judgement:
Appeal No. 4145 of 1984.
From the Judgment and Order dated 14.2.1984 of the Punjab and Haryana High Court in Regular Second Appeal No. 1498 of 1982.
Ravi Parkash Gupta, Arvind Varma, Bahar Burqui and Gopal Subramaniam for the Appellant.
R.F. Nariman, Ms. Madhvi Gupta and Ashok K. Gupta for the Respondent.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
This plaintiff 's appeal by special leave is from the judgment and order dated 14.2.1984 of the High Court of Punjab and Haryana in Regular Second Appeal No. 1498 of 1982, modifying those of the courts below and pass ing a decree for Rs.5,000 only by way of refund of earnest money instead of decree for specific performance.
The appellant herein as plaintiff filed Civil Suit Nos.
195/196 of 1973, averring, inter alia, that she had entered into an agreement dated 16.9.
1971 with the respondent (defendant) for purchase of property No. B VII 7 (old) and B VIII 9 (new) containing 2 Kohlus of 20 H.P. electric motor etc.
for a consideration of Rs.50,000 and also had paid to the defendant an earnest money of Rs.5,000; that the proper ty was jointly owned by the defendant with her step mother in law Smt.
Lajwanti who would also join the execution of the sale deed; that if Smt.
Lajwanti failed to do so the respondent (defendant) would sell her half share of the property for half of the sale price; that the 352 defendant respondent pursuant to the agreement delivered possession of her share of the property to the plaintiff appellant, whereafter the plaintiff repaired the property spending Rs.4,200; that thereafter the partition was also effected between the defendant respondent and Smt.
Lajwanti; that the defendant thereafter illegally took possession of the property from the plaintiff appellant and refused to execute the sale deed in terms of the agreement dated 16.9.1971 on or before September 26, 1971 as stipulated; that as arbitration proceedings between defendant and her co sharer Smt.
Lajwanti was going on the defendant took back the said agreement (styled as receipt) and thereafter re fused to execute the stipulated sale deed and in response to the plaintiff 's lawyer 's notice dated 23.7.1971 the defend ant took the false plea that the agreement did not pertain to the building but only to the machinery fitted therein.
The relief prayed was a decree for specific performance of the contract, in the alternative a decree for a total sum of Rs. 16,000 including the earnest money of Rs. 5,000.
The defendant respondent contested the suit on the inter alia pleas that the agreement being not scribed on a proper stamped paper was not permissible in evidence; that it was only a paper transaction executed to pressurise her co sharer Smt.
Lajwanti; that no earnest money was paid; that in any case the document related only to the moveable property; and that pursuant to the compromise between the parties dated 9.1.1972, the agreement was destroyed.
In the trial court the plaintiff relied mainly on Ext.
PW 11/A being the entry of the transaction in the Petition Writer 's Register.
When this Exhibit was disallowed by the trial court vide its order dated 27.10.1976 as the entry was a duplicate of its original document which had not been produced in the court and therefore inadmissible, the plain tiff 's revision petition therefrom to the High Court was allowed with a direction to impound the document in accord ance with law and then proceed with the case.
The High Court in its order dated 18.7.1977 characterised Ext.
PW 11/A as the entry in the Petition Writer 's Register and observed that it contained all the details of a transaction but appeared to be neither a copy nor an extract though a prima facie duplicate of the original document.
The defendant respondent 's special leave petition therefrom was dismissed by this Court with the following observation: "The entry in the writer 's register which has been allowed to be admitted by the High Court subject to impounding and consequential processes will in our view be eligible for 353 admission as evidence.
This means that we will not interfere with the order of the High Court.
However we make it clear that the trial court which considers this entry will evalu ate it properly and not read more than what it says or treat it as equivalent to something which it does not.
Full effect will be given to the entry, no more, no less.
" In light of the aforesaid orders of the High Court as well as of this Court, the trial court having decreed the suit and the defendant respondent having been unsuccessful in appeal to the Additional District Judge, she filed a Regular Second Appeal which was allowed by the High Court by the impugned judgment and order to the extent already indicated.
Before the High Court the defendant respondent contended that if the entry PW 11/A was to be treated as original document or its counterpart the same did not bear the signa tures of one of the parties, that is, the respondent.
The signatures of the husband of the respondent would be of no avail as there was no evidence on record to show that he had the authority to execute a document on her behalf and the document signed unilaterally by one party could not be treated as an agreement between two persons.
Secondly as was admitted by the witness, the entry was more or less an extract of the original document and such an extract drawn and maintained by a deed writer according to his own light could not form basis of an agreement between the parties which could be given effect to by way of specific perform ance.
Both the contentions were sustained by the High Court holding that no contract could be inferred from the document PW 1 I/A. Accordingly the High Court set aside the decree for specific performance, allowed the appeal and passed a decree to the extent of Rs.5,000 being the earnest money to be returned by the defendant to the plaintiff.
Mr. Gopal Subramaniam, the learned counsel for the appellant assails the impugned judgment on the grounds, inter alia, that the High Court overlooked the relevant provisions of the Evidence Act as also this Court 's order relating to Ext.
PW 11/A inasmuch as all the findings of the courts below were in favour of the appellant holding on issue No. 14 that there was an oral agreement which was also admitted with its contents and the theory of destruction was found to be false; that the High Court should not have gone behind the Supreme Court 's order and should not have gone into the admissibility of Ext.
PW 1 1/A in face of this Court 's order; that the High Court has not given even a single reason as to why the decree of 'the lower courts should have been 354 set aside; and that Ext.
PW II/A was nightly admitted by the courts below in accordance with the Supreme Court 's order but the High Court going behind that order rejected it.
Counsel puts the appellant 's case on PW 11/A and also dehors that document.
Mr. R.F. Nariman, the learned counsel for the respondent submits that the High Court rightly set aside the decree because the trial court as well as the lower appellate court were concerned only with the question as to whether there was an agreement or not, but not with the question as to whether specific performance ought to be decreed or not.
Counsel submits that the High Court 's holding Ext.
PW 11/A to be inadmissible meant only its evaluation as the agree ment; and that the grounds given by the High Court on the merit of the case are correct.
Accordingly to counsel, even assuming that Ext.
PW 11/A was a copy of the agreement, it would by no means justify specific performance due to var ious patent and latent defects in it, and it did not create any fight in favour of the plaintiff.
In view of this sub mission we proceed to examine first the contract itself.
In a case of specific performance it is settled law, and indeed it cannot be doubted, that the jurisdiction to order specific performance of a contract is based on the existence of a valid and enforceable contract.
The Law of Contract is based on the ideal of freedom of contract and it provides the limiting principles within which the parties are free to make their own contracts.
Where a valid and enforceable contract has not been made, the court will not make a con tract for them.
Specific performance will not be ordered if the contract itself suffers from some defect which makes the contract invalid or unenforceable.
The discretion of the court will be there even though the contract is otherwise valid and enforceable and it can pass a decree of specific performance even before there has been any breach of the contract.
It is, therefore, necessary first to see whether there has been a valid and enforceable contract and then to see the nature and obligation arising out of it.
The con tract being the foundation of the obligation the order of specific performance is to enforce that obligation.
Mr. Subramaniam argues that there was an oral agreement.
The issue No. 1 was "whether there was a valid agreement of sale dated 16.9.1971 between the parties, if so what were its terms".
Issue No. 14 was "whether there was an agreement of sale on 12.9.1971 between the parties, if so what were its terms"? The trial court adjudicated issue No. 1 in favour of the plaintiff.
Before the First Appellate Court it was contended by the defendant that the alleged agreement to sell 355 dated 16.9.1971 was not admissible in evidence for the reason of it having not been scribed on the stamp paper of the requisite value nor could any secondary evidence be adduced by the plaintiff respondent to prove and establish the contents of the said agreement.
The defendant averred that she never intended to sell the suit property to the plaintiff nor was it intended to be purchased by the plain tiff, and that the agreement dated 16.9.1971 was a paper transaction which was brought into being for exerting pres sure on Lajwanti, the other co sharer of the property as suggested by plaintiff 's husband Master Kasturi Lal.
The plaintiff before the First Appellate Court relied on Ext.
PW 11/A, and the Court observed: "The learned counsel for the defendant appellant very fair ly/frankly submitted and conceded at the bar that the fate of this case hinges in its entirety on the all important document Ext.
PW 11/A which is claimed by the plaintiff re spondent to be an agreement to sell dated 16.9.71, the specific performance of which was sought and enforced in the suit by her." While Mr. Subramaniam asserts that the correspondence between the parties amply showed admission of the contract on the part of the defendant respondent, Mr. Nariman 's demurrer is that there was no such admission, but on the other hand statements on the part of the defendant showed that she put an end to what was claimed to be a contract.
