Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4422 OF 2002

Janak Dulari Devi & Anr. … Appellants

Vs.

Kapildeo Rai & Anr. … Respondents

JU D G M E N T

R.V.RAVEENDRAN, J.

Plaintiffs  in  a  suit  for  specific  performance,  aggrieved  by  the  

judgment and decree of the Patna High Court dated 3.1.2002 dismissing his  

second  appeal  against  the  decision  of  the  first  appellate  court  

dated  16.12.1997  dismissing  their  suit  (in  reversal  of  the  judgment  and  

decree of the trial court dated 27.8.1990 decreeing the suit) have filed this  

appeal by special leave.  

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2. The case of the appellants in brief is as under : The second respondent  

was the owner of the suit property. The second respondent executed a sale  

deed dated 22.2.1988 (registered on 7.3.1988) in respect of the suit property  

in favour of the appellants, for a consideration of Rs.22000/-; that  Rs.17,000  

was paid by the appellants to the second respondent, at the time of execution  

and registration of sale deed; that the balance of Rs.5000 was to be paid  

subsequently,  when  the  vendor  requested  for  the  said  payment;  that  the  

second respondent retained the registration receipt in regard to the sale deed,  

agreeing to deliver it to the appellants against payment of the balance sale  

consideration; that  on execution of the sale deed, by the second respondent,  

his right, title and interest in the suit property passed to the appellants and  

possession of the land sold was also delivered to them; that subsequently the  

second respondent avoided receiving the balance of Rs.5000 and failed to  

deliver  the  registration  receipt;  that  the  appellants  issued  a  legal  notice  

calling upon the second respondent to deliver the registration receipt so that  

they  could  collect  the  original  registered  sale  deed,  but  the  second  

respondent send a reply denying the receipt of Rs.17000 and stating that the  

entire consideration was due; and that therefore, it became necessary for the  

appellants to file the suit. The appellants sought a decree for a direction to  

the second respondent to deliver the registration receipt relating to the sale  

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deed dated 22.2.1988 by receiving the balance sale consideration of Rs.5000  

and that in case the second respondent had already obtained the original sale  

deed from the office of the Sub-Registrar, then for a direction to deliver the  

same to the appellant. The said suit was valued at Rs.5000.

3. The second respondent filed his written statement. He alleged that he  

had  agreed  to  sell  the  property  as  he  urgently  required  the  money  for  

celebrating the marriage of his daughter; that he executed and registered the  

sale  deed  on  22.2.1988;  that  the  appellant  did  not  pay  any  part  of  the  

consideration and the allegation that he had paid Rs.17000 towards the sale  

price at the time of execution of sale deed was false; that the appellants had  

played a fraud upon him by stating in the deed that Rs.17000 was already  

paid towards the sale price and making him to sign the sale deed without  

reading the deed; that when he demanded the sale price, as the appellants  

stated  that  the  sale  consideration  would  be  paid  later,  he  retained  the  

registration receipt and did not deliver possession; that it was the intention of  

parties that title in the property should pass to the appellants and possession  

should be delivered, only on payment of the consideration of Rs.22000 by  

the appellants; that as the appellants failed to pay the sale consideration, he  

cancelled  the  said  sale  deed  dated  22.2.1988  on  18.3.1988  and  sold  the  

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property to the first respondent on 29.8.1988 for a consideration of Rs.19000  

and also delivered possession of the property to the first respondent and ever  

since  then  the  first  respondent  is  in  possession  of  the  suit  property.  He  

contended  that  as  the  title  and possession  remained with  him even  after  

execution and registration of the sale deed in favour of the appellants, and as  

the sale price was not paid, he was justified in canceling/rescinding the sale  

and the appellants were not entitled to any relief.  

