JANAK DULARI DEVI & ANR.versusKAPILDEO RAI & ANR.

                         [2011) 6 S.C.R. 96


A                  JANAK DULARI DEVI & ANR.
                                  v.
                       KAPILDEO RAI & ANR.
                  (Civil Appeal No. 4422 of 2002)
                          APRIL 15, 2011
B
     [R.V. RAVEENDRAN AND MARKANDEY KATJU, JJ.]

       Transfer of Property Act, 1882 - ss. 8 and 54 - Sale of
  immovable property - Passing of title - Suit for specific
C performance by purchaser seeking decree for a direction to
  vendor to deliver the registration receipt in regard to sale
  deed by receiving the balance consideration - Vendor
  alleging that the purchaser did not pay any part of the
  consideration and as such he cancelled the sale deed and
o sold the property to the subsequent purchaser - Trial court
  decreed the suit in favour of the purchaser holding that the
  purchaser had proved payment of part sale price to vendor
  and on execution of sale deed by the seller, title passed to
  the purchaser - First appellate court as also the High Court
E dismissed the suit - On appeal, held: Intention of the parties
  was that title would not pass until the consideration was not
  paid - As the consideration was not paid, the sale in favour
  of the purchaser did not come into effect and the title
  remained with the vendor and the sale deed was a dead letter
F - Thus, the subsequent sale in favour of the subsequent
  purchaser was valid - Vendor retained the power of
  repudiating the sale for non-payment of the sale price within
  a reasonable time and after lawful repudiation, the purchaser
  was not entitled to claim performance.

G       Property laws - Practice of exchanging equivalents- 'ta
    khubzul badlain' - Prevalent in the State of Bihar- Explained.

     It was the appellant's case that second respondent- ·
  owner of the property executed a sale deed in respect of
H                            96
 JANAK DULARI DEVI & ANR. v. KAPILDEO RAI &            97
                   ANR.
the suit property in the appellant's favour for a A
consideration of Rs.22,000/-; that the appellants paid
Rs.17,000/- to the second respondent, at the time of
execution and registration of sale deed; and that the
second respondent retained the registration receipt of the
sale deed, agreeing to deliver it to the appellants against B
payment of the balance sale consideration.
Subsequently, the second respondent avoided receiving
the balance of Rs.5000/- and failed to deliver the
registration receipt as also denied the receipt of
Rs.17,000/-. The appellants filed a suit for specific c
performance against the second respondent. They
sought a decree for a direction to the second respondent
to deliver the registration receipt relating to the sale deed
by receiving the balance sale consideration of Rs.5000/-
. The second respondent contended that as the 0
appellants failed to pay the sale consideration, he
cancelled the said sale deed and sold the property to the
first respondent for a consideration of Rs.19,000/- and
also delivered possession of the property. Thereafter, the
first respondent was impleaded as the second defendant E
in the suit. The trial court decreed the suit holding that
the appellants had proved the payment of part sale price
of Rs.17000/- to second respondent; that on the
execution of the sale deed by the second respondent,
title passed to the appellants and the appellants were
entitled to declaration of title and recovery of possession. F
The first respondent filed an appeal. The first appellate
 court allowed the same holding that the appellants had
failed to prove payment of Rs.17,000/- and that as a result
 thereof, the second respondent was justified in
 cancelling the sale deed and selling the property to the G
 first respondent. The appellants then filed a second
 appeal and the same was dismissed. Therefore, the
 appellants flied the instant appeal.
    Dismissing the appeal, the Court                        H
    98       SUPREME COURT REPORTS             [2011) 6 S.C.R.

A      HELD: 1.1 The first appellate court after analyzing the
  evidence held that the evidence was contrary to the
  pleadings that a sum of Rs.17 ,0001· was paid to the
  defendant at the residence of the first plaintiff, that
  thereafter, they went to the Sub-Registrar's office and got
B the sale deed written by the scribe-PW5, and that
  thereafter, the second respondent executed the sale
  deed and got it registered; and therefore, liable to be
  rejected. When what Is pleaded is not proved, or what Is
  stated in the evidence is contrary to the pleadings, the
c dictum that no amount of evidence, contrary to the
  pleadings, howsoever cogent, can be relied on, would
  apply. The first appellate court also referred to the recitals
  in the sale deed and the manner of the execution of the
  sale deed and concluded that no part of the sale
  consideration had been paid. This finding of fact recorded
0
  by the first appellate court that the appellants had not
  established the payment of Rs.17000/·, after consideration
  of the entire evidence, upheld by the High Court in
  second appeal, does not call for interference, in an appeal
  under Article 136 of the Constitution in the absence of
E any valid ground for interference. [Para 7] [107-B-G]
        1.2 Where the intention of the parties is that passing
  of title would depend upon the passing of consideration,
  evidence is admissible for the purpose of contradicting
F the recital in the deed acknowledging the receipt of
  consideration. [Para 8] [107-H; 108-A-B]
       Bishundeo Narain Rai vs. Anmol Devi and Ors. 1998 (7)
  SCC 498: 1998 (1) Suppl. SCR 66; Ka/iaperumal vs.
G Rajagopa/ and Anr. 2009 (4) SCC 193: 2009 (2) SCR 814 -
  referred to.
        1.3 Where the sale deed recites that on receipt of the
    total consideration by the vendor, the property was
    conveyed and possession was delivered, the clear
H
 JANAK DULAR! DEVI & ANR. v. KAPILDEO RAI &              99
                   ANR.
intention is that title would pass and possession would        A
be delivered only on payment of the entire sale
consideration. Therefore, where the sale deed recited that
on receipt of entire consideration, the vendor was
conveying the property, but the purchaser admits that he
has not paid the entire consideration (or if the vendor        a
proves that the entire sale consideration was not paid to
him), title in the property would not pass to the purchaser.
[Para 1O] [110-C-E]