Though predominantly a question of fact, in view of the assertions of counsel, we have ourselves looked into the correspondence on record.
The earliest letter on record is from S.K. Singhal, Advocate for the plaintiff Mayawanti to defendant Kaushalya Devi and Lajwanti stating inter alia that on 16.9.
1971 the latter agree to sell one karkhana building with two wheat grinding machines, two kohlus for expelling oil, one electric motor of 20 H.P., electric connection and other necessary goods and accessories owned by them and Kaushalya Devi executed an agreement to sell the building and machinery for Rs.50,000 and received a sum of Rs.5,000 in advance at the time of execution of the said agreement; that in case of default his client was entitled to get the sale deed executed through the intervention of the court and further that in case Lajwanti did not sign the sale deed Kaushalya Devi would execute it with regard to one half share belonging to her; that the sale deed was to be executed upto 26.9.1971.
; and that his client was ready and willing to perform her part of the contract.
KaushalVa Devi was therefore called upon to execute and register the sale deed in favour of Mayawanti to the extent of one half each 356 of the karkhana as his client had always been and still was ready and willing to perform her part of the contract.
The defendant replied to the said letter through her Advocate Hat Kishan Lal Soni by letter dated December 29, 1971 stat ing that Mayawanti agreed to buy a factory consisting of a flour mill, two kohlus, a 20 H.P. electric connection in stalled in property Unit No. B VII 7 (old), B VIII 9 (new) and she called upon the plaintiff to arrange to pay the sum of Rs.50,000 and get the sale transaction registered within 10 days failing which the sender should be at liberty to sell it to any other party at the risk of the plaintiff for compensation by way of damages suffered from the resale.
It is to be noted that there is no mention of any building in this letter.
In their letter dated 4.1.1972 from Mr. Soni to Mr. Singhal, Advocate for the plaintiff, it was stated that the agreement was to transfer two kohlus and 20 H.P. elec tric connection installed in the property Unit No. B VII 7 (01d)/B VIII 9 (new) situated on Gokal Road, Ludhiana lying on the road side nearby excluding the buildings and the 20 H.P. electric motor on receipt of full price of Rs.50,000 and that the latter 's client seemed to be labouring unneces sarily to include the building and 20 H.P. electric motor in the bargain.
In his letter dated 18.1.1972 to the plaintiff, Sham Lal Katyal, Advocate of Lajwanti intimated that Kausha lya Devi had no fight to sell the share of Lajwanti.
In his letter dated 13.7.1973 Sukhpat Rai Wadehra, Advocate for Mayawanti stated that the defendant entered into an agree ment to sell the property Unit No. B VII 7 (old) and B VIII 9 (new) with a flour mill, two kohlus, 20 H.P. facto ry connection and a wooden cabin standing on the roadside and that due to the partition with her "sister Lajwanti" a sale deed was to be executed on or before 26.9.1972 and she having failed to do so Mayawanti was entitled to specific performance of the agreement to sell and therefore she was called upon to execute the sale deed of property No. B VII 7 (old) and B VIII 9 (new.).
In his letter dated 23.7.1973 Mr. Soni wrote to Mr. Wadehra, that the agreement was without the building and the motor and that the original agreement was suspected to have been interpolated and so not produced by the plaintiff as required by the defendant.
In the letter dated August 3, 1973 from Mr. Wadehra to Mr. Soni, it was asserted that the agreement was for the building and the machinery therein and that the agreement was never cancelled orally.
In the next letter dated 6.9.1973 from Mr. Ahluwa lia, the defendant 's lawyer reiterated that the agreement dated 16.9.1971 was for karkhana only and not for the build ing and that the plaintiff could not arrange money for payment.
In this letter it was stated that the time was of essence of the contract and had Mayawanti paid any earnest money after the expiry date 26.9.1971, the defendant was 357 entitled to forfeit the same.
Thus, even though the sale deed was to be executed on 26.9.1971 the instant suit was filed long thereafter on 31.7.1973.
If the above correspondence were true, it would appear that the contract was in the alternative of either whole or half of the property and that the offer and acceptance did not correspond.
It is settled law that if a contract is to be made, the intention of the offeree to accept the offer must be expressed without leaving room for doubt as to the fact of acceptance or to the coincidence of the terms of acceptance with those of the offer.
The rule is that the acceptance must be absolute, and must correspond with the terms of the offer.
If the two minds were not ad idem in respect of the property to be sold, there cannot be said to have been a contract for specific performance.
If the par ties themselves were not ad idem as to the subject matter of the contract the court cannot order specific performance.
If the plaintiff understood the terms to have included the building but the defendant understood it to have excluded the building and the so called memorandum Ext.
PW 11/A did not mention the building, there is no contract before the court for specific performance.
While Mr. Subramaniam would argue that the land was also included, Mr. Nariman rightly points out that land was nowhere mentioned in PW 11/A.
It is true that Issue Nos. 2 and 3 were whether the defendant delivered possession of the property to the plaintiff pursu ant to the agreement and whether the possession was illegal ly taken by the defendant, and the Trial Court found no independent evidence and Kasturilal admitted that there was no document to prove the delivery of possession.
However, on basis of a suggestion to Kasturilal that it was "incorrect to suggest that any goods, i.e. gunny bags, oil, khal, was in possession having been taken out from the factory build ing at the time of repairs", the trial court concluded that delivery of possession was there.
The first appellate court also took it to be a "vital and material suggestion" and upheld the finding.
Admittedly the possession was with the defendant at the time of the suit and there was no proceed ing to recover the possession by the plaintiff.
This infer ential finding, therefore, can not have any bearing on the subject matter of the contract contrary to what was stated in Ext.
PW 11/A which was heavily relied on by the plain tiff.
Mr. Subramaniam then submits that the plaintiff was entitled to specific performance by virtue of Ext.
PW 11/A which was rightly admitted and that even if it was excluded from consideration then also on the notices, pleadings and evidence the plaintiff was entitled to a 358 decree and the High Court ought not to have gone behind the order of the Supreme Court to hold that Exhibit to be inad missible and it never adverted to the admission of the agreement of 16.9.
Before us Mr. Subramaniam argued that Ext.
PW 11/A was either a primary evidence or a second ary evidence of the original and its impounding implies its intrinsic value for the purpose of the case.
The signatures were not denied.
The trial court rightly treated it as the agreement and in the written statement, the defendant ob jected to its admissibility and not to its contents.
Mr. Nariman would like us to proceed on the basis that Ext.
PW 11/A was not disputed by the defendant.
PW 11/A is Sl.
No. 871 dated 16.9.1971 in the columns of the register of Atma Ram Gupta, petition writer, Ludhiana for the year 1971 and contains the following par ticulars: It is styled as "receipt" for Rs.5,000 in column 4, and in column 3 the name and address of the writer is given as Smt.
Koshalya Devi W/o Dharam Dev, Ludhiana, Gokal Road, Mohalla Kothi Megh Singh.
It bore 10 n.p. stamp.
In writer 's signatures column No. 8 it contains writer 's signature in English and the R.T.I. of Kaushalya Devi and the signature in English of Kasturi Lal.
It contains the signatures of its writer Atma Ram Gupta, petition writer, Ludhiana dated 21.11.1971.
Under the column particulars of writing and address for the witnesses, it contains the following: "Smt.
Mayawanti W/o Master Kasturi Lal, Ludhiana owns and has a factory, flour mill, Two 'kohlus ' for expelling oil.
I and Smt.
Lajwanti widow of Baru Ram, Ludhiana have an elec tric motor of 20 H.P. connection in working condition at Gokal Road.
To the East Amar Singh, to the West Mansa Ram, Ramji Das, to the north there is a road, to the South there is a Gali.
All these are settled to be sold for Rs.50,000 and Rs.5,000 is taken as advance.
The balance will be taken at the time of registration.
The registration will be done at the expense of the buyer.
It will be in the name of the buyer or in any other name he indicates by 26.9.
If any other person has a right or encumbrance on it, the advance and compensation will be paid back.
If Lajwanti does not sign these sale deeds, then I will execute the sale deed of my one of the two shares, otherwise pay pack the advance and compensation in the same amount.
The buyer may take the advance.
359 WITNESSES: Dharam Dev, husband of one who gives the receipt, R/o Ludhiana, Kothi Megh Singh, Gokal Road.
Tarsem Kumar Gupta, Stamp Vendor, Khanna Zila, Distt.
Ludhiana, Mohalla Hakim Rehamatullah, Kucha Kaka Ram House No. 27 13 (9).
" Admittedly witnesses were examined and cross examined on this Exhibit and the appellant argued before us on its basis.
The defects pointed out by Mr. Nariman are that it refers to Smt.
Mayawanti W/o Master Kasturi Lal as the owner of the factory, flour mill and two kohlus for expelling oil.