4. The  subsequent  purchaser  (first  respondent  herein)  was  thereafter  

impleaded as the second defendant in the suit. The court framed appropriate  

issues  as  to  whether  a  sale  deed   executed  on  22.2.1988  was  for  

consideration; whether Rs.17000 was paid by the appellants towards the sale  

price at the time of execution of the sale deed; whether the appellants had  

tendered the balance of Rs.5000 to the second respondent; whether the sale  

deed was cancelled on 18.3.1988; whether the second respondent had any  

right to execute a sale deed dated 29.8.1988 in favour of the first respondent;  

whether the appellants were entitled to receive the original sale deed dated  

22.2.1988; whether the suit as framed was maintainable and appellants had  

valid  cause  of  action  for  the  suit;  and  whether  the  suit  was  barred  by  

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limitation.  The  appellant  examined  seven  witnesses  and  the  defendant  

examined six witnesses. Both sides marked several documents.  

5. The trial  court  by  judgment  dated  27.8.1990 decreed  the  suit  with  

costs subject to payment of court fee by the appellants, on Rs.22000.  The  

trial court held that the appellants had proved the payment of part sale price  

of Rs.17000 to second respondent; that on the execution of the sale deed by  

the second respondent, title passed to the appellants and the appellants were  

entitled to declaration of title and recovery of possession. Feeling aggrieved  

the first respondent filed an appeal. The first appellate court, by judgment  

and decree dated 16.12.1997, allowed the appeal and dismissed the suit. It  

held that the plaintiffs/appellants had failed to prove payment of Rs.17000 or  

of any part of the consideration; that as no part of the sale price was paid and  

as  the  Registration  Receipt  and  possession  were  retained  by  the  second  

respondent,  the  intention  of  parties  was  that  title  should  not  pass  to  the  

appellants  until  payment  was  made;  and  that  as  a  consequence  of  non-

payment of the price, the second respondent was justified in cancelling the  

sale deed and selling the property to the first respondent. The second appeal  

filed by the appellant, was dismissed by the High Court by the impugned  

judgment dated 3.1.2002, affirming the finding of facts recorded by the first  

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appellate court. The said judgment is challenged in this appeal by special  

leave.   

6. On  the  contentions  urged,  the  following  questions  arise  for  

consideration in this appeal :

(i) Whether  the  appellants  had  paid  Rs.17000/-  towards  sale  price  to  second respondent?

(ii) Whether title to the property passed to the appellants on execution of  the sale deed?

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

(iv) Whether the appellants are entitled to the relief claimed in the suit?

Re: Question (i)

7. In the plaint, the specific plea of the plaintiffs-appellants in regard to  

payment of Rs.17000 was that it was initially agreed that the consideration  

would not be paid at the time of execution and registration of the sale deed,  

but would be paid later, against exchange with the Registration Receipt; that  

the  appellants  paid  Rs.17000  to  the  second  respondent  at  the  time  of  

registration of the sale deed; and that though the appellants were ready to  

pay the balance of Rs.5000, the second respondent stated that he would take  

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the said amount when he needed it in exchange of the registration receipt.  

But the evidence led by the appellants was contrary to the pleadings. PW3  

(the attesting witness to the sale deed), PW4, PW6 (first plaintiff) and PW7  

(husband of the first plaintiff) deposed that a sum of Rs.17,000 was paid to  

the defendant at the residence of the first plaintiff, that thereafter they went  

to the Sub-Registrar’s office at Arrah and got the sale deed written by the  

scribe - PW5, and that thereafter, the second respondent executed the sale  

deed and got it registered. The sale deed dated 22.7.1988 also recited that  

Rs.17000 was received by the vendor prior to the execution of the sale deed  

and  the  balance  of  Rs.5000  was  to  be  paid  at  the  time  of  transfer  of  

Registration Receipt. The first appellate court after analyzing the evidence  

held that the evidence was contrary to the pleadings and therefore liable to  

be rejected. When what is pleaded is not proved, or what is stated in the  

evidence is contrary to the pleadings, the dictum that no amount of evidence,  

contrary to the pleadings, howsoever cogent, can be relied on, would apply.  