     1.4 As per the practice prevalent in Bihar known as
'ta khubzul badlaln' (that is, title to the property passing C
to the purchaser only when there is "exchange of
equivalents"), where a sale deed recites that entire sale
consideration has been paid and possession has been
delivered, but the Registration Receipt is retained by the ·
vendor and possession of the property· is also retained D
by the vendor, as the agreed consideration (eitherfull or
a part) is not received, irrespective of the recitals in the
sale deed, the title would not pass to the purchaser, till
payment of the entire consideration to the vendor and the
Registration Receipt is obtained by the purchaser in E
exchange. In such cases, on the sale deed being
executed and registered, the registration receipt (which
is issued by the Sub-Registrar) authorizing the holder
thereof to receive the registered sale deed on completion
of the registration formalities, is received and retained by F
the vendor and is not given tb the purchaser. The vendor
who holds the Registration receipt will either receive the
registered document and keep the original sale deed In
his custody or may keep the registration receipt without
exchanging it for the registered document from the sub- G
Registrar, till payment of consideration is made. When the
purchaser pays the price (that is the whole price or part
that is due) on or before the agreed date, he receives in
exchange, the registration receipt from the vendor
entitling him to receive the original registered sale deed, H
    100     SUPREME COURT REPORTS             [2011] 6 S.C.R.


A as also the possession. If the payment is not made as
  agreed, the vendor could repudiate the sale and refuse
  to deliver the registration receipt/registered document, as
  the case may be, which is in his custody, and proceed
  to deal with the property as he deems fit, by ignoring the
B rescinded sale. [Para 11) (110-F-H; 111-A·D]

       1.5 The effect of such transactions in Bihar is even
  though the duly executed and registered sale deed may
  recite that the sale consideration ·has been paid, title has
  been transferred and possession has been delivered to
C the purchaser, the actual transfer of title and delivery of
  possession is postponed from the time of execution of
  the sale deed to the time of exchange of the registration
  receipt for the consideration, that is ta khubzul badlain.
  [Para 12) (115-C-D]
D
       Bishundeo Narain Rai vs. Anmol Devi and Ors. 1998 (7)
  SCC 498: 1998 (1) Suppl. SCR 66; Sarjug Saran Singh vs.
  Ramcharitar Singh 1968 BLJR 74; Shiva Narayan Sah vs.
  Baidya Nath Prasad Tiwary AIR 1973 Patna 386; Baldeo
E Singh vs. Dwarika Singh AIR 1978 Patna 97; Md. Murtaza
  Hussain vs. Abdul Rahman AIR 1949 Pat. 364; Moti/al Sahu
  vs. Ugrah Narain Sahu AIR 1950 Patna 288; Panchoo Sahu
  v. Janki Mandar AIR 1952 Pat. 263 - referred to.

F      1.6 The first appellate court recorded a finding of fact
  that the appellants had not paid the consideration of
  Rs.22,000/- at the time of execution and registration of the
  sale deed. This finding of fact (accepted by the High Court
  In second appeal) has been recorded after exhaustive
  consideration of the oral evidence and is not open to
G challenge. The trial court, the first appellate court and the
  High Court have concurrently found that though the sale
  deed recited that possession of the property was
  delivered to the purchasers, the possession was not In
  fact delivered and continued with the vendor (second
H
 JANAK DULAR! DEVI & ANR. v. KAPILDEO RAI &            101
                   ANR.
respondent) and he had delivered the actual possession         A
of the property to the first respondent when he
subsequently, sold the property to the first respondent.
Therefore, the recitals in the sale deed, that the vendor
had received the entire price of Rs.22,000/- from the              r--
purchasers (that is Rs.17,000/- before execution of the        B
sale deed and Rs.5000/- at the time of exchange of
registration receipt) and had transferred all his rights
therein and that on such sale the vendor has not retained
any title and that the vendor has relinquished and
transferred the possession of the property to the              C
purchasers, will not be of any assistance to the
appellants to contend that the title has passed to them
or part consideration was paid. It is an admitted fact that
the registration receipt was retained by the vendor to be
exchanged later in consideration of the sale price. It is      D
also admitted that possession was not delivered though
the deed recited that possession was delivered. The sale
was categorically repudiated by the second respondent
on 18.3.1988 by cancelling the sale deed. There is no
evidence that the appellants offered the sale price of
Rs.22,000/- to the second respondent before the                E
repudiation. The only possible inference is that the
intention of the parties was that title would not pass until
the consideration was not paid; and as the consideration
was not paid, the sale in favour of the appellants did not
come into effect and the title remained with the vendor        F
and the sale deed was a dead letter. Consequently, the
subsequent sale in favour of the first respondent was
valid. [Para 13] [115-E-H; 116-A-E]
    1.7 On execution and registration of the sale deed in G
favour of appellants, title did not pass to the purchaser
and possession was not delivered. Therefore, as a
consequence the vendor retained the power of
repudiating the sale for non-payment of the sale price
within a reasonable time. As the finding is that no part of H
    102       SUPREME COURT REPORTS            (2011) 6 S.C.R.