Mayawanti, the plaintiff appellant, was the intending pur chaser and not owner of the property.
The owner and vendor was the defendant/respondent Kaushalya Devi.
It nowhere mentions the land and the building; and it gives the proper ty number only.
Of course the boundaries of the factory, flour mill are given.
Mr. Subramaniam submits that land was implied in the description.
Mr. Nariman would not agree.
It says: "if Lajwanti does not sign this sale deed, then I will execute the sale deed of my one of the two shares, otherwise pay back the advance and compensation in the same amounts.
The buyer may take the advance.
" What is the legal effect of this statement on the agreement? Even assuming that recita tion of Mayawanti as the owner was a mistake and the factory also implied the land whereupon it stood, the question is whether it amounts to an alternative promise.
In Halsbury 's Laws of England 4th Edn.
Vol. 9, Para 446 on alternative promises we read: "When a promise is made in an alternative form and one alternative is impossible to perform, the question whether the promisor is bound to perform the other or is altogether excused depends on the intention of the parties to be ascer tained from the nature and terms of the contract and the circumstances of the particular case.
The usual result in such a case will be that the promisor must perform the alternative which remains possible; but it may be that on the proper construction of the contract there is not one obligation to be performed in alternative ways but one obligation to be performed in one way unless the promisor chooses to substitute another way, in which case, the pri mary obligation being impeded, the promisor is not bound to exercise the option for the benefit of the other party." Applying the principle to the instant case, on proper con struc 360 tion of Ext.
PW 11/A can it be construed that there was not one obligation to be performed in alternative ways but one obligation to be performed in one way unless the promisor choose to substitute another way? In other words, the pri mary obligation being impossible was the promisor bound to exercise the option for the benefit of the other party? It would be reasonable to construe that if Lajwanti failed to sign the sale deed then the promisor would either execute the sale deed in respect of her share, or in the alterna tive, pay back the advance and compensation in the same amount, and the buyer would have to take the advance.
Laj wanti having refused to sell her share, the first alterna tive became impossible.
The question then was whether the second alternative would automatically follow or option was reserved by the vendor either to sell her own share or to pay back the advance and the compensation in the same amount.
The first alternative failing, if the promisor decided in favour of the other alternative, it could not be said that there was any breach of any obligation under the agreement, and if that was so, there could arise no question of specific performance of the contract.
Looking at PW 1 i/A from another angle the payment was an alternative to performance.
In paragraph 4 17 of volume 44 of Halsbury 's Laws of England dealing with payment as an alternative to performance we find: "There are cases where the court holds, on the construction of the contract, that the intention of the parties is that the act may be done by the contracting party or that payment may be made by him of the stipulated amount, so that the contracting party has in effect the option either of doing the act which he has contracted to do or paying the speci fied sum, the contract being alternative, either to do or abstain from doing on payment of the sum in money.
The court may treat covenants to perform or to pay as alternative where specific performance would work unreasonable results.
" The expression 'otherwise pay back the advance and compensa tion in the same amount ' is capable of being interpreted as payment of the amount as alternative to performance.
Of course the amount advanced and the compensation was stipu lated to be the same amount.
That however, would not affect the real character of the promise.
We may also refer to another element of uncertainty or ambi 361 guity in the contract in the event that has happened viz. Lajwanti 's refusal to part with her share in the property.
exhibit PW 1 1/A says that, in that event, Kaushalya Devi should execute the sale deed of "my one of the two shares".
The share is undefined and the consideration for the sale price for the half share is also unspecified.
This is of impor tance because portions of the property are not equally valuable due to the situation of the kohlus, flour mill etc.
on a part thereof.
It is true that, eventually there was a partition between Kaushalya Devi and Lajwanti and the vendee may have had no difficulty in working out the portion that should come to her towards the half share agreed to be sold by Kaushalya Devi.
But the question is whether words could be read into Ext.
PW 11/A to spell out an agreement, on the date of that exhibit, that, in case Lajwanti backed out, Kaushalya Devi would sell her half share to the appellant for one half of the total consideration.
It seems difficult to say that the answer should necessarily be in the affirma tive.
There are too many is to be dotted and it 's to be crossed before a clear and unambiguous contract, on the terms sought to be enforced, could be spelt out of the language of Ext.
PW 1 1/A.
The specific performance of a contract is the actual execution of the contract according to its stipulations and terms, and the courts direct the party in default to do the very thing which he contracted to do.
The stipulations and terms of the contract have, therefore, to be certain and the parties must have been consensus ad idem.
The burden of showing the stipulations and terms of the contract and that the minds were ad idem is, of course, on the plaintiff.
If the stipulations and terms are uncertain, and the parties are not ad idem, there can be no specific performance, for there was no contract at all.
Where there are negotiations, the court has to determine at what point, if at all, the parties have reached agreement.
Negotiations thereafter would also be material if the agreement is rescinded.
The jurisdiction of the court in specific performance is discretionary.
Fry in his Specific Performance, 6th Edn.
P. 19, said: "There is an observation often made with regard to the jurisdiction in specific performance which remains to be noticed.
It is said to be in the discretion of the Court.
The meaning of this proposition is not that the Court may arbitrarily or capriciously perform one contract and refuse to perform another, but that the Court has regard to the conduct of the plaintiff and to circumstances outside the contract itself, and that the mere fact of the existence of a 362 valid contract is not conclusive in the plaintiff 's favour. 'If the defendant ', said Plumer V.C., can show any circum stances dehors, independent of the writing, making it ineq uitable to interpose for the purpose of a specific perform ance, a Court of Equity, having satisfactory information upon that subject, will not interpose.
" The author goes on to say that of 'the circumstances calling for the exercise of this discretion, "the Court judges by settled and fixed rules; hence the discretion is said to be not arbitrary or capricious but judicial; hence, also, if the contract has been entered into by a competent party, and is unobjectionable in its nature and circumstances, specific performance is as much a matter of course, and therefore of right, as are damages.
The mere hardship of the results will not affect the discretion of the court.
" Regarding the extent of the jurisdiction Fry wrote: "If a contract be made and one party to it make default in performance, there appears to result to the other party a right at his election either to insist on the actual per formance of the contract, or to obtain satisfaction for the non performance of it.
It may be suggested that from this it follows that a perfect system of jurisprudence ought to enforce the actual performance of contracts of every kind and class, except only when there are circumstances which render such enforcement unnecessary or inexpedient, and that it ought to be assumed that every contract is specifically enforceable until the contrary be shown.
But so broad a proposition has never, it is believed, been asserted by any of the Judges of the Court of Chancery, or their successors in the High Court of Justice, though, if prophecy were the function of a law writer, it might be suggested that they will more and more approximate to such a rule." As Chitty observes, the "prophecy has not been wholly fulfilled, for the scope of the remedy remains subject to many limitations.
" But the author observes a welcome move towards the more liberal view as to the extent of jurisdic tion which was favoured by Lord Justice Fry.
But where no contract has been entered into at all, there is no room for any liberal view.
Section 9 of the Specific Relief Act says that except as otherwise 363 provided in that Act where any relief is claimed under Chapter I1 of the Act in respect of a contract, the person against whom the relief is claimed may plead by way of defence any ground which is available to him under any law relating to contracts.
In the instant case the defence of there having not been a contract for lack of consensus ad idem was available to the defendant.
In view of the above conclusion, the appeal has to be dismissed.
We should, however, like before concluding, to refer to certain other aspects debated before us: (1) At a late stage of the arguments, it was contended on behalf of the appellant that the translation of Ext.
PW 1 1/A acted upon by the High Court, is not accurate and that it does not refer to Mayawanti as the owner of the Kohlus etc.
We directed the original records to be called for and also gave leave to the appellant to file a translation.
This has been done but the respondent does not accept this.
It was also mentioned on behalf of the appellant that the translator in the Supreme Court had found the original too illegible to be translated and it was requested that a translation may be allowed to be got done by an Advocate of this Court knowing the language.
We cannot permit this at this stage.
The unofficial translation filed tries to im prove upon the recorded translation of Ext.
PW 1 1/A in two respects.
First, the reference to Mayawanti as the owner is sought to be substituted by a reference to her as the vend ee.
So far as this is concerned, as already pointed out, even if we take the reference to Mayawanti in the exhibit as due to oversight, there are various other aspects of uncer tainty which render the terms of Ext.
PW 11/A specifically unenforceable.
The second improvement is the addition of a sentence at the end: "The purchaser either may take earnest money along with penalty or get the registry done forcibly.
I will have no objection.
" This is a totally new version which we cannot permit at this stage when it is objected to by the other side.
After all, the entry PW 11/A in the Deed Writer 's Register could not be treated as preappointed evidence.
It was not a piece of evidence prescribed in advance by statute as requisite for proof of the transaction of sale, as distinguished from casual evidence.