The first appellate court also found that there was no endorsement in the sale  

deed by the Sub-Registrar about payment of Rs.17000 in his presence, nor  

any separate receipt existed to show the payment of Rs.17000 prior to the  

preparation  and the  execution  of  the  sale  deed.  The  first  appellate  court  

believed the evidence of DW1 (attesting witness to the sale deed) and DW4  

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(the second respondent) that they did not go to the residence of the first  

appellant on 22.2.1988, but had gone directly to the Sub-Registrar’s office;  

that  by  then  the  sale  deed  had  already  been  got  written  by  the  first  

appellant’s husband; that the sale deed was not read over to them; that the  

second  respondent  was  informed  that  the  sale  price  would  be  paid  

subsequently at the village and that sale could be completed and possession  

be delivered on payment and exchange of the Registration Receipt. The first  

appellate  court  also noted that  the appellants  alleged that  there were two  

independent  witnesses  present  at  the  relevant  time,  namely  Dharmanand  

Pandey and Bindeshwar Pandey, but neither of them was examined. The first  

appellate court also referred to the recitals in the sale deed and the manner of  

the  execution  of  the  sale  deed  and  concluded  that  no  part  of  the  sale  

consideration  had  been  paid.  This  finding  of  fact  recorded  by  the  first  

appellate  court,  that  the  appellants  had  not  established  the  payment  of  

Rs.17000, after consideration of the entire evidence, affirmed by the High  

Court in second appeal, does not call for interference, in an appeal under  

Article  136  of  the  Constitution  in  the  absence  of  any  valid  ground  for  

interference.         

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Re: Questions (ii) and (iii)

8. Where the intention of the parties is that passing of title would depend  

upon the passing of consideration, evidence is admissible for the purpose of  

contradicting  the  recital  in  the  deed  acknowledging  the  receipt  of  

consideration. In  Bishundeo Narain Rai vs. Anmol Devi & Ors. [1998 (7)  

SCC 498], this Court had occasion to consider the question as to when the  

ownership and title in a property will pass to the transferee, under a deed of  

conveyance. This Court observed :

“Section 8 of the Transfer of Property Act declares that on a transfer of  property all the interests which the transferor has or is having at that time,  capable of passing in the property and in the legal incidence thereof, pass  on such a transfer unless a different intention is expressed or necessarily  implied. A combined reading of Section 8 and Section 54 of the Transfer  of Property Act suggests that though on execution and registration of a  sale  deed,  the  ownership  and  all  interests  in  the  property  pass  to  the  transferee,  yet  that  would be on terms and conditions embodied in the  deed indicating the intention of the parties. It follows that on execution  and registration of a sale deed, the ownership title and all interests in the  property  pass  to  the  purchaser  unless  a  different  intention  is  either  expressed  or  necessarily  implied  which  has  to  be  proved by the  party  asserting that title has not passed on registration of the sale deed. Such  intention  can  be  gathered  by  intrinsic  evidence,  namely,  from  the  averments  in  the  sale  deed  itself  or  by  other  attending  circumstances  subject,  of course, to the provisions of Section 92 of the Evidence Act,  1872.”

9. In Kaliaperumal vs. Rajagopal & Anr. [2009 (4) SCC 193], this Court  

again considered the issue and held:

“It  is  now well  settled  that  payment  of  entire  price  is  not  a  condition  precedent for completion of the sale by passing of title, as Section 54 of  Transfer of Property Act, 1882 (“the Act”, for short) defines ‘sale’ as a  transfer of ownership in exchange for a price paid or promised or part paid  and part promised. If the intention of parties was that title should pass on  

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execution and registration, title would pass to the purchaser even if the  sale price or part thereof is not paid. In the event of non-payment of price  (or balance price as the case may be) thereafter, the remedy of the vendor  is  only  to  sue  for  the  balance  price.  He  cannot  avoid  the  sale.  He is,  however, entitled to a charge upon the property for the unpaid part of the  sale price where the ownership of the property has passed to the buyer  before payment of the entire price, under Section 55(4)(b) of the Act.  