A the sale price was paid, the claim of appellants that they
  offered to pay Rs.5000/-, even if accepted to be true would
  mean proving their readiness to pay only a part of the
  price and not the entire sale price. As the appellants have
  failed to prove that they tendered the price of Rs.22,000/
B - before repudiation and cancellation on 18.3.1988, the
  sale deed in favour of appellants did not convey any title
  to them and after lawful repudiation, they were not
  entitled to claim performance. [Para 14] [116-F-H; 117-A]

                         Case Law Reference:
c
          1998 (1) Suppl. SCR 66 Referred to.          Para 8
          2009 (2) SCR 814          Referred to.       Para 9
          1968 BLJR 74              Referred to.       Para 11
D         AIR 1973 Patna 386        Referred to.       Para 11
          AIR 1978 Patna 97         Referred to.       Para 11
          AIR 1949 Pat. 364         Referred to.       Para 11
E         AIR 1950 Patna 288        Referred to.       Para 11
          AIR 1952 Pat. 263         Referred to.       Para 11
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    4422 of 2002.
F
        From the Judgment & Order dated 3.1.2002 of the High
    Court of Judicature at Patna in Second Appeal No. 63of1998.

        K.B. Sinha, Kawaljit Kocf.~r. Kusum Chaudhary for the
    Appellants.
G
       A. Raghunath, Nikhil Goel (for K.J. John & Co.) for the
    Respondents.

          The Judgment of the Court was delivered by
  JANAK DULAR I DEVI & ANR. v. KAPILDEO RAI &                  103
                     ANR.
      R.V.RAVEENDRAN, J. 1. Plaintiffs in a suit for specific         A
  performance, aggrieved by the judgment and decree of the
  Patna High Court dated 3.1.2002 dismissing his second
  appeal against the decision of the first appellate court dated
  16.12.1997 dismissing their suit (in reversal of the judgment
  and decree of the trial court dated 27.8.1990 decreeing the suit)   e
· have filed this appeal by special leave.

      2. The case of the appellants in· brief is as under : The
second respondent was the owner of the suit property. The
second respondent executed a sale deed dated 22.2.1988
(registered on 7.3.1988) in respect of the suit property in favour    C
of the appellants, for a consideration of Rs.22000/-; that
Rs.17,000 was paid by the appellants to the second
respondent, at the time of execution and registration of sale
deed; that the balance of Rs.5000 was to be paid subsequently,
when the vendor requested for the said payment; that the              D
second respondent retained the registration receipt in regard
to the sale deed, agreeing to deliver it to the appellants against
payment of the balance sale consideration; that on execution
of the sale deed, by the second respondent, his right, title and
interest in the suit property passed to the appellants and            E
possession of the lahd sold was also delivered to them; that
subsequently the second respondent avoided receiving the
balance of Rs.5000 and failed to deliver the registration receipt;
that the appellants issued a legal notice calling upon the second
respondent to deliver the registration receipt so that they could     F
collect the original registered sale deed, but the second
respondent send a reply denying the receipt of Rs.17000 and
stating that the entire consideration was due; and that therefore,
it became necessary for the appellants to file the suit. The
appellants sought a decree for a direction to the second              G
respondent to deliver the registration receipt relating to the sale
deed dated 22.2.1988 by receiving the balance sale
consideration of Rs.5000 and that in case the second
respondent had already obtained the original sale deed from
                                                                      H
    104      SUPREME COURT REPORTS               [2011) 6 S.C.R.

A the office of the Sub-Registrar, then for a direction to deliver
  the same to the appellant. The said suit was valued at Rs.5000.