But it could not be allowed at the same time to grow out of the surround ing circumstances.
(2) A reference was made in the argument before us to an oral agreement preceding Ext.
PW 11/A.
But the terms of such oral 364 agreement are nowhere in evidence and the same uncertainties surround it as hover around Ext.
PW 11/A.
The High Court cannot, therefore, be faulted for not confirming the decree of specific performance on the basis of an oral agreement.
(3) A good deal of argument was also addressed before us as to whether PW 11/A was admissible as secondary evidence.
We have not touched upon this and have proceeded on the assump tion that the entries in the document writer 's register, signed by the parties, can itself be treated as an agreement between them the specific performance of which can be sought.
(4) Shri Gopal Subramaniam contended that the High Court has erred in holding, contrary to the earlier observations of this Court, that Ext.
PW 11/A was inadmissible.
There is no doubt a certain degree of ambiguity in the observations of the High Court in this regard.
But, reading the High Court 's judgment as a whole, we are inclined to accept the submis sion of Mr. Nariman that the High Court has only evaluated the exhibit in the light of the direction of this Court that "full effect will be given to the entry; no more, no less" and not rejected it as inadmissible, as contended for by the appellant.
We have referred to these aspects only because counsel had placed considerable emphasis on them in the course of arguments but in the view we have taken of the scope and effect of Ext.
PW 11/A, it is unnecessary to elaborate on them or to deal with certain other contentions urged before_us.
For the foregoing reasons we uphold the finding of the High Court that there was no valid and enforceable contract between the parties as evidenced by Ext.
PW 11/A.
The result is that this appeal fails and is dismissed, but under the peculiar facts and circumstances of the case without any order as to costs.
Interim orders, if any, stand vacated.
R.N.J. Appeal dis missed.

summary:
A civil suit was flied by the appellant herein against the respondent herein in the year 1973 praying for a decree for specific performance of the contract, in the alternative for a decree for a total sum of Rs. 16,000 including the earnest money of Rs.5,000 on averments inter alia that she had entered into an agreement dated 16.9.71 with the Re spondent for the purchase of a property with 2 Kohlus of 20 H.P. electric Motor etc., installed therein and jointly owned by the Respondent with her step mother in law Smt.
Lajwanti, for a consideration of Rs.50,000; that in case Smt.
Lajwanti did not join in the execution of the sale deed, the Respondent would sell her half share of the property for half the sale price; that pursuant to this agreement the Respondent handed over to the Plaintiff appel lant possession of her share of the property but later as arbitration proceedings were going on between the Respondent and her co sharer Smt.
Lajwanti, the Respondent took back the said agreement (styled as receipt) and thereafter ille gally took possession of the property from the appellant and declined to execute the sale deed in terms of the agreement.
The Respondent contested the suit on the pleas that she never intended to sell the suit property to the Plaintiff; that the agreement was a mere paper transaction brought into being for putting pressure on her co sharer; that the agree ment being not scribed on a proper stamped paper was inad missible in evidence; that the agreement related only to the moveable property; that no advance money was paid as alleged and lastly that pursuant to the compromise between the parties dated 9.1.72 350 the agreement dated 16.9.71 stood destroyed.
The trial Court disallowed the agreement Exhibit PW I I/A which constituted the foundation of the claim as inad missible in evidence and dismissed the suit.
The High Court on revision, allowed the revision peti tion of the appellant with the direction to the trial court to impound the document in accordance with law and then proceed with the case.
Respondent 's Petition for special leave against that order was dismissed by this Court.
Consequent to these orders of the Supreme Court and the High Court the Trial Court tried the suit afresh and passed a decree for specific performance which was affirmed by the Additional District Judge on appeal.
However on second appeal the High Court held that there was no valid and enforceable contract as evidenced by Exhibit PW.
II/A and thus instead of the decree for specific performance granted a decree for Rs.5,000 only by way of refund of the earnest money.
Hence this appeal by special leave by the Plaintiff.
Dismissing the appeal and upholding the finding of the High Court, this Court, HELD: The specific performance of a contract is the actual execution of the contract according to its stipula tions and terms, and the courts direct the party in default to do the very thing which he contracted to do.
The stipula tions and terms of the contract have, therefore, to be certain and the parties must have been consensus ad idem.
The burden of showing the stipulations and terms of the contract and that the minds were ad idem is, of Course, on the plaintiff.
If the stipulations and terms are uncertain and the parties are not ad idem there can be no specific performance, for there was no contract at all.
[362D E] Where there are negotiations, the Court has to determine at what point, if at all, the parties have reached agree ment.
Negotiations thereafter would also be material if the agreement is rescinded.
In the instant case the defence of there having not been a contract for lack of consensus ad idem was available to the defendant.
[363F; 364B] The jurisdiction of the Court in specific performance is discretionary.
When a promise is made in an alternative form and one 351 alternative is impossible to perform, the question whether the promiser ' is bound to perform the other or is altogether excused depends on the intention of the parties to he ascer tained from the nature and terms of the contract and the circumstances of the particular case.
[362F] The expression 'otherwise pay back the advance and compensation in the same amount ' is capable of being inter preted as payment of the amount as alternative to perform ance.
Of course the amount advanced and the compensation was stipulated to he the same amount.
That, however, would not effect the real character of the promise.
[361G]


judgement:
ivil Appeal No. 3488 of 1988.
From the Judgment and Order dated 14.7.
1988 of the Madhya Pradesh High Court in Second Appeal No. 17 of 1985.
568 G.L. Sanghi, S.K. Mehta, Aman Vachher and Atul Nanda for the Appellants.
Pramod Swarup for the Respondent.
The Judgment of the Court was delivered by R.M. SAHAI, J.
This tenant 's appeal is directed against order passed by Madhya Pradesh High Court in proceedings arising out of Section 12(1)(f) of the M.P. Accommodation Control Act, 1961.
In 1976, the landlady filed an application for eviction under Section 12(1)(f) of the Act as the accommodation in occupation of appellant was required bona fide for continu ing tailoring business of her son who was doing it since 1970 in a small room of the same premises in the lane which was both unsuitable and inadequate.
Her claim was accepted by the Trial Court as necessity was valid and the landlady had a right to reside in any part of the house.
In appeal various objections raised on behalf of tenant, namely, feasibility of shifting business to one more room in the house or that additional accommodation was available were repelled.
It was further found that landlady 's husband had a flourishing tailoring business during British days but it suffered setback and he later became blind.
The appeal was, however, allowed and the application was dismissed as in opinion of Appellate Court the Trial Court had incorrectly understood the dimension of the shop.
It did not find any merit in the submission that the shop was irregularly built and was unsuitable for doing business.
After discussing the evidence it found that the business of landlady 's son was very poor and not growing at all.
Therefore, the accommoda tion in his possession was not at all insufficient and unsuitability was also not proved.
1n Second Appeal by the landlady the High Court did not agree with the Appellate Court and found that the need of the landlady was genuine and bona fide as the shop in dispute was not sufficient for four machines and two or three servants.
Principal attack was on jurisdiction of High Court to interfere with finding of fact in second appeal.
Defence was equally vehement.
But it appears unnecessary to examine it as out of various aspects highlighted one was sufficiency of accommodation with tenant even if he vacated the shop in dispute.
Since it was not clear from order of any Court time was granted on conclusion of argument to learned counsel for parties to file affidavit explaining the extent of accommo dation and the status of the tenant.
Without going into status as that is disputed it 569 is apparent rather undisputed that landlady whose husband at one time had flourishing business is now in dire circum stances.
To keep both the ends meet the family depends not only on meagre income from rent and tailoring shop but the landlady had even to part with another room of the same house adjacent to shop in dispute to one Rataley which is now in possession of tenant.
Financial difficulty apart the tenant admittedly has not only this shop with 27 '6" on one side and 20 ' on the other, but another shop of approximately the same dimension.
May be the wall in between the two rooms has been removed and entire has been converted into a big shop.
But the tenant has two shops each with spacious accom modation facing the road and the landlady 's son has one with irregular dimension of 10 '9"in front and 3.8 ' in back in a lane in most unhygienic conditions, in front of which many doors of latrines of other houses open.
Therefore, on the one hand is the tenant in occupation of two big rooms in which he is carrying on business luxuriously whereas the landlady 's son is sandwiched in back of her own house in unhealthy surroundings with not enough place for 3 or 4 machines with two or three helpers what to say of trial room or other facilities for customers.
The pathetic and pitiable condition of the landlady with no injury to the tenant except that he shall be required to carry on business from one shop only are circumstances which prevent this Court from interfering with the order of the High Court as in our opinion substantial justice has been done between parties.
Therefore it appears unnecessary to examine if the High Court committed any error in exercise of jurisdiction under Section 100 Civil Procedure Code.
