In RSA-718-1998 (O&M)-PUNJ HC- Transfer of immovable property by way of sale can only be by deed of conveyance/sale deed: P&H HC Justice Alka Sarin [10-05-2022]

Read Order: Sudesh Kumari and Another v. Narain Dass (deceased through LRs) & Another  

Monika Rahar

Chandigarh, May 11, 2022: The Bench of the High Court of  Punjab and Haryana has recently held that a transfer of immovable property by way of sale can only be by a deed of conveyance/sale deed and without a stamped and registered deed of conveyance/sale deed, no right, title or interest in an immovable property can be transferred. 

In this case, the suit property was a double-storeyed Shop. The case of the plaintiff-respondents was based upon the premise that the parties to the suit constituted a partnership firm, all the four partners owned a share in the suit property which was put in the common stock of the partnership firm and the business was carried on from the address of the suit property, upon dissolution of the partnership firm, the defendant-appellants gave up their shares in the suit property in favour of the plaintiff-respondents who compensated them in the form of cash (bank drafts) and, therefore, the plaintiff-respondents alone were now owners of the suit property. 

And, since the defendants failed to get the suit property recorded in the names of the plaintiffs in the municipal records, the present suit was filed. 

The defendants stated in their written statement that all the parties jointly owned the suit property; the partnership was not dissolved and the deed of dissolution did not bear the signatures of all the partners. It was denied that any money was paid to the defendants and that the plaintiffs become owners of the suit property. 

The Trial Court, while decreeing the suit, held that the plaintiffs were owners in possession of the suit property. Aggrieved, an appeal was preferred by the defendants which was partly accepted by judgment and decree. The lower Appellate Court declared the plaintiffs in possession of the suit property as tacit owners and also passed a decree for mandatory injunction directing the defendants to execute and register sale deeds within two months qua their shares in the suit property in favour of the plaintiffs on payment of stamp duty and registration charges. 

Hence, the present regular second appeal by the defendants (appellants). 

The Counsel for the appellants claimed that there was nothing on the record to prove that the defendant-appellants put their shares in the suit property in the partnership business and, therefore, they remained owners thereof even after the alleged dissolution. It was further contended that neither was the partnership of all the four parties to the suit in any business proved nor its dissolution. 

Also, it was the counsel’s case that the lower Appellate Court exceeded its jurisdiction by passing a decree for mandatory injunction directing the defendant-appellants to execute and register sale deeds within two months qua their shares in the suit property in favour of the plaintiff-respondents on payment of stamp duty and registration charges. This relief granted was beyond the pleadings of the plaintiff-respondents and could not be sustained. 

On the other hand, the counsel for the plaintiff-respondents argued that the defendants having accepted bank drafts from the plaintiffs towards the transfer of their shares in the suit property in favour of the plaintiffs, were estopped from denying the ownership of the plaintiff. 

After considering the rival submissions, the Court opined that the record of the case did not reveal any partnership ever in existence with all the four parties being partners and that there is no partnership deed or dissolution deed on the record signed by all the four partners.

The Bench of Justice Alka Sarin noted that the only partnership deed on the record was of 1985 signed by the second defendant and the second plaintiff, whereas the first appellant and the first respondent, were neither named as partners nor was the deed signed by them. Similar facts existed qua the dissolution deed, therefore, the Court observed that in the absence of any concrete proof about the existence of a partnership firm having all the four parties as partners, the Court was unable to accept that the suit property was put in the common stock the partnership itself having failed to be proved. 

Further, the Court was of the considered view that the two documents put into service by the plaintiff-respondents to show that the defendants accepted bank drafts from the plaintiffs towards the transfer of their shares in the suit property in favour of the plaintiffs could not lend any support to the arguments advanced by the counsel for the plaintiffs. 

The first document (Pratigya Patra) mentioned that the first defendant transferred and sold her 1/4 share in the suit property in favour of the first plaintiff for 25,000/- and received a bank draft. The possession was given to the first plaintiff. Similarly, the second document mentioned that the second defendant transferred and sold his 1/4 share in the suit property in favour of the second plaintiff for 20,000/- and received a bank draft and also gave possession to the second plaintiff. 

Regarding these documents, the Court observed that both were executed on non-judicial stamp papers of 5/- each and were not registered and also did not bear the signatures of either of the vendees (plaintiff-respondents).

Against this backdrop, the Court observed that a transfer of immovable property by way of sale can only be by a deed of conveyance/sale deed and without a stamped and registered deed of conveyance/sale deed, no right, title or interest in an immovable property can be transferred. 

Additionally, Justice Sarin asserted that under the provisions of Section 17 of the Registration Act, 1908 where an immovable property of the value of more than 100/- is conveyed, such sale could only be effected by a document of sale duly registered and that a bar on the admissibility of an unregistered document is imposed by Section 49 of the said Act which deals with the documents that are required to be registered under Section 17.

Since the ‘Pratigya Patras’ have the effect of creating and taking away the rights in respect of the suit property, the Court held that they required registration under Section 17 of the Registration Act, 1908. Because they were not registered, the Court opined that they could not be taken into account to the extent of the transfer of the suit property. 

Thus, the Court concluded that there was, therefore, nothing on the record to establish that a partnership firm with four partners (the plaintiff-respondents and the defendant-appellants) was ever in existence or that it was dissolved in 1988. 

Further, the Court held that the lower Appellate Court clearly erred in passing a decree for mandatory injunction directing the defendant-appellants to execute and register sale deeds within two months qua their shares in the suit property in favour of the plaintiff-respondents on payment of stamp duty and registration charges. 

“This relief was not even prayed for by the plaintiff-respondents and could, therefore, not be granted especially when the very existence of a partnership firm was not conclusively proved”, held the Court. In view of the discussion above, the present regular second appeal was allowed.