        3. _Tile second respondent filed his written statement. He
  alleged that he had agreed to sell the property as he urgently
  required the money for celebrating the marriage of his daughter;
8
  that he executed and registered the sale deed on 22.2.1988;
  that the appellant did not pay any part of the consideration and
  the allegation that he had paid Rs.17000 towards the sale price
  at the time of execution of sale deed was false; that the
C appellants had played a fraud upon him by stating in the deed
  that Rs.17000 was already paid towards the sale price and
  making him to sign the sale deed without reading the deed; that
  when he demanded the sale price, as the appellants stated that
  the sale consideration would be paid later, he retained the·· ·
  registration receipt and did not deliver possession; that it was
D the intention of parties that title in the property should pass to
  the appellants and possession should be delivered, only on
  payment of the consideration of Rs.22000 by the appellants;
  that as the appellants failed to pay the sale consideration, he
  cancelled the said sale deed dated 22.2.1988 on 18.3.1988
E and sold the property to the first respondent on 29.8.1988 for
  a consideration of Rs.19000 and also delivered possession of
   the property to the first respondent and ever since then the first
   respondent is in possession of the suit property. He contended
   that as the title and possession remained with him even after
F execution and registration of the sale deed in favour of the
   appellants, and as the sale price was not paid, he was justified
   in canceling/rescinding the sale and the appellants were not
   entitled to any relief.
       4. The subsequent purchaser (first respondent herein) was
G thereafter impleaded as the second defendant in the suit. The
  court framed appropriate issues as to whether a sale deed
  executed on 22.2.1988 was for consideration; whether
  Rs.17000 was paid by the appellants towards the sale price
H
  JANAK DU LARI DEVI &:· ANR. v. KAPILDEO RAI & 105
          ANR. [R.V. RAVEENDRAN: J.]
at the time of execution of the sale deed; whether the appellants . A
had tendered the balance of Rs.5000 to 'the second
respondent; whether the sale deed was cancelled on
18.3:1988; whether the second respondent had any right to
execute a sale deed dated 29~8.1988 in favour of the first
respondent; whether the appellants were entitled to receive the 'B
original sale deed dated-22:2.1988; whether the suit as framed
was maintainable and appellants had valid cause of action for
the suit; and whether the suit was barred by limitation. The
appellant examined seven witnesses and the defendant
examined six witnesses. Both sides marked several                  c
documents.

       5. The trial court by judgment dated 27.8:1990 decreed the
suit with costs subject to payment of court fee by the appellants,
 on Rs.22000. The trial court held that the appellants had proved
the payment of part sale price of Rs.17000 to second D
 respondent; that on the execution of the sale deed by the
second respondent, title passed to the appellants and the
appellants were entitled to ~eclaration of title and recovery of
possession. Feeling aggrieved the first respondent filed an
appeal. The first ~ppellate court, by judgment and decree E
dated 16.12.1997, allowed the appeal and dismissed .the suit.
 It held that the plaintiffs/appellants had failed to prove payment
of Rs.1700Q or of any part of the consider.ation; that as no part
of the, sale price was paid and as the. Registr(!tion. Receipt and
possession were retained by the_ second respondent, the            F
intention of parties was that title should not pass to the
appellants until payment was made; and that as a consequence
of non-payment of the price, the second respondent was
justified in cancelling the sale deed and selling the property to·
the first respondent. The second appeal filed by the appellant, G
was dismissed by the ,High Court by the impugned judgment·
dated 3.1.2002, affirming the finding of facts recorded by the.
first appellate court. The said judgment ~s challenged in this
appeal by special leave.                        ·                 ;
                         j' •
                                                                ,H
    106           SUPREME COURT REPORTS              (2011] 6 S.C.R.


A        6. On the contentions urged, the following questions arlH
    for consideration in this appeal :

          (I)      Whether the appellants had paid Ra.17000/·
                   towards sale price to second respondent?
8         (ii)     Whether title to the property passed to the
                   appellants on execution of the sale deed?

          (iii)    Whether the second respondent-vendor was
                   justified in cancelling/ repudiating the sale on the
c                  ground that the sale consideration was not paid?

          (iv)     Whether the appellants are entitled to the relief
                   claimed in the suit?
    Rt: Question m
D
        7. In the plaint, the specific plea of the plaintiffs.appellants
  in regard to payment of Rs.17000 was that it was initially
  agreed that the consideration would not be paid at the time of
  execution and registration of the sale deed, but would be paid
E later, against exchange with the Registration Receipt; that the
  appellants paid Rs.17000 to the second respondent at the time
  of registration of the sale deed; and that though the appellants
  were ready to pay the balance of Rs.5000, the second
  respondent stated that he would take the said amount when he
F needed it in exchange of the registration receipt. But the
  evidence led by the appellants was contrary to the pleadings.
  PW3 (the attesting witness to the sale deed), PW4, PW6 (first
  plaintiff) and PW7 (husband of the first plaintiff) deposed that
  a sum of Rs.17,000 was paid to the defendant at the residence
G of the first plaintiff, that thereafter they went to the Sub-
  Registrar's office at Arrah and got the sale deed written by the
  scribe - PW5, and that thereafter, the second respondent
  exec~ the sale deed and got it registered. The sale deed
  dated 22.7.1988 also recited that Rs.17000 was received by
  the vendor prior to the execution of the sale deed and the
H balance of Rs.5000 was to be paid at the time of transfer of
      JANAK DULARI DEVI & ANR. v. KAPILDEO RAI &                 107
              ANR. [R.V. RAVEENDRAN, J.}
 Registration Receipt. The first appellate court after analyzing A
 the evidence held that the evidence was contrary to the
 pleadings and therefore liable to be rejected. When what is
 pleaded is not proved, or what is stated in the evidence is
 contrary to the pleadings, the dictum that no amount of
evidence, contrary to the pleadings, howsoever cogent, can be 8
 relied on, would apply. The first appellate court also found that
there was no endorsement in the sale deed by the Sub-
 Registrar about payment of Rs.17000 In his presence, nor any
separate receipt existed to show the payment of Rs.17000
 prior to the preparation and the execution of the sale deed. The C
fitst appellate court believed the evidence of DW1 (attesting
Witness to the sale deed) and DW4 (the second respondent)
that they did not go to the residence of the first appellant on
22.2.1988, but had gone directly to the Sub-Registrar's office;
that by then the sale deed had already been got written by the
first appellant's husband; that the sale deed was not read over D
to them; that the second respondent was informed that the sale
price would be paid subsequently at the village and that sale
could be completed and possession be delivered on payment
and excl'lange of the Registration Receipt. The first appellate
court also noted that the appellants alleged that there were two E
independent witnesses present at the relevant time, namely
Dt:tarmanand Pandey and Bindeshwar Pandey, but neither of
tttem was examined. The first appellate court.also referred to
the recitals in the sale deed and the manner of the execution
Of the sale deed and concluded that no part of the sale F
consideration had been paid. This finding of fact recorded by
the first appellate court, that the appellants had not established
the payment of Rs.17000, after consideration of the entire •.
evidence, affirmed by the High Court in second appeal, does
nOt call for interference, in an appeal under Article 136 of the G
Constitution in the absence of any valid ground for interference.
8•; Questions OD and (HI>
i .               .