In the result the appeal fails and is dismissed.
But there shall be no order as to costs.
P.S.S. Appeal dismissed.

dataset_name: IN-Abs

summary:
The respondent landlady sought eviction of the appellant under section 12(1)(f) of the M.P. Accommodation Control Act, 1961 on the ground of bona fide requirement for continuing tailoring business of her son, being carried on in a small room of the same premises.
The trial court accepted the claim.
The appellate court, however, allowed the appeal on the ground that the business of the landlady 's son was very poor and not growing at all and, therefore, the accommoda tion in his possession was not at all insufficient.
The High Court found that the need of the landlady was genuine and bona fide.
Dismissing the tenant 's appeal, this Court, HELD: The landlady whose husband at one time had a flourishing business was now in dire circumstances.
To keep both the ends meet the family depended not only on meagre income from rent and tailoring shop but the landlady had even to part with possession of another room of the same house adjacent to the shop in dispute to another tenant.
Financial difficulty apart, the tenant admittedly had two shops each with spacious accommodation facing the road while the landlady 's son had one with comparatively small and irregular dimension in a lane in most unhygienic conditions, with not enough place for 3 or 4 machines with two or three helpers, what to say of trial room or other facilities for customers.
The pathetic and pitiable condition of the land lady with no injury 40 the tenant except that he shall be required to carry on business from one shop only, do not call for interference with the order of the High Court.
[569A E]


judgement:
ivil Appeal No. 539 of 1976.
From the Judgment and Order dated 26.8.1975 of the Gujarat High Court in Spl.
Civil Application No. 1627 of 1972.
Soli J. Sorabjee, Attorney General, A. Subba Rao, C.V.S. Rao, P. Parmeswaran and Ms. Nisha Bache for the Appellants.
S.K. Dhingra for the Respondents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
By this appeal Union Government has challenged correctness of construction by High Court of Gujarat of notification No. 163 of 1965 issued under Rule 8 framed under Central Excise and Salt Act allowing exemption to all sorts of papers by "any factory commencing produc tion" to refer "not to the production of excisable goods paper in general failing under Item 17, but to pro duction of these specified exempted categories of paper in Column 2 of this notification" and canvasses for acceptance of the construction put on it by the Collector, Central Excise "that the factory must have commenced production on or after that date and not that the production of these items must have been commenced after the date".
M/s. Arvind Boards & Paper Products Limited, Antalia, Bilimora, Gujarat State, was established in 1942.
From 1944 when it went into production till 1964 it manufactured only straw boards and mill boards.
It expanded its activities in 1965 and commenced manufacture of duplex board.
The packing and wrapping paper was manufactured 661 on experimental basis in 1966 and on commercial basis after 1967.
In December, 1971 the company wrote a letter to the Assistant Collector of Central Excise inquiring as to wheth er the company would be entitled to exemption under notifi cation No. 163/65 both in respect of the production at tributable to its installed capacity as in 1967 as well as in respect of the production attributable to its expanded capacity.
In 1972 it was informed that it would be entitled to concession under Column 5 of the Table of the notifica tion in respect of the production attributable to the en larged capacity, namely, the third machine only.
Consequent ly the claim of the petitioners for exemption on capacity as it existed in 1967 was not accepted.
The order was main tained in appeal as well.
The Appellate Collector held: "I do not agree with the appellant 's contention that the Assistant Collector erred in holding that "any factory which commenced production" related to any factory manufacturing paper falling under Item 17 of the said schedule irrespec tive of the varieties manufactured thereof.
The exemption contained in the aforesaid Notification No. 163/65 as amend ed is in respect of the goods.
Said exemption is conditional i.e. it is applicable to paper produced in a factory which commenced production on or after a specific date.
Therefore, the condition is that the factory must have commenced pro duction on or after that date and not that the production of these items must have been commenced after that date.
" The High Court did not agree with the construction of the Notification made by the Collector (Appeal) and held: "That is why the whole controversy has arisen as regards these key words "commencement of production".
On a plain literal construction, bearing in mind the context of the exemption, where only certain specified categories of paper which is excisable item as specified in Column 2 had been exempted, it is obvious that the commencement of production must refer not to the production of excisable goods paper in general falling under item 17, but to production of these specified exempted categories of paper in Col. 2 of this notification.
Any other interpretation would make the speci fication of various kinds of paper in Column 2 which alone attracted exemption redundant and would make even this condition in Cols.
3, 4 and 5 unworkable.
" Excise duty was leviable under the Act on manufacture and clearance of paper under Item 17 of Schedule 1 to the Act.
It reads as 662 "MANUFACTURED GOODS CLASSIFIED CHIEFLY BY MATERIAL 17.
PAPER, all sorts (including pasteboard, millboard.
straw board and cardboard), in or in relation to the manu facture of which any process is ordinarily carried on with the aid of power '.
XXX XXX XXX (3) Printing and writing paper, packing and wrapping paper, straw board and pulp board, including grey board, corrugated board, duplex and triplex boards, other sorts . . 35 paise per kg." In 1965 the Central Government issued notification exempting papers of all sorts, from so much of the excise duty levi able thereon under the said item read within notification for the time being in force issued by the Central Government in relation to the duty so leviable, as is specified in the corresponding entry in Columns 3, 4, 5(a), 5(b) & 5(c) of the Table as the case may be: TABLE section Des Any factory Any factory Any factory commen cription which comm which comm production for the enced pro enced pro time on or after the duction duction on 1st March, 1964, or before the or after the any factory existing 1st April, 1st April, immediately, before 1961.
1961 but the 1st March 1964 before the whose production 1st March capacity has been 1964.
enlarged and brought into operation on or after the extent such production is attributable to the enlarge capacity.
During the During During the first 12 the period months of second subsequent the com 12 mon to the first mencement mence 24 months of produc ment of of the com duction.
produc mencement of produc tion.
663 1 2 3 4 5(a) 5(b) 5(c) Entitlement of exemption depends on construction of the expression "any factory commencing production" used in the Table extracted above.
Literally exemption is freedom from liability, tax or duty.
Fiscally it may assume varying shapes, specially in a growing economy.
For instance tax holiday to new units, concessional rate of tax to goods or persons for limited period or with the specific objective etc.
That is why its construction, unlike charging provi sion, has to be tested on different touchstone.
Infact an exemption provision is like an exception and on normal principle of construction or interpretation of statutes it is construed strictly either because of legislative inten tion or on economic justification of inequitable burden or progressive approach of fiscal provisions intended to aug ment state revenue.
But once exception or exemption becomes applicable no rule or principle requires it to be construed strictly.
Truly, speaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it.
When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about ap plicability is lifted and the subject fails in the notifica tion then full play should be given to it and it calls for a wider and liberal construction.
Therefore, the first exer cise that has to be undertaken is if the production of packing and wrapping material in the factory as it existed prior to 1964 is covered in the notification.
From the table extracted above it is clear that it is in two parts and exemption is allowable in the first part to the factory commencing production on or after 31st March, 1964, and in the second part to the existing factory to extent of enlarged capacity.
If the first part is read in isolation it is susceptible of construction as was adopted by the High Court.
But the notification has to be read in its entirety and constured as a whole.
Once that is done cloud of uncertainty disappears.
A close reading of both the parts together leaves no room for doubt that it was intended to be exhaustive granting exemption to all factories produc ing packing and wrapping paper whether existing or commenc ing production from 1st March, 1964.
To the former to the extent of enlarged capacity and to latter to full extent.
The ambiguity arose because of absence of words new before 'factory ' or goods after the word 'production ' in the first clause.
To harmonise it the High Court added the words 'goods '.
But what was lost sight of that the words 'commenc ing ' in the first part and 'existing ' in the second part had to be read in juxtaposition.
That is all those factories which were existing from before 664 were entitled to exemption on production of goods to the extent of enlarged capacity.
This enlargement could be as a result of installation of additional machinery.
The word 'capacity must necessarily relate to capacity of factory and not to goods.
For instance a factory with capacity of say 1 lakh kg. of paper but producing only 75 thousand kg.
achiev ing maximum after 1964 could not be covered in the clause as the production cannot be held to be due to enlarged capaci ty.
That could be only if the capacity to produce goods increased due to installation of additional machinery.
If this be true and correct, as it appears to be, then the first part presents no difficulty.
The expression 'commenc ing production ' has to be read as commencing production of goods by a factory which was not existing and has started production on or after 1st March, 1864.
Any other construc tion shall result in discrimination.
A factory like respond ent existing from 1942 producing straw board and mill board shall be entitled to exemption on production of wrapping and packing paper on construction of the expression 'commencing production ' by the High Court even though it switched over from straw board and mill board to packing and wrapping paper after the relevant date whereas another unit existing and producing wrapping and packing paper itself from before 1st March, 1964 could not be entitled to exemption except to the extent of enlarged capacity.
