THE HIGH COURT OF DELHI AT NEW DELHI

SUBJECT : CODE OF CIVIL PROCEDURE

I.A. NO.20617/2012 IN CS(OS) 2661/2012
Date of Decision: 01.10.2013

VINOD KUMAR & ANR.

...Plaintiffs
Through: Mr.Rohit Yadav with Mr. Ankit Sibbal, Advocates
Versus
AJIT SINGH
...Defendant
Through: Mr. Rajesh Yadav with Ms. Chandrani Prasad and Mr. Virender
Tarun, Advs.
CORAM:
HONBLE MR. JUSTICE M.L. MEHTA
M.L. MEHTA, J.
1.
Vide this order I propose to dispose of an application filed by the
defendant under Order 7 Rule 11 CPC whereunder the defendant has sought
rejection of plaint on the ground that the agreement to sell dated 05.08.2011,
on the basis of which the suit for specific performance and injunction is
filed, being not registered under Section 17 (1A) of the Registration Act,
1908 and also not being duly stamped as per Article 23A of Schedule 1A of
The Indian Stamp (Delhi Amendment) Act, 2001, was not only not
admissible, but was liable to be impounded under Section 33 of the Indian
Stamp Act, 1899 (for short ISTA)
2.
The plaintiffs have filed this suit of specific performance and
injunction against the defendant on the averments that they had agreed to
purchase the suit premises from the defendant for a total sum of Rs.4.57
crore on 13.07.2011 when a sum of Rs.3.10 crore was paid as advance by
plaintiff No. 1 to the defendant against receipt. Thereafter, a formal
agreement to sell was entered on 05.08.2011, when on this day the balance
consideration amount was also paid by cash as well as four cheques. On this
day, the defendant executed not only agreement to sell, but other documents
such as possession certificate, undertaking, registered General Power of

Attorney and registered Will etc. as well. In addition to all these documents,
the possession of the suit premises was also delivered by the defendant to the
plaintiffs. As per the agreement, the sale deed was to be executed after the
NOC was to be obtained by the defendant from the competent authority. It
is also the plaintiffs case that out of the four cheques, one cheque of
Rs.20.00 lakh dated 05.08.2011 was agreed to be presented by the defendant
at the time of registration of sale deed and not before that, but the defendant
surreptitiously presented the same, which obviously got dishonoured. The
plaintiffs further case is that since the defendant has not executed the sale
deed to transfer the title in the suit premises in their favour and has been
avoiding, they seek relief of specific performance of the agreement dated 5th
August, 2011. They have also sought the relief of injunction restraining the
defendant from interfering in the possession of the suit premises.
3.
The defendant while admitting that aforesaid documents were
executed has averred that the agreement to sell has since been cancelled on
27.12.2011 and the money paid forfeited on account of the breach of the
terms of the agreement by the plaintiffs. The other documents such as
registered General Power of Attorney and Will are also stated to have been
revoked by revocation deeds dated 14.12.2011. It is also defendants case
that the agreement to sell dated 05.08.2011 coupled with the possession of
the suit premises was compulsorily registrable under Section 17 (1A) of the
Registration Act, and in the absence of the same it could not be received in
evidence in a suit of specific performance as per proviso to Section 49 of the
Registration Act. It is the defendants case that the agreement to sell was
required to be stamped as per Article 23A of Schedule 1A of Indian Stamp
(Delhi Amendment) Act, 2001 and as per this provision stamp duty
equivalent to 90 per cent of the duty as conveyance was payable, and further
that in the absence of the same this document was liable to be impounded
under Section 33 of ISTA, and could not be looked into unless the stamp
duty as also the penalty was paid thereon as per provision under Section 35
of ISTA.
4.
In the application under reference all the averments of the written
statement have been reproduced and the rejection of the plaint is sought
under Order 7 Rule 11 CPC alleging that the plaint based on an unregistered
agreement to sell was barred by law as per provisions contained under
Sections 17 (1A) and 49 of Registration Act, 1908 read with Section 53A of
the Transfer of Property Act, 1882 as also Sections 33 and 35 and Article
23A of ISTA.