       8. Where the intentk>n of the parties is that passing of title
                                                                        H
    108       SUPREME COURT REPORTS                 [2011] 6 S.C.R.

A would depend upon the passing of consideration, evidence is
  admissible for the purpose of contradicting the recital in the
  deed acknowledging the receipt of consideration. In Bishundeo
  Narain Rai vs. Anmol Devi & Ots. (1998 (7) SCC 498], this
  Court had occasion to consider the question as to when the
8 ownership and title in a property will pass to the transferee,
  under a deed of conveyance. This Court observed :

          "Section 8 of the Transfer of Property Act declares that on
          a transfer of property all the interests which the transferor
          has or is having at that time, capable of passing in the
c         property and in the legal incidence thereof, pass on such
          a transfer unless a different intention is expressed or
          necessarily implied. A combined reading of Section 8 and
          Section 54 of the Transfer of Property Act suggests that
          though on execution and registration of a sale deed, the
D         ownership and all interests in the property pass to the
          transferee, yet that would be on terms and conditions
          embodied in the deed indicating the intention of the parties.
          It follows that on execution and registration of a sale deed,
          the ownership title and all interests in the property pass to
E         the purchaser unless a different intention is either
          expressed or necessarily implied which has to· be proved
          by the party asserting that title has not passed on
          registration of the sale deed. Such intention can be
          gathered by intrinsic evidence, namely, from the averments
F         in the sale deed itself or by other attending circumstances
          subject, of course, to the provisions of Section 92 of the
          Evidence Act, 1872."
         9. In Kaliaperumal vs. Rajagopal & Anr. [2009 (4) SCC
    193), this Court again considered the issue and held:
G
          "It is now well settled that payment of entire price is not a
          condition precedent for completion of the sale by passing
          of title, as Section 54 of Transfer of Property Act,· 1882
          ("the Act", for short) defines 'sale' as a transfer of
H         ownership in exchange for a price paid or promised or part ·
JANAK DULAR I DEVI. & ANR. v. KAPILDEO RAI &                 109
  ,    , ANR. '[R.V. RAVEENDRAN, J.] .
     paid and part promised. If the intention of parties was that    A
: ' title should pass on execution and registration, title would
     pass to the purchaser even if the sale price or part thereof
     is not paid. In the event of non-payment of price (or balance
  · price as the case may be)' thereafter~ the remedy of the
     vendor is only to sue for the balance price. He•cannot          B
    '.avoid the sale. He is; however, entitled to a charge upon
     the property for the unpaid part of the sale price where the
     ownership of the property has passed to the buyer before
     payment of the entire price, under Section 55(4)(b) ofthe
    ~                                                                c
    Normally, ownership and title to the property will pass to
    the purchaser on registration of the sale deed with effect
    from the date of execution of the sale deed. But this is not
    an invariable rule, as the true test of passing of property·
    is the intention of parties. Though registration is prima facie D
    proof of an intention to transfer the property, it is not proof
    of operative transfer if payment of consideration (price) is
    a condition precedent for passing of the property.
   The answer to the question whether the parties intended E
   that transfer of the ownership should be merely by
   execution and registration of the deed or whether they
   intended the transfer of the property to take place, only
   after receipt of the entire consideration, would depend on
   the intention of the parties. Such intention is primarily to F
   be gathered and determined from the recitals cf the.sale
· deed. When the recitals are insufficient or' ambiguous the
· surrounding circumstances and conduct of parties can be
   looked into for ascertaining the intention, subject to the
   limitations placed by section 92 of Evidence Act. x x x x G
   There is yet another circumstance to show that title was
 ' intended to pass only after payment of full price. Though
· the sale deed recites that the purchaser is entitled to hold,
 · possess and enjoy the.scheduled properties from the date
   of sale, neither the possession of the properties nor ~he H
1
    110        SUPREME COURT REPORTS                [2011] 6 S.C.R.