That is if an existing unit would have installed a new machinery it would have been entitled to exemption of production only to that extent whereas any unit producing goods other than the exempted goods would become entitled to exemption in respect of entire production.
That could not have been the intention.
A construction which results in inequitable results and is incongruous, has to be avoided.
Therefore, production of packing and wrapping paper by respondent was entitled to exemption only to the extent it was attributable to enlarged capacity and not to the existing capacity.
Hansraj Goverdhan vs
H.H. Dave, Asstt.
Collector, Central Excise & Customs, Surat and Others, relied on behalf of respondent demonstrates mis conception about interpreting an exemption provision.
It was a case where goods of third persons were manufactured by cooperative society.
But once initial hurdle was crossed and it was held that goods had been produced by cooperative society it was found squarely covered in the notification and the Court extended it to goods manufactured by third persons and repelled the submission that object of granting exemption was to encourage formation of cooperative societies and it should be confined to goods manufactured by its members and not others.
Similarly in Commissioner of Income Tax vs Madho Prasad, ; the provision 665 allowing exemption to 'such part of the income in respect of which the said tax is payable.
under the head 'property ' as is equal to the amount of rent payable for a year ', was construed liberally and it was held that the expression 'equal to the amount of rent payable for a year ' did not 'warrant the inference that the benefit of exemption ' could 'be claimed only once ' because the amount of rent which was sought to be deducted in more than one years was found squarely to fall in Item 36 of notification.
It was again a case of interpreting an exemption notification at later stage.
Recently in Tata Oil Mills Co. Ltd. vs Collector of Central Excise, ; , exemption was to soap made from indigenous rice bran oil as against edible oil.
The assessee was engaged in manufacture of soap from rice bran fatty acid which was extracted from rice bran oil, in assesses factory.
It was found rice bran oil as such could not be used unless it was converted into fatty acid.
Therefore the assessee was covered in the notification.
Once the ambiguity or about manufacture of soap from rice bran fatty acid was removed the Bench proceeded to construe the word "indigenous" in the notification liberally.
In Collector of Central Excise vs Parle Exports (P) Ltd., AIR 1989 644 this Court while accepting that exemption clause should be construed liberally applied rigorous test for determining if expensive items like Gold Spot base or Limca base or Thums Up base were covered in the expression food products and food preparations used in item No. 68 of First Schedule of Central Excise and Salt Act and held 'that it should not be in consonance with spirit and the reason of law to give exemption for non alchoholic beverage basis under the notification in question. ' Rationale or Ratio is same.
Do not extend or widen the ambit at stage of applicability.
But once that hurdle is crossed construe it liberally.
Since the respondent did not fall in the first clause of the notification there was no question of giving the clause a liberal construction and hold that production of goods by respondent mentioned in the notification were entitled to benefit.
In the result this appeal succeeds and is allowed.
The order of the High Court is set aside and the Writ Petition is dismissed with costs.
R.N.J. Appeal allowed.

summary:
The Respondent Company which was established in 1942 went into production in 1944 manufacturing Straw Boards and Mill boards only uptil the year 1964.
In 1965 it expanded its activities by manufacturing duplex board.
In the follow ing year it started manufacturing packing and wrapping paper on experimental basis and on commercial basis after 1967.
Sometime in 1971 the Company wrote to the Assistant Collec tor of Central Excise enquiring as to whether it would be entitled to exemption from duty under Notification No. 163/1965 both in respect of production attributable to its installed capacity as in 1967 as well as in respect of production attributable to its expanded capacity.
The As sistant Collector passed an Order holding the company was entitled to concession under column 5 of the Table of the Notification No. 163 of 1965 in respect of production at tributable to its enlarged capacity namely, the third ma chine and rejected its claim for exemption on production attributable to its capacity as it existed in 1967.
Dissat isfied the company preferred appeal to the Appellate Collec tor who maintained the order of the Assistant Collector.
The Respondent Company thereupon moved the High Court by a writ petition under Article 226 of the Constitution of India.
In allowing the writ Petition the High Court held that on a plain literal construction it is obvious that the commencement of production must refer not to the production of excisable goods paper in general failing under item 17.
but to production of those specified exempted categories of paper in column 2 of the aforesaid notification.
Hence this appeal by the Union of India.
Allowing the appeal and dismissing the Writ Petition of the Company.
this Court.
HELD: When the question is whether a subject falls in the Notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is removed and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction.
[663D E] A close reading of both parts of the Notification together leaves no 660 room for doubt that it was intended to be exhaustive grant ing exemption to all factories producing packing and wrap ping paper whether existing or commencing production from 1st March.
1964 to the former to the extent of enlarged capacity and to latter to the full extent.
[663G H] As the Respondent Company did not fall in the first clause of the notification there was no question of giving the clause a liberal construction and hold that production of goods by the Respondent mentioned in the Notification were entitled to the benefit.
Production of packing and wrapping paper by Respondent was entitled to exemption only to the extent it was at tributable to enlarged capacity and not to the existing capacity.
[665F; 664F] Hansraj Goverdhan vs H.H. Dave, Asstt.
Collector, Cen tral Excise & Customs, Surat and Others, [1969] 2 S.C.R. 2.52; Commissioner of Inome tax vs Madho Prasad, ; ; Tara Oil Mills Co. Ltd. vs Collector of Central Excise, ; referred to.


judgement:
ivil Appeal Nos.
1936 & 1937 of 1990.
From the Judgment and Order dated 26.7.1989 of the Delhi High Court in C.W.P. No. 852 of 1989 and 2852 of 1988.
S.K.Mehta, Aman Vachhar and Atul Nanda for the Appellants.
S.C. Manohanda, Manoj Arora, V.K. Sharma and R.K. Maheshwari for the Respondents.
630 The Judgment of the Court was delivered by RANGANATHAN, J.
After hearing counsel for all parties, we grant special leave in these two petitions and proceed to dispose of the appeals finally by this common order as the point involved is a common one.
We are dealing with the matter at some length as it raises certain important aspects of the Stamp Act, 1899 and the which are likely to come up for consideration frequently.
Shanti Devi, the petitioner in SLP No. 15093 of 1989, was the highest bidder at an auction sale of house property bearing No. A 205, Defence Colony, New Delhi con ducted on 29.2.88 by the Tax Recovery Officer (T.R.O.) for realising the income tax dues of its owner.
Her bid was accepted and the sale confirmed on 13.4.1988.
On 14.4.1988 a certificate of sale was issued by the T.R.O. to the peti tioner.
Under the relevant rules, a copy of the certificate of sale should have been endorsed to the Sub Registrar but it was actually sent to the Sub Registrar on 12.5.1988.
The petitioner in SLP No. 138 of 1990 purchased property bearing No. 112 113, Gautam Nagar, Delhi at an auction conducted by the Income tax department.
A certificate of sale in their favour was issued on 23.5.1988.
A copy of the sale certifi cate was forwarded by the T.R.O. to the Sub Registrar.
The purchasers thereafter attempted to get the property registered by the Sub Registrar in their names.
The Sub Registrar and the Collector of Stamps did not accede to this request apparently on the ground that this could not be done unless stamp duty was paid on the certificate of sale.
On the petitioner 's request, the T.R.O. also addressed a couple of letters to the Sub Registrar and Collector which may be referred to here.
With his letter dated 12.5.1988 to the former, the T.R.O. enclosed an extract from the Tax Recovery Inspectors Manual issued by the Income Tax department which reads as follows: "After confirmation of sale of immovable property a certificate in form ITCP 20 will be issued.
The original of this sale certificate is liable for stamp duty and a further duty of Rs.4.50 is also chargeable on the copy of the sale certificate to be forwarded to the Sub Registrar.
These charges (which may vary from State to State) are to be borne by the auction purchaser.
The original sale certificate thus issued will be the title for the property and it has the same value as a sale deed and it does not require registra tion by the purchaser.
Thus the auction purchaser is saved expenses of 631 registration etc.
This office itself will send a copy of the sale certificate for registration to the concerned Sub Registrar for making necessary entries in his registers." (underlining ours) The Collector of Stamps was addressed directly by the T.R.O. on 29.9.1988 in relation to the Gautam Nagar property.
In that letter the T.R.O. stated that he had received legal advice that no stamp duty was payable on the certificate of sale.
The attention of the Collector was drawn to the fact that a copy of the sale certificate had been sent to the Sub Registrar as required under Rule 21 of the Income tax (Certificate Proceedings) Rules ITCP rules which runs as follows: "21.
Every Tax Recovery Officer granting a certificate of sale to the purchaser of immovable property sold under the second schedule shall send a copy of such certificate to the Registering Officer concerned under the Indian ( 18 of 1908) within the local limits of whose jurisdiction the whole or any part of the immovable property comprised in the certificate is situate.
