after it is registered. The decision of the Constitution Bench only deals with the question of when the sale is complete; it does not deal with the issue of the date from which the sale deed would operate. Section 47 of the Registration Act does not deal with the completion of the sale; it only lays down the time from which a registered document would operate.”

Applying the above analysis to the facts of the case, the Court held that since the consideration amount was paid entirely on the date of the execution of the sale deed, “In terms of Section 47 of the Registration Act, a registered sale deed where entire consideration is paid would operate from the date of its execution. Thus, the sale deed as originally executed will operate. The corrections unilaterally made by the first defendant after the execution of the sale deed without the knowledge and consent of the purchaser will have to be ignored”.

The Court while upholding the decision of the High Court, dismissed the appeal with no order as to costs.

Case Title: Kanwar Raj Singh (D) Th. Lrs. v Gejo. (D) Th.Lrs & Ors. 

Citation : 2024 LiveLaw (SC) 4

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