Normally, ownership and title to the property will pass to the purchaser on  registration of the sale deed with effect from the date of execution of the  sale deed. But this is not an invariable rule, as the true test of passing of  property  is  the  intention  of  parties.  Though  registration  is  prima  facie  proof of an intention to transfer the property, it is not proof of operative  transfer if payment of consideration (price) is a condition precedent for  passing of the property.  

The answer to the question whether the parties intended that transfer of the  ownership should be merely by execution and registration of the deed or  whether they intended the transfer of the property to take place, only after  receipt of the entire consideration, would depend on the intention of the  parties. Such intention is primarily to be gathered and determined from the  recitals of the sale deed. When the recitals are insufficient or’ ambiguous  the surrounding circumstances and conduct of parties can be looked into  for  ascertaining  the  intention,  subject  to  the  limitations  placed  by  section 92 of Evidence Act.  x x x x  There is yet another circumstance to  show that  title  was  intended  to  pass  only  after  payment  of  full  price.  Though the sale deed recites that the purchaser is entitled to hold, possess  and  enjoy  the  scheduled  properties  from  the  date  of  sale,  neither  the  possession  of  the  properties  nor  the  title  deeds  were  delivered  to  the  purchaser  either  on  the  date  of  sale  or  thereafter.  It  is  admitted  that  possession of the suit properties purported to have been sold under the sale  deed was never delivered to the appellant and continued to be with the  respondents.  In  fact,  the  appellant,  therefore,  sought  a  decree  for  possession of the suit properties from the respondents with mesne profits.  If  really the intention of the parties  was that  the title  to  the properties  should pass to the appellant on execution of the deed and its registration,  the  possession  of  the suit  properties  would have been delivered  to  the  appellant.”

10. Where the sale deed recites that on receipt of the total consideration  

by the vendor, the property was conveyed and possession was delivered, the  

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clear intention is that title would pass and possession would be delivered  

only on payment of the entire sale consideration. Therefore, where the sale  

deed  recited  that  on  receipt  of  entire  consideration,  the  vendor  was  

conveying the property, but the purchaser admits that he has not paid the  

entire consideration (or if the vendor proves that the entire sale consideration  

was not paid to him, title in the property would not pass to the purchaser.   

11. At this stage, we may refer to the practice prevalent in Bihar known as  

‘ta khubzul badlain’ (that is, title to the property passing to the purchaser  

only when there is “exchange of equivalents”). As per this practice, where a  

sale deed recites that entire sale consideration has been paid and possession  

has been delivered, but the Registration Receipt is retained by the vendor  

and possession of the property is also retained by the vendor, as the agreed  

consideration (either full or a part) is not received, irrespective of the recitals  

in the sale deed, the title would not pass to the purchaser, till payment of the  

entire consideration to the vendor and the Registration Receipt is obtained  

by the purchaser in exchange. In such cases, on the sale deed being executed  

and registered, the registration receipt (which is issued by the Sub-Registrar)  

authorizing  the  holder  thereof  to  receive  the  registered  sale  deed  on  

completion of the registration formalities,  is  received and retained by the  

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vendor  and  is  not  given  to  the  purchaser.  The  vendor  who  holds  the  

Registration receipt will either receive the registered document and keep the  

original sale deed in his custody or may keep the registration receipt without  

exchanging  it  for  the  registered  document  from  the  sub-Registrar,  till  

payment of consideration is made. When the purchaser pays the price (that is  

the whole price or part that is due) on or before the agreed date, he receives  

in exchange, the registration receipt from the vendor entitling him to receive  

the original registered sale deed, as also the possession. If the payment is not  

made as agreed, the vendor could repudiate the sale and refuse to deliver the  

registration receipt/registered document, as the case may be, which is in his  

custody, and proceed to deal with the property as he deems fit, by ignoring  

the rescinded sale. The prevalence of this practice in Bihar is noticed and  

recognized  in  several  reported  decisions  -  the  decision  of  this  Court  in  

Bishundeo Narain Rai (supra) and the decisions of the Patna High Court in  

Sarjug Saran Singh vs. Ramcharitar Singh (1968 BLJR 74), Shiva Narayan  

Sah vs. Baidya Nath Prasad Tiwary (AIR 1973 Patna 386), Baldeo Singh vs.   