" The Collector was requested to inform the Sub Registrar accordingly to make necessary entries in the registers regarding the auction sale of the above immovable property on the basis of the copy of sale certificate sent to him.
Apparently, no further action was taken by the Sub Registrar or Collector in the matter and, hence, each of the petitioners applied to the Delhi High Court under Article 226 of the Constitution.
The T.R.O., the Collector, the Sub Registrar, Delhi Administration and the Municipal Corpo ration of Delhi were impleaded as respondents.
The petition er prayed for a writ of mandamus or any appropriate writ or order or direction to the respondents to register the cer tificate of sale and mutate the property in the name of the petitioner.
The Delhi Administration and the Municipal Corporation were added as parties since they did not respond to the petitioner 's request to effect mutation entries in the Corporation register, presumably on account of the petitioner 's failure to pay the "transfer fees" leviable as additional stamp duty under the Delhi Municipal Act.
The writ petition was dismissed at the stage of admission by the Delhi High Court.
The learned Judges passed a short order to the following effect: "Under section 29(f), read with Schedule I (Article 18) and section 3 632 of the Stamp Act, the liability to pay the Stamp Duty is of the purchaser, unless there is a specific contract to the contrary in this regard.
In this case the auction notice is silent as to who is to pay the Stamp Duty.
In other words, it does not create liability for the Government to pay the Stamp Duty.
Hence the general provisions of law which are quoted above would be applicable.
Dismissed.
" Each of the petitioners has thereupon, preferred this spe cial leave petition before this Court.
On the above facts, three different and separate ques tions arise for consideration: (1) What is the action to be taken by the SubRegistrar when the copy of a certificate of sale is forwarded to him by the T.R.O.? (2) Is the vendee in a sale by the T.R.O. entitled to ask the T.R.O. to make entries regarding the transfer in his records on the basis of the copy of the certificate of sale sent to him by the T.R.O.? (3) What is the procedure to be followed by the Sub Registrar when the original certificate of sale is produced before him by the vendee? The first of the above questions is directly answered by section 89 of the Indian .
This section provides for the procedure to be followed in certain situa tions; in particular, in cases where sales are effected either by courts under the Code of Civil Procedure or by revenue officers in pursuance of a revenue recovery certifi cate.
Under section 89(2), every court granting a certificate of sale of immovable property under the Code of Civil Proce dure, 1908, shall send a copy of such certificate to the registering officer within the local limits of whose juris diction the whole or any part of the immovable property comprised in such certificate is situate.
Sub section (4) of section 89 makes a similar provision in respect of immovable properties sold by public auction by a revenue officer who issues a certificate of sale in pursuance of the auction.
The sub sections further provide that when the copy of the certificate of sale is so received, such "registering offi cer snail file the copy or copies; the case may be, in his Book No. 1.
" So far as sales for recovery of income tax are concerned, rule 21 of the ITCP rules, quoted earlier, makes a like provision requiring the concerned T.R.O. to send a copy of :he certificate of sale to the registering officer concerned.
A doubt may arise whether the expression revenue officer ' in section 84 (4) of the includes a T.R.O.; and, if not, whether, without an appropriate amend ment of section 89 (2) or (4) of the , the mere framing of a rule by the Central Board of Direct Taxes under the Income tax Act, 1961 will be 633 sufficient to oblige the registration officer to file a copy of the certificate of sale sent to him by the T.R.O. in his Book No. 1.
In our opinion, there is no need to read the term 'revenue officer ' in any restricted sense and that it is wide and comprehensive enough to include the T.R.O. who effects a compulsory sale for the recovery of an income tax demand.
We are therefore clear that, in the present case, the registration officer has to act in terms of section 89(4) of the Indian read with rule 21 of the ITCP rules.
This is to file the copy of the certificate of sale received by him from the T.R.O. in his Book No. 1.
This takes us to the second question as to whether filing of a copy of the certificate in Book No. 1 within the meaning of section 89 is tantamount to the registration of the document under the or it is a totally different concept.
The registration of a document under the Act is conditional on the fulfilment of several requirements (Ss. 32 to 35).
The document has to be presented for regis tration by a person competent to do so.
The persons execut ing the document should appear before the Sub Registrar and admit or deny execution of the document.
The Sub Registrar may conduct an enquiry, where needed, to satisfy himself as to the proper execution of the document.
He will decide to admit the document to registration only if he is satisfied on this.
What he has to do once he admits a document to registration is laid down in Ss. 51 to 67.
First, he is bound to endorse full particulars and details of the regis tration on the document presented to him and also obtain the signature of every person presenting the document.
He should then, without delay copy the entire document in the appro priate book maintained for the purpose (which, in respect of non testamentary instruments relating to immovable property, is Book No. 1).
The entries in each book nave to be consecu tively numbered year wise and corresponding entries should be contemporaneously made in current indices to be main tained in every office.
The officer should affix his signa tures to the endorsements made in his presence and then endorse a certificate on the document that it is registered together with the registration particulars which shall be signed, sealed and dated by him.
The document is then re turned to the person presenting it for registration.
The books and indices are available for public inspection and certified copies thereof are to be given to parties applying for them.
This, in brief, is the process of registration.
On the other hand, the process of filing that is contem plated under the Act is somewhat different though the Act does interchange 634 the two expressions in some places.
For instance, section 51(2) itself refers to all documents or memoranda registered under section 89 being entered or filed in Book No. 1.
But there appear to be vital differences between the two processes: (i) It is the original of a document that is registered whereas only copies or memoranda are filed; (ii) The executant of a document which is required to be registered, has to present it for registration and go through the attendant and subsequent processes described above.
A copy to be filed under section 89 or memoranda that are filed under Ss. 64 to 66 is simply transmitted to the con cerned Sub Registrar for being filed.
Apparently, the proce dure of presentation is dispensed with in regard to the latter because they are issued by public authorities dis charging their official duties.
(iii) Additional particulars relevant to a document admitted to registration need to be got endorsed thereon from time to time as contemplated in Ss. 58 and 59 but this rule does not apply to a copy or memorandum filed under the Act.
(iv) When a document is registered, the entirety of the document has to be copied out into the relevant book and the original document returned to the person who presents the document with necessary endorsements.
This requirement is absent in the case of a copy or memorandum which is just filed.
(v) Where a document is registered, a certificate of regis tration has to be issued which will be admissible to prove the due registration of the document.
There are thus some differences between the two pro ceedures and this aspect has been touched upon in some very early decisions under the Registration Act, 1877: vide, Fatteh Singh vs Daropadi, [1908] Punj.
Case No. 142; Siraj un nissa vs Jan Muhammad, ; Masarat un nissa vs Adit Ram, All. 568 (F.B.).
Refer ence may also be made to Premier Vegetable P. Ltd. vs State, AIR 1986 M.P. 258.
We need not, however, consider for the purposes of this case whether filing and registration mean one and the same thing for all purposes and ' what the legal effect of these differences is.
For, though the processes are different, the purchaser at a court or revenue sale is under no disadvantage because of the lack of 635 registration.
The certificate of sale itself not being a compulsorily registrable document: vide section 17(2)(xii), the transfer of title in his favour is not vitiated by the non registration of the certificate.
The copy of the certificate filed in Book No. 1 contains all the relevant details.
These details are reflected in the indices maintained under section 55 which are open to inspection to all persons.
(We may point out here that section 55(2) only refers to memoranda filed but it seems clear, particularly in the light of various State amendments, that the index to Book No. 1 should also contain the details of copies of document filed by him).
These requirements are sufficient to ensure that any person in tending to purchase or deal with the property is put on notice about the principal contents of the certificate of sale provided he inspects the relevant book and/or index.
It is sufficient to say, for the purposes of this case, that all that the Sub Registrar required to do is to file the copy of the certificate in Book No. 1 and no more.
He does not have to copy out the certificate or make any other entries in Book No. 1.
We now come to the last question and that is whether the certificate of sale is liable to stamp duty and, if so, what the consequences are.
The High Court has referred to section 3, section 29(f) and Article 18 of Schedule I to the Stamp Act.
This provision applies in the absence of a contract to the con trary.
Prima facie, therefore, the view taken by the High Court and there are other decisions also to the same ef fect is correct unless a contract to the contrary can be spelt out.
The auction notice did not promise any exemption from stamp duty.
The extract quoted earlier from the Depart mental Manual (viz. that both the certificate and copy are liable to stamp duty) also renders it unlikely that any promise was given by the TRO at the time of sale that no stamp duty will be payable.
However the T.R.O. 's letter to the Collector referring to the legal advice obtained by him strikes a somewhat inconsistent note.
Even if there had been any such mention by the TRO or the auctioneer, the question would arise whether it can be construed as a contract to the contrary binding on the Union for the purposes of section 29(f) of the Stamp Act.