A         title deeds were delivered to the purchaser either on the
          date of sale or thereafter. It is admitt4'd that pos1e11ion
          of the suit properties purported to have been sold under
          the sale deed was never delivered to the appellant and
          continued to be with the respondents. In fact, the appeUant,
a         therefore, sought a decree for po11e1sion of the suit
          properties from the respondents with mesne profits. If really
          the intention of the parties was that the title to the
          properties should pass to the appellant on execution of the
          deed and its registration, the posses•ion of the suit
c         properties would have been delivered to the appellant.•
       1O. Where the sale deed recites that on receipt of the total
  consideration by the vendor, the property was conveyed and
  possession was delivered, the clear intention is that title would
  pass and possession would be delivered only on payment of
D the entire sale consideration. Therefore, where the sale deed
  recited that on receipt of entire consideration, the vendor was
  conveying the property, but the purchaser admits that he has
  not paid the entire consideration (or if the vendor proves that
  the entire sale consideration was not paid to him, title in the
E property would not pass to the purchaser.
        11. At this stage, we may refer to the practice prevalent in
  Bihar known as 'ta khubzul badlain' (that is, title to the property
  passing to the purchaser only when there Is "exchange of
F equivalents"). As per this practice, where a sale deed recites
  that entire sale consideration has been paid and poueulon
  has been delivered, but the Registratiqn Receipt is retained by
  the vendor and possession of the property II also retained by
  the vendor, as the agreed consideration (either full or a part)
  is not received, irrespective of the recitals in the sale deed, the
G title would not pass to the purchaser, till payment of the entire
  consideration to the vendor and the Registration Receipt it
  obtained by the purchaser in exchange. In such cases, on the
  sale deed being executed and registered, the registration
H receipt (which is issued by the Sub-Registrar) authorizing the
  JANAK DULAR! DEVI & ANR. v. KAPILDEO RAI & 111
          ANR. [R.V. RAVE;ENDRAN, J.]
 holder thereof to receive the registered sale deed on A
 completion of the registration formalities, is received and
 retained by the vendor and is not given to the purchaser. The
 vendor who holds the Registration receipt will either receive .
 the registered document and keep the original sale deed in
 his custody or may ·keep the registration receipt without e
 exchanging it for the registered document from the sub-
 Registrar, till payment of consideration is made. When the
 purchaser pays the price (that is the whole price or part that is
 due) on or before the agreed datE!, he receives in exchange,
 the registration receipt from the vendor entitling him to receive C
 the original registered sale deed, as also the possession. If
 the payment is not made as agreed, the vendor could repudiate
.the sale and refuse to deliver the registration receipt/registered
'document. as the case may be, Which is in his custody, and
 proceed to deal with the property as he deems fit, by ignoring
 the rescinded sale. The prevalence of this practice in Bihar is D
 noticed and recognized in several reported decisions - the
 decision of this Court in Bishundeo Narain Rai (supra) and
 the decisions of the Patna High Court in Sarjug Saran Singh
 vs. Ramcharitar Singh (1968 BLJR 74), Shiva Narayan Ssh.
 vs. Baidya Nath Prasad Tiwary (AIR 1973 Patna 386), Baldeo ·E
 Singh vs. Dwarika.Singh (AIR 1978 Patna 97), which explain
 the practice of ta khubzul badlain, after relying upon the
 principles laid down in the earlier decisions of that court in Md.
 Murtaza Hussain vs. Abdul Rahman (AIR 1949 Pat. 364),
 Motl/al Sahu vs. Ugrah Narain Sahu (AIR 1950 Patna 288), F
 and Panchoo Sahu v. Janki Mandar (AIR 1952 Pat. 263),
     11.1) In Bishundeo Narain Rai (supra), this Court held :
    . "It appears that in the State of Bihar a praCtice Is prevalent G
      that when whole or part of sale consideration is due or any
      other obligation is undertaken by the vendee, then on
     execution and registration of the sale deed by the vendor,
      title to the property, subject matter of sale, does not pass
     'ta Khubzu/ Badlain', that is, until there is 'exchange of
      equivalenf and in such a case registration receipt Is H
    112       SUPREME COURT REPORTS                  [2011) 6 S.C.R.


A         retained by the vendor, which on payment of consideration
          due or on fulfillment of the obligation by the vendee is
          endorsed in his favour or if the sale deed has already been
          received by the vendor then the sale deed is delivered to
          the vendee. Even so, this only shows that such agreement
B         are common in that part of the country but it is essentially
          a matter of intention of the parties which has to be gathered
          from the document itself but if the document is ambiguous
          then from the attending circumstances, subject to the
          provisions of Section 92 of the Evidence Act."
c                                                (emphasis supplied)

          (11.2) In Sarjug Saran Singh (supra) after referring to the
    recitals in a sale deed that the vendor had delivered possession
    to the vendee as absolute owner, it was observed :
D
          "It was admitted by the plaintiffs themselves that the
          aforesaid recital is incorrect, both as regards the receipt
          of the consideration money and as regards putting the
          vendee in possession of the property. The registration
E         receipt remained with the executants, namely, defendants
          1 and 2, and the plaintiffs alleged that on a subseq4ent
          date, when they offered to pay the consideration money
          and to take the registration receipt from defendants 1 and
          2 (Ta kalzul bad/ain exchange of equivalents), they, under
          the instigation of the other defendants refused to part with
F
          the receipt and sold the property to the other defendants."