Dwarika  Singh (AIR  1978  Patna  97),  which  explain  the  practice  of  ta  

khubzul badlain,  after relying upon the principles laid down in the earlier  

decisions of that court in   Md. Murtaza Hussain vs. Abdul Rahman (AIR  

1949 Pat. 364), Motilal Sahu vs. Ugrah Narain Sahu (AIR 1950 Patna 288),  

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and Panchoo Sahu v. Janki Mandar (AIR 1952 Pat. 263),

11.1) In Bishundeo Narain Rai (supra), this Court held :

“It  appears that  in  the State of Bihar  a practice  is  prevalent  that  when  whole  or  part  of  sale  consideration  is  due  or  any  other  obligation  is  undertaken by the vendee, then on execution and registration of the sale  deed by the vendor,  title to the property, subject matter of sale, does not   pass 'ta Khubzul Badlain',  that is, until there is 'exchange of equivalent'  and in such a case registration receipt is retained by the vendor, which on  payment of consideration due or on fulfillment of the obligation by the  vendee  is  endorsed  in  his  favour  or  if  the  sale  deed  has  already been  received by the vendor then the sale deed is delivered to the vendee. Even  so, this only shows that such agreement are common in that part of the  country but it is essentially a matter of intention of the parties which has to  be gathered from the document itself but if the document is ambiguous  then from the attending circumstances, subject to the provisions of Section  92 of the Evidence Act.”

(emphasis supplied)

11.2) In  Sarjug Saran Singh (supra) after referring to the recitals in a sale  

deed that  the  vendor  had delivered  possession to  the  vendee  as  absolute  

owner, it was observed :

“It was admitted by the plaintiffs themselves that the aforesaid recital is  incorrect, both as regards the receipt of the consideration money and as  regards putting the vendee in possession of the property. The registration  receipt remained with the executants, namely, defendants 1 and 2, and the  plaintiffs alleged that on a subsequent date, when they offered to pay the  consideration money and to take the registration receipt from defendants 1  and  2  (Ta  kalzul  badlain exchange  of  equivalents),  they,  under  the  instigation of the other defendants refused to part with the receipt and sold  the property to the other defendants.”

The  Patna  High  Court  in  that  decision,  upheld  the  decision  of  the  first  

appellate court that the intention of the parties was that title should pass only  

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on payment of the consideration and as admittedly the consideration was not  

paid,  the plaintiffs  did not  obtain title  by virtue of  the sale  deed,  on the  

following reasoning:

“It is well settled that the intention of the parties should be ascertained on  a construction of a document; and where there is any patent ambiguity in  any recital, aid may be taken from evidence of surrounding circumstances  and the conduct of the parties. Mr. Rai for the appellants urged that the  first sentence in the recital (quoted above) was complete in itself and that  sentence indicated the clear intention of the parties that title should pass at  the time of the registration when the executants admitted execution before  the Sub-registrar. He specially relied on the words "without any right of  cancellation  and  revocation"  occurring  in  that  sentence.  But  it  is  well  known that in construing a document due weight should be given to all the  recitals. Hence the subsequent recitals as regards payment of consideration  at  the  time  of  exchange  of  equivalents  and  putting  the  vendee  into  possession should also be given equal  weight.   x x x x x    The first  appellate court was, therefore, justified in observing that, if the intention  was that the title should pass at the time of registration, the vendors would  have  insisted  on  payment  of  the  consideration  money  before  the  Sub- registrar,  or  immediately  thereafter.  The very  fact  that  the  registration   receipt was kept in their custody and not handed over to the vendee and   possession also admittedly remained with them lead to an inference that   there  was  no  intention  to  convey  title  until  the  payment  of  the   consideration.”

