- (1.)THIS appeal arises out of a suit for specific performance filed by the plaintiff, who has succeeded in both the Courts below. The defendants' contention was that the agreement in question was really a usufructuary mortgage and that there was no agreement to sell, which could be specifically enforced. Both the Courts below have found against the contention of the defendants that it was only a usufructuary mortgage and their decision on this point is undoubtedly correct on the facts of the case. In this Court, in addition to the contention that the agreement in question is only a usufructuary mortgage, the appellants have also raised the question that the deed of agreement is really a sale deed and therefore, it cannot be specifically enforced, though this point has not been raised in the memorandum of appeal. As I have already pointed out, the conclusion of the courts below that the agreement is not a usufructuary mortgage is quite correct. The other contention put forward in this Court is in a sense really contradictory of the stand taken by the defendants in the Courts below. I shall, however, deal with it.
(2.)THE agreement Ex. A-1 states that the defendants have agreed to sell the properties, that they have also received the sum of Rs. 5281 in full, towards the sale price, that on that date itself they handed over possession of the properties mentioned in the schedule attached to that letter, that the plaintiff, should take possession of the properties absolutely and enjoy the same, and that whenever he demands the execution of a regular document of sale, on that day, at his own expense, the defendant should execute and register a document of sale in plaintiffs favour. The contention of the defendants, as I have already mentioned, is that this amounts to a document of sale I do not think that is correct. The document does not contain any words of conveyance. It does not say that the executants of that document were selling their properties. It only says that they had agreed to sell. The mere fact that the document mentions that the executants have received the sale consideration or that possession has been handed over to the plaintiff does not mean that it can be interpreted as a deed of conveyance. Apart from that, there is also a specific agreement contained in that document by which the executants have agreed to execute a document of conveyance whenever the plaintiff wanted. That agreement itself could be specifically enforced. Therefore, the argument on behalf of the defendants, that this being a document of sale and being unregistered a decree for specific performance based on it cannot be granted cannot be accepted. This itself is enough to dispose of the contention of the appellants. But, however, I shall deal with the question even on this basis that it amounts to a document of sale.
(3.)THE first decision on which reliance was placed is one in J. R. Skinner v. R. H. Skinner, AIR 1929 PC 269. It was held there that an agreement for the sale of immoveable property is a transaction 'affecting' the property within the meaning of section 49 of the Registration Act, inasmuch as, if carried out, it will bring about a change of ownership; and to allow a document which does itself create such an interest to be used as the foundation of a suit for specific performance is an evasion of the Registration Act. In that case, the document stated that the vendor confirmed it to be a complete and conclusive sale and that by virtue of that sale and agreement if the vendee considers necessary, the vendor would always be ready to execute and register a power of attorney or give the vendee any other document of help, the vendee may demand. Unlike the document in that case, the document in the present case is merely an agreement to sell and does not mention that it is a sale. That apart, both the Registration Act as well as the Transfer of property Act were amended subsequently in order to nullify the effect of this decision of the Privy Council. The effect of the amendment was summed up as follows in the Full Bench decision of this Court in Subramanian Chettiar v. Arunachalam Chettiar, 1943-2 Mad LJ 424 at p. 426 = (AIR 1943 Mad 761 at p. 762) (FB):
"section 49 of the Registration Act states that no document required by section 17 or by any provision of the Transfer of Property Act, 1882, to be registered shall affect immoveable property comprised therein or be received as evidence of a transaction affecting the property, unless it has been registered but there is a proviso which reads as follows: 'provided that an unregistered document affecting immoveable property and required by this Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act 1877, or as evidence of part performance of a contract for the purpose of Section 53-A of the Transfer of Property Act 1882, or as evidence of any collateral transaction not required to be effected by registered instrument. "

"this proviso was inserted in the section by the Transfer of Property (Amendment) Supplementary Act 1929, as the result of the decision of the Privy Council in AIR 1929 PC 269. The proviso makes it perfectly clear that an unregistered document affecting immovable property may be put in evidence in a suit for specific performance. If the document is put in evidence and embodies the contract between the parties it is sufficient to support the claim. In the judgment in Venkatadri Somappa v. Official Receiver, Bellary, 1938-2 Mad LJ 362 = (AIR 1938 Mad 801), it was said that it is well settled law in this presidency that an unregistered document of a transfer is not of itself sufficient to support a suit for specific performance of an agreement to transfer and stress was laid on the fact that there it was not established that a separate agreement to mortgage was entered into prior to the execution of the mortgage deed in suit. The decisions of this court which preceded the introduction of the proviso to Section 49 no longer have application, and we do not agree that an unregistered instrument affecting immoveable property is not sufficient to support a suit for specific performance. In such a suit, the production of the document and its proof will be sufficient to support the plaintiff's case if it embodies the whole agreement between the parties and there are no other factors to be taken into consideration. The proviso in express terms says that it may be received as evidence of a contract in a suit for specific performance. "
This decision is a complete answer to the defendants' contention. Therefore, the two other decisions relied upon by the appellants in Mopurappa v. Ramaswami gramani, 67 Mad LJ 54 = (AIR 1934 Mad 418) and Ramaswami Chettiar v. Muthiah Chettiar, 71 Mad LJ 641 = (AIR 1937 Mad 22) should be deemed to have been overruled by the decision of the Full Bench. Those decisions themselves though rendered after the amendment of Section 49 of the Registration Act, make no reference to that amendment. Indeed the decision in 67 Mad LJ 54 = (AIR 1934 mad 418) relied upon the decision in Ramjoo Mohamed v. Haridas Mullick, ILR 52 cal 695 = (AIR 1925 Cal 1087) which was rendered before the amendment earlier referred to. In that case the plaintiff entered into an oral agreement granting three years' lease to the defendant, all the details about the tenancy were agreed upon and a draft lease was prepared but no formal document was ever drawn up, and it was held that as the agreement conferred an immediate right on the party to be, from that moment and before the execution of any lease a tenant from a future day, it was an agreement of present demise and not having been registered, the suit for the specific performance of that agreement was not maintainable. The respondent's contention there was that all the details were agreed upon on that date and that the only agreement as regards the future was that a deed in pursuance of that agreement should formally be drawn up. It is difficult to understand why the agreement that a deed in pursuance of that agreement was to be executed in future, should not be specifically enforced. It is true that in that case, there was no formally executed document and therefore, Section 49 of the registration Act does not directly come in. But it is possible to split that agreement into two parts one an agreement of lease and the other, the agreement to execute a formal lease deed and this agreement should be held to be capable of specific performance. In Venkatasubbamma v. Subbiah, 1943-1 Mad LJ 469 = (AIR 1942 mad 716); Abdur Rahman J. made this distinction. A suit for specific performance of a contract to sell certain immoveable properties exceeding Rs. 100 in value, was instituted by the plaintiff. The document read as follows:
"for payment of circar cists and for family necessity, I have borrowed from you Rs. 300. . . . . A. 1. (for this money by the 25th May. I agree to sell the schedule mentioned properties to you and execute the sale deed on a proper stamp and get it registered ). A-2 (If I fail to do so, you should treat this letter itself as a sale deed, get into possession of the properties and enjoy them with rights of gift and sale etc ). This is the letter executed with my consent. "