  The Patna High Court in that decision, upheld the decision of
  the .first appellate court that the intention of the parties was that
  title should pass only on payment of the consideration and as
G admittedly the consideration was not paid, the plaintiffs did not
  obtain title by virtue of the sale deed, on the following
  reasoning:
          "It is well settled that the intention of the parties should be
H         ascertained on a construction of a document; and where
  JANAK Dl)LARI DEVI& ANR. v. KAPILDEO RA.I & 113
           ANR. [R.V. RAVEENDRAN, J.]   ..
      there. is any patent ambiguity _in any recital, aid may be. A
      taken from evidence of surrounding circumstances ancUhe.
      conduct of the parties. Mr. Rai for the appellants urged that
      the first sentence in the recital (quoted above) was
      complete in itself and that sentence indicated the clear
   ·· Intention of the parties that title should pass at the time of B
     ·the registration when the executants admitted execution
      before the Sub-registrar. He specially relied on the words
      "without any right of cancellation and revocation" occurring
      in that sentence. But it is well known that in construing a
      document due weight should be given to all the recitals. c
      Hence the subsequent recitals as regards payment of
      consideration at the time of exchange of equivalents and
      putting the vendee into possession should also be given
      equal weight. x x x x x The first appellate court was,
      therefore, justified in observing that, if the intention was that 0
      the title should pass at the time of registration, the vendors
      would have insisted on payment of the consideration
      money before the Sub-registrar, or immediately thereafter.
     The very fact that the registration receipt was kept intheir
     custody and not handed over to the vendee and                    E
     possession also admittedly remained with them lead to
     an inference that there was no intention to convey title
     until the payment of the consideration."

                                             (emphasis supplied)
                                                                      F
     (11.3) In Shiva Narayan Sah (supra), the Patna High
Court, following its earlier decisions, held that when the sale
deed stipulates payment of balance price during the exchange
of equivalents (balance sale consideration and registration
receipt) and mentions only "putting the buyer in possession"          G
without actually delivering possession, even if the sale deed
does not expressly postpone passing of the title till discharge
of the consideration due and even if more than three fourth of
the total price had been paid to the vendor, the title in the
property would not pass to the purchaser on execution and the         H
    114        SUPREME COURT REPORTS                 (2011] 6 S.C.R.

A registration of the sale deed, but will pass only during the
  exchange of the equivalents.
         (11.4) In Baldeo Singh (supra), the sale deed recited that
    the consideration money had been paid and nothing was due
    from the vendee to whom possession had also been delivered.
8
    But the plaintiffs admitted that neither the consideration money
    was paid by them nor possession was delivered by them at the
    time of execution and registration of the sale deed. After
    referring to the earlier decisions of that Court the High Court
    held:
c
          "On the basis of the aforesaid decision it can be said that
          it is almost settled that the question whether title passes
          on mere execution and registration of a deed or only on
          payment of consideration depends upon the intention of
0         the parties, to be gathered from the deed. It has also been
          held that though the sale deed may recite that the
          consideration has been paid, but there is nothing to
          prevent the parties from adducing evidence to show that
          the recital is untrue and that, in fact, the consideration was
E         not paid; this will not be barred by Section 92 of the
          Evidence Act. In the present case, there is no dispute so
          far as the second aspect is concemed. The sale deed in
          question recites that consideration money has been paid
          and there Is nothing due from the vendee to whom the
F         possession has also been delivered. But, the plaintiffs
          admit that neither the consideration money was paid nor
          possession delivered to them at the time of the execution
          and registration of the aforesaid deed ..... In my opinion,
          the plaintiffs did not acquire title on mere execution and
          registration of the sale deed.
G
          "In the instant case, the defendant first set has not taken
          the stand that he had repudiated the contract even before
          10-1-1963 when the deed of cancellation was executed.
          If the amount is tendered by the defaulter after such
H         repudiation, it Is of no, consequence. A vendor cannot be
  JANAK OULARI DEVI & ANR. v. KAPILDeo RAI &                  115
          ANR. [R.V. RAVEENORAN, J.)
     expected to wait indefinitely to enable the .vendee to A
     perform his parl, and he is at liberty in such 8 situation
     to sell the property to another person. In my opinion, in
     cases wtiere the tender or payment of the consideration
     money .is ·made by the vendee before the vend~r
     repudiates the contract, the \tendee will acquire a valid title iB
     over the properties ·covered by the deed in question.·
                                            (emphasis supplied)
       12. We have referred to several decisions of the Patna
High Court in detail to demonstrate the existence of the C
 established practice of exchanging equivalents (ta khubzul
 badlain). The effect of such transactions in Bihar is even the>Ugh
 the duly eie~uted and registered 15ale deed may recite that. the
 SI" conside~tion has been paid,' tiHe has been transferred and
.po..ession has been (felivered t() the. purc~a~r' the actual :.0
 transfer of title and delivery of possession is postponed from
 the time of execution of the sale.deed to the time of exchange
 of the registration receipt for the consideration, that'is     ta
 khubzul badlain.                                                ·
                                                                     1E
       '13. We may now examine the facts of ·this case 'with
  ~ference to the said principles, As noticed .above the first
  ipj)ellate court has recorded a finding' of fact that the appellants
  had not paid the consideration of Rs.22000. at the ·time of
  execution and registration of the sale d,ed. This fin~ing offact F
  (accepted by the High Court in second appeal) ha$ been
  recorded after exhaustive c0nsideration of the oral evidence
  a'1d ilS not open to challenge. The trial court.,thci first appellate
  court and the High Court have eoneurrently, found thatthough
  the sale deed recited that possession of the· property was ,.
 '$livered to the purchasers, the; poaaesalon was no( In' t•Ct . G
.delivered and contlnue<t with the vendor (teCOlld resp()n'dent)
·and he had delivered the actual i)ossession of the propertY to
Jhe first re$P<)ndent when he s1,1bsequently, sold the 'property to
  the fi~t respondent. Therefore, the recitals .In the ~le deed
  dated 22.2.1988, that the vendor had received the entire priee H
    116      SUPR.EME COURT REPORTS               [2011] 6 S.C.R.