(emphasis supplied)

11.3) In  Shiva Narayan Sah (supra),  the Patna High Court,  following its  

earlier decisions, held that when the sale deed stipulates payment of balance  

price  during the  exchange of  equivalents (balance  sale  consideration  and  

registration  receipt)  and mentions  only  “putting the  buyer  in  possession”  

without  actually  delivering  possession,  even  if  the  sale  deed  does  not  

expressly postpone passing of the title till discharge of the consideration due  

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and even if more than three fourth of the total price had been paid to the  

vendor, the title in the property would not pass to the purchaser on execution  

and the registration of the sale deed, but will pass only during the exchange  

of the equivalents.

11.4) In  Baldeo Singh  (supra), the sale deed recited that the consideration  

money  had  been  paid  and  nothing  was  due  from  the  vendee  to  whom  

possession had also been delivered. But the plaintiffs admitted that neither  

the consideration money was paid by them nor possession was delivered by  

them  at  the  time  of  execution  and  registration  of  the  sale  deed.  After  

referring to the earlier decisions of that Court the High Court held :

“On the basis  of the aforesaid decision it  can be said that  it  is  almost  settled  that  the  question  whether  title  passes  on  mere  execution  and  registration of a deed or only on payment of consideration depends upon  the intention of the parties, to be gathered from the deed. It has also been  held that though the sale deed may recite that the consideration has been  paid, but there is nothing to prevent the parties from adducing evidence to  show that the recital is untrue and that, in fact, the consideration was not  paid; this will not be barred by Section 92 of the Evidence Act. In the  present case, there is no dispute so far as the second aspect is concerned.  The sale deed in question recites that consideration money has been paid  and there is nothing due from the vendee to whom the possession has also  been  delivered.  But,  the  plaintiffs  admit  that  neither  the  consideration  money  was  paid  nor  possession  delivered  to  them  at  the  time  of  the  execution and registration of the aforesaid deed. …. In my opinion, the  plaintiffs did not acquire title on mere execution and registration of the  sale deed.

“In the instant case, the defendant first set has not taken the stand that he  had  repudiated  the  contract  even  before  10-1-1963  when  the  deed  of  cancellation was executed. If the amount is tendered by the defaulter after  such repudiation, it is of no, consequence. A vendor cannot be expected to   

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wait indefinitely to enable the vendee to perform his part, and he is at   liberty in such a situation to sell the property to another person. In my  opinion, in cases where the tender or payment of the consideration money  is  made  by  the  vendee  before  the  vendor  repudiates  the  contract,  the  vendee will acquire a valid title over the properties covered by the deed in  question.”

      (emphasis supplied)

12. We have  referred  to  several  decisions  of  the  Patna  High  Court  in  

detail to demonstrate the existence of the established practice of exchanging  

equivalents (ta khubzul badlain). The effect of such transactions in Bihar is  

even though the duly executed and registered sale deed may recite that the  

sale consideration has been paid, title has been transferred and possession  

has been delivered to the purchaser, the actual transfer of title and delivery  

of possession is postponed from the time of execution of the sale deed to the  

time of exchange of the registration receipt for the consideration, that is  ta  

khubzul badlain.  

13. We may now examine the facts of this case with reference to the said  

principles. As noticed above the first appellate court has recorded a finding  

of fact that the appellants had not paid the consideration of Rs.22000 at the  

time of  execution  and registration  of  the  sale  deed.  This  finding of  fact  

(accepted  by  the  High  Court  in  second  appeal)  has  been  recorded  after  

exhaustive consideration of the oral evidence and is not open to challenge.  