Sri Mehta requests that we may not now go into these questions but leave the issue to be decided as and when the petitioners seek to have the certificate of registration registered or introduced in evidence before any court or authority entitled to take evidence which is at present a remote contingency.
There are two provisions in the Stamp Act which provide for the adjudication of stamp duty.
Under section 31, it is open to the executants of any document, at any stage but within the time limit set out in section 32, to produce a document before the Collector of Stamps and require him to 636 adjudicate on the question whether the document should bear any stamp duty.
The Collector thereupon may adjudicate the stamp duty himself or refer the matter to the Chief Control ling Revenue Authority of the State.
In turn, it is open to the Chief Controlling Revenue Authority to refer the matter to the High Court for an authoritative decision (Ss. 32 and 56).
This procedure could have been followed by the peti tioners if they wished to seek an answer to the question whether the certificate of sale is liable to stamp duty but they have not done it and the time limit under section 32 has run out.
The other provision that may become applicable is section 33.
Under this section, if any document (and this includes a certificate of sale) is presented to the Registrar for registration and the Registrar is of opinion that it is a document which should bear stamp duty but that it has not been stamped, it is his duty to impound the document and send it on to the Collector of Stamps for necessary adjudi cation (section 38).
This contingency has also not happened.
The third contingency, also provided for in section 33 is when a party wishes to rely upon the certificate of sale as a piece of evidence before a court or an authority entitled to take evidence.
Such court or authority will also have to impound the document and shall not admit the same in evidence unless the stamp duty chargeable and the stipulated penalty are paid.
This situation has not arisen so far but may arise at some time in future.
It is unnecessary to anticipate the same and decide the issue.
We shall therefore leave the issue of stamp duty to be adjudicated upon in the normal course, as and when found necessary, and express no views thereon at this stage.
We should, however, like to deal with a contention raised in the grounds that even if the certificate of regis tration is sought to be presented for registration by the petitioners, the Sub Registrar has no jurisdiction to refuse registration on the ground that the document is insuffi ciently stamped.
As already pointed out, section 17(2)(xii) of the Registration Act makes it clear that the certificate of sale issued in a court sale or by a revenue officer does not need registration.
(Though this provision, like section 89, relates only to a certificate of sale granted to the pur chaser of any property sold by public auction by a civil court or revenue officer, for the same reasons as have been set out earlier, we think that the certificate issued by the TRO is also covered by this provision).
It is, therefore, clear that it is not obligatory on the purchaser of property in a tax recovery sale to get the certificate of sale regis tered in order to perfect his title.
However, if he presents the original certificate of sale to the Registration Officer for registration, the Registration Officer will have to comply with the relevant statutory provisions in this re gard.
However this situation has not arisen as yet 637 and it is unnecessary to anticipate it and decide the point.
We therefore do not express any opinion thereon.
This leaves for consideration the question in regard to the municipal transfer fee.
No details have been placed before us on this issue.
The payability of the municipal transfer fee perhaps depends upon the payability of stamp duty but our attention has not been invited to the relevant statutory provisions or their interpretation.
The High Court has given no separate finding on this issue.
We also express no opinion particularly since we are not expressing any opinion on the question as to whether Stamp Duty is payable on the certificate of sale or not.
It will be open to the petitioners to contest this levy in other appropriate pro ceedings.
For the above reasons, we are of opinion that these appeals have to be allowed in part.
The Sub Registrar is directed to file the copy of the certificate of sale re ceived by him from the T.R.O. in his Book No. 1 as required by section 89(4) of the Act read with rule 21 of the Income tax (Certificate Proceedings) Rules, 1962.
The petitioners are entitled to ask for nothing more.
We express no opinion on the question as to whether any stamp duty or municipal transfer fees are payable in respect of the original certif icate of sale.
The appeals are accordingly disposed of.
There will be no order as to costs.
N.P.V. Appeals allowed partly.

summary:
The appellants purchased properties in auction sales conducted by the Tax Recovery Officer for recovery of income tax and were issued sale certificates.
Copies of certifi cates were also sent to the SubRegistrar, as required under Rule 21 of the Income Tax (Certificate) Proceedings Rules ITCP Rules.
The appellants approached the SubRegis trar for getting the properties registered in their names but the Sub Registrar and the Collector of Stamps refused to do so unless stamp duty was paid on the certificate of sale.
At the appellants ' request, the Tax Recovery Officer also addressed the two officers for getting the entries made in the Register on the basis of the copy of sale certificate.
He also informed the Collector of Stamps that according to the legal advice given to him no stamp duty was payable on the certificate of sale.
However, no action was taken by either of the officers.
The appellants ' request to Delhi Administration and Municipal Corporation to effect mutation entries in the Corporation Register, was also not acceded to on account of the appellants ' failure to pay the transfer fees, leviable as additional stamp duty under the Delhi Municipal Act.
Therefore, the appellants filed writ peti tions before the High Court praying for directions to the respondents to register the certificate of sale and mutate the property in the name of the appellants.
The High Court dismissed the petitions holding that, in the absence of specific contract to the contrary, the liability to pay the stamp duty was that of the purchaser.
628 Allowing the appeals by the purchasers, partly, this Court, HELD: 1.
Under section 89(4), every Revenue Officer, granting a certificate of sale of immovable property or public auction should send a copy of such certificate to the registering officer within the local limits of whose juris diction the whole or any part of the immovable property comprised in such certificate is situate, and such register ing officer shall file the copy or copies, as the case may be, in his Book No. 1.
So far as sales for recovery of income tax are concerned rule 21 of the ITCP Rules, makes a like provision requiring the concerned T.R.O. to send a copy of the certificate of sale to the registering officer con cerned.
[632E G] There is no need to read the term 'revenue officer ' in any restricted sense.
It is wide and comprehensive enough to include the T.R.O. who effects a compulsory sale for the recovery of an income tax demand.
The registration officer has to act in terms of section 89(4) of the Indian Registra tion Act read with Rule 21 of the ITCP Rules and file the copy of the certificate of sale received by him from the T.R.O. in his Book No. 1.
[633A B] 2.
Section 17(2)(xii) of the makes it clear that the certificate of sale issued in a court sale or by a revenue officer does not need registra tion.
Though this provision, like section 89, relates only to a certificate of sale granted to the purchaser of any property sold by public auction by a civil court or revenue officer, the certificate issued by the T.R.O. is also cov ered by this provision.
It is, therefore, not obligatory on the purchaser of property in a tax recovery sale to get the certificate of sale registered in order to perfect his title.
However, if he presents the original certificate of sale to the Registration Officer for registration, the Registration Officer will have to comply with the relevant statutory provision in this regard.
[636F H] 3.1 The Certificate of sale itself not being a compulso rily registerable document: vide section 17(2)(xii), the transfer of title in favour of the purchaser is not vitiated by the non registration of the certificate.
The copy of the certificate filed in Book No. 1 contains all the relevant details.
These details are reflected in the indices main tained under section 55 which are open to inspection to all persons.
These requirements are sufficient to ensure that any person intending to purchase or deal with the property is put on notice about the principal contents of the certif icate of sale provided he inspects the relevant book and/or index.
[635A C] 629 3.2 Therefore, in the instant case, all that the Sub Registrar is required to do is to file the copy of the certificate in Book No. 1 and no more.
He does not have to copy out the certificate or make any other entries in Book No. 1.
[635C] 4.1 Under Sections 3, 29(f) and Article 18 of Schedule I of the Stamp Act, 1899 the liability to pay stamp duty is of the purchaser to the contrary can be spelt out.
[635D] In the instant case, the auction notice did not promise any exemption from stamp duty.
The Tax Recovery Inspectors ' Manual which states that both the certificate and copies are liable to stamp duty, also renders it unlikely that any promise was given by T.R.O. at the time of sale that no stamp duty will be payable.
However, the T.R.O. 's letter to the Collector of stamps referring to the legal advice given to him strikes a some what inconsistent note.
However, the issue of stamp duty is felt to be adjudicated upon in the normal course, as and when found necessary.
[635E G] 4.2 The payability of municipal transfer fee depends upon the payability of stamp duty.
It will be open to the appellants to contest this levy in other appropriate pro ceedings.
[637B] 5.
The Sub Registrar is directed to file the copy of the certificate of sale received by him from the T.R.O. in his Book No. 1 as required by section 89(4) of the read with Rule 21 of the IncomeTax (Certificate Proceed ings) Rules, 1962.
[637D] Fatteh Singh vs
Daropadi, [1908] Punj.
Case No. 142; Sirajun nissa vs Jan Muhammad, ; Masarat un nissa vs Adit Ram, All. 568 (F.B.) and Premier Vegetable P. Ltd. vs State, AIR 1986 M.P. 258.
referred to.