A of Rs.22000/- from the purchasers (that is Rs.17000 before
  execution of the sale deed and Rs.5000 at the time of exchange
  of registration receipt) and had transferred all his rights therein
  and that on such sale the vendor has not retained any title and
  that the vendor has relinquished and transferred the possession
B ofthe prope:ty to the purchasers, will not be of any assistance
  to the appellants to contend that the title has passed to them
  or part consideration was paid. It is an admitted fact that the
  registration receipt was retained by the vendor to be exchanged
  later in consideration of the sale price. It is also admitted that
C possession was not delivered though the deed recited that
  possession was delivered. The sale was categorically
  repudiated by the second respondent on 18.3.1988 by
  cancelling the sale deed. There is no evidence that the
  appellants offered the sale price of Rs.22000/- to the second
  respondent before the repudiation. The only possible inference
0
  is that the intention of the parties was that title would not pass
  until the consideration was not paid; and as the consideration
  was not paid, the sale in favour of the appellants did not come
  into effect and the title remained with the vendor and the sale
  deed dated 22.2.1988 was a dead letter. Consequently, the
E subsequent sale in favour of the first respondent was valid.
    Re: question (iv)

       14. We are therefore of the view that on execution and
F registration of the sale deed dated 22.2.1988 in favour of
  appellants, title did not pass to the purchaser and possession
  was not delivered. Therefore as a consequence the vendor
  retained the power of repudiating the sale for non payment of
  the sale price within a reasonable time. As the finding is that
G no part of the sale price was paid, the claim of appellants that
  they offered to pay Rs.5000/-, even if accepted to be true would
  mean proving their readiness to pay only a part of the price and
  not the entire sale price. As the appellants have failed to prove
  that they tendered the price of Rs.22000/- before repudiation
  and cancellation on 18.3.1988, the sale deed dated 22.2.1988
H
                     i     .      <   ! .. .~
  JANAK DULARI DEVI & A~R. v. KAPILDEO RAI &                   117
          ANR. [R.V. RAVEENDRAN, J.]
in favour of appellants did not conve~ ~nytitle to them and after .'A
lawful repudiation, they were not entitled, t9 claim performance.

       15. We hasten to add that the practice of ta khubzul
badlain (of title passing on exchange of equivalent) is prevalent
only in Bihar. Normally, the recitals in a sale deed about transfer B
of title, receipt of consideration and delivery of possession will
be evidence of such acts and events; and on the execution and
registration of the sale deed, th~ sale wou!d be complete even
if the ~ale price was not paid, and. it will not be. possible to
cancel the. sale deed unilaterally. The exception to this rule is C
stated in Kaiiaperumal (supra). The practice of 'ta khubzul
badlain' in Bihar recognizes that a duly executed sale deed will
not operate as a transfer in preasenti but postpones th~ actual
t.ransfer of titl~. from the time. of execution and registration of
the deed, to the time of exchange of equivalents that is
registration receipt and the sale consideration, if the intention D
of the parties was that title would pas!; only on payment of entire
sale consideration. As. a result, until and unless the duly
executed and registered sale deed comes to the possession
of the purchaser, or until the right to receive the original sale
deed is secured by the purchaser by obtaining the registration E
re~eipt, the deed of sale merely remain~ an agreement to be
performed and will not be a completed sale. But in States
where such a practice is not prevalent, pos~ession of
Registn:~tion. Receipt b.Y the Vendori may not, in·the absence
o~ other clear evidence, lead to an inference that consideration F
has not been paid or that title has not passed to the purchaser
a~Jecited in the duly executed deed of conveyance. Where the
purchaser is from an outstation, the vendor being entrusted with
the Registration Receipt, to collect the original sale deed and
deliver it to the purchaser, is common. Be that as it may.          G
    . HJ. In vie~ of the above, ~e hold that there is no merit in
this appeal. and the appeal is dismissed.
N.J.                                            Ap·peal dismissed.
                                                                     H