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The trial court, the first appellate court and the High Court have concurrently  

found that though the sale deed recited that possession of the property was  

delivered to the purchasers,  the possession was not  in fact  delivered and  

continued with  the  vendor  (second respondent)  and he had delivered the  

actual  possession  of  the  property  to  the  first  respondent  when  he  

subsequently, sold the property to the first respondent. Therefore, the recitals  

in the sale  deed dated 22.2.1988, that the vendor had received the entire  

price of Rs.22000/- from the purchasers (that is Rs.17000 before execution  

of the sale deed and Rs.5000 at the time of exchange of registration receipt)  

and had transferred all his rights therein and that on such sale the vendor has  

not retained any title and that the vendor has relinquished and transferred the  

possession of the property to the purchasers, will not be of any assistance to the  

appellants to contend that the title has passed to them or part consideration  

was paid. It is an admitted fact that the registration receipt was retained by  

the vendor to be exchanged later in consideration of the sale price. It is also  

admitted  that  possession  was  not  delivered  though  the  deed  recited  that  

possession  was  delivered.  The  sale  was  categorically  repudiated  by  the  

second respondent on 18.3.1988 by cancelling the sale deed. There is  no  

evidence  that  the  appellants  offered  the  sale  price  of  Rs.22000/-  to  the  

second respondent before the repudiation. The only possible inference is that  

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the  intention  of  the  parties  was  that  title  would  not  pass  until  the  

consideration was not paid; and as the consideration was not paid, the sale in  

favour of the appellants did not come into effect and the title remained with  

the  vendor  and  the  sale  deed  dated  22.2.1988  was  a  dead  letter.  

Consequently,  the  subsequent  sale  in  favour  of  the  first  respondent  was  

valid.   

Re: Question (iv)

14. We are therefore of the view that on execution and registration of the  

sale deed dated 22.2.1988 in favour of appellants, title did not pass to the  

purchaser and possession was not delivered. Therefore as a consequence the  

vendor retained the power of repudiating the sale for non payment of the sale  

price within a reasonable time. As the finding is that no part of the sale price  

was paid, the claim of appellants that they offered to pay Rs.5000/-, even if  

accepted to be true would mean proving their readiness to pay only a part of  

the price and not the entire sale price. As the appellants have failed to prove  

that  they  tendered  the  price  of  Rs.22000/-  before  repudiation  and  

cancellation  on  18.3.1988,  the  sale  deed  dated  22.2.1988  in  favour  of  

appellants did not convey any title to them and after lawful repudiation, they  

were not entitled to claim performance.  

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15. We hasten  to  add that  the  practice  of  ta  khubzul  badlain (of  title  

passing on exchange of equivalent) is prevalent only in Bihar. Normally, the  

recitals in a sale deed about transfer of title,  receipt of consideration and  

delivery of possession will be evidence of such acts and events; and on the  

execution and registration of the sale deed, the sale would be complete even  

if the sale price was not paid, and it will not be possible to cancel the sale  

deed  unilaterally.  The  exception  to  this  rule  is  stated  in  Kaliaperumal  

(supra). The practice of ‘ta khubzul badlain’ in Bihar recognizes that a duly  

executed sale deed will not operate as a transfer in preasenti but postpones  

the actual transfer of title, from the time of execution and registration of the  

deed, to the time of exchange of equivalents that is registration receipt and  

the sale consideration, if the intention of the parties was that title would pass  

only on payment of entire sale consideration. As a result, until and unless the  

duly  executed  and  registered  sale  deed  comes  to  the  possession  of  the  

purchaser, or until the right to receive the original sale deed is secured by the  

purchaser  by  obtaining  the  registration  receipt,  the  deed  of  sale  merely  

remains an agreement to be performed and will not be a completed sale. But  

in States where such a practice is not prevalent, possession of Registration  

Receipt by the Vendor, may not, in the absence of other clear evidence, lead  

to  an inference  that  consideration has not  been paid or  that  title  has not  

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passed to the purchaser as recited in the duly executed deed of conveyance.  

Where the purchaser is from an outstation, the vendor being entrusted with  

the Registration Receipt, to collect the original sale deed and deliver it to the  

purchaser, is common. Be that as it may.  

16. In view of the above, we hold that there is no merit in this appeal and  

the appeal is dismissed.

…………………………….J. (R V Raveendran)

New Delhi; …………………………..J. April 15, 2011. (Markandey Katju)   

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