5.
In support of the averments and submissions made on same lines by
learned counsel for the defendant reliance is placed on the decisions in
ASAS Investment P. Ltd. Vs. Collector of Stamps 2012 AIR (Del) 140;
Avinash Kumar Chauhan Vs. Vijay Krishna Mishra (2009) 2 Supreme Court
Cases 352 and Government of Andhra Pradesh and Others Vs. P. Laxmi
Devi (SMT) (2008) 4 Supreme Court Cases 720.
6.
On the other hand, response of the plaintiff is that for the purpose of
Order 7 Rule 11 CPC, it is only the plaint and the documents which are to be
considered and not the defences. It is submitted that the agreement to sell
was not compulsorily registrable under Section 17(1A) of the Registration
Act, and thus does not come within the mischief of proviso of Section 49
inasmuch as the provisions of Section 53A of the Transfer of Property Act
were not attracted. It is the plaintiffs submission that the agreement to sell
itself does not create any right, title or interest in the immovable property,
and was thus not compulsorily registrable as per Clause (v) of Section 17(2)
of Registration Act. Based on this premise, it is the plaintiffs case that
Article 23A of the Schedule 1A as well as Sections 33 and 35 ISTA were not
applicable. The plaintiffs counsel relies upon the decisions of this Court in
Hyundai Motor India Limited Vs. Opal Metal Engineering Pvt. Ltd. AIR
2009 Delhi 1 and Shri Rakesh Chandok Vs. Smt. Harbans Kaur (I.A. No.
5540/2005 in CS(OS) No. 1281/2004, decided on 30.04.2007) and the
decision of Punjab and Haryana High Court in Sukhwinder Kaur Vs.
Amarjit Singhand others AIR 2012 P&H 97.
7.
As is apparent from the written statement, all the pleas which are
taken in the instant application form part of the defence of the defendant and
were not required to be gone into at the stage of consideration of the
application under Order 7 Rule 11 CPC. Law with regard to consideration
of application under Order 7 Rule 11 CPC is well settled by various judicial
pronouncements. Reference can only be made to the decision of Saleem
Bhai Vs. State of Maharashtra, (2003) 1 SCC 557, wherein, the Supreme
Court in para 9 held as under:
9. A perusal of Order VII Rule 11 C.P.C. makes it clear that the relevant
facts which need to be looked into for deciding an application thereunder are
the averments in the plaint. The trial court can exercise the power under
Order VII Rule 11 C.P.C. at any state of the suit - before registering the
plaint or after issuing summons to the defendant at any time before the
conclusion of the trial. For the purposes of deciding an application under

Clauses (a) and (d) of Rule 11 of Order VII C.P.C., the averments in the
plaint are germane; the pleas taken by the defendant in the written statement
would be wholly irrelevant at that stage, therefore, a direction to file the
written statement without deciding the application under Order VII Rule 11
C.P.C. cannot but be procedural irregularity touching the exercise of
jurisdiction by the trial court.
8.
The execution of documents including agreement to sell as well as the
payment of major part of the consideration amount being not in dispute, the
plaint apparently sets out real cause of action against the defendant entitling
the plaintiffs to maintain the present suit. It is also a settled proposition of
law that at the stage of consideration of Order 7 Rule 11 CPC, the validity or
admissibility of the documents which are relied upon by the plaintiff cannot
be considered, though the court would be entitled to consider the same and
ascertain if a cause of action was disclosed in a plaint. So far as the
admissibility of the documents is concerned, the same would invite
consideration only at the appropriate stage. This is what is the ratio of the
decisions of this Court in Hyundai Motors India Limited (supra) and Shri
Rakesh Chandok (supra).
9.
I need not reproduce the relevant provisions of Sections 17(1A) and
49 of the Registration Act, 53A of Transfer of Property Act and the Indian
Stamp Act which have been referred to above. All these provisions were
considered in detail by Punjab and Haryana High Court in Sukhwinder Kaur
case (supra), wherein similar question, as before this Court, came up for
consideration. In that case also a suit for specific performance was filed
based on unregistered agreement to sell and an application under Order 7
Rule 11 CPC was filed seeking rejection of the plaint on the ground that the
agreement contained recital of possession of the suit premises having been
delivered to the plaintiff, and the agreement being unregistered as per
Section 17(1A) of the Registration Act, could not be relied upon being
unregistered. After reproducing all the above provisions, the learned Judge
held that agreement itself does not create any right, title to the property, but
it is the sale deed, which when executed will create right, title and interest in
the property.
10. In the instant case, the plaintiff has not sought relief based on part
performance under Section 53A of the Transfer of Property Act and that
being so, Section 17(1A) of the Registration Act, which was only meant for
the provisions of Section 53A of the Transfer of Property Act, was not

attracted and thus, the agreement did not require registration. Such an
agreement falls under the mischief of Section 17(2) (v) of the Registration
Act, and it itself does not create, declare, assign, limit or extinguish any
right, title or interest in the property. Rather as held in Sukhwinder Kaur
(supra) it creates a right to obtain another document which will, when
executed, create, declare, assign, limit or extinguish right, title or interest in
the property. Not only this, provisions of Section 49 of the Registration Act
make the position more clear. It envisages that an unregistered document
affecting immovable property and required by this Act and the Transfer of
Property Act to be registered may be received as evidence of a contract in a
suit for specific performance under Chapter II of Specific Relief Act, 1877.
As further held in Sukhwinder Kaur (supra), a conjoint reading of Section
17(2)(v) and proviso of Section 49 of the Act leaves no room for doubt that
agreement to sell property itself does not create any right or title over the
property. It is the sale deed, which when executed will create such right in
the property. Hence, an agreement to sell is not required to be registered and
the same is receivable in evidence in a suit for specific performance under
Chapter-II of the Specific Relief Act, 1877.
11. Now, with regard to the submissions that the agreement was not
properly stamped, as per Article 23A of Schedule 1A of ISTA, I may state
without hesitation that Article 23A also was not attracted inasmuch as it
applies to the contracts for transfer of properties under Section 53A of the
Transfer of Property Act. As noted, the plaintiffs suit is not based on the
part performance under Section 53A of the T.P. Act and the agreement to
sell could not be said to be conveyance in the nature of part performance as
envisaged in Article 23A. As per Section 2(10) of ISTA, conveyance
includes conveyance of sale and other instruments by which property,
whether movable or immovable, is transferred intra-vivous and which is not
otherwise specifically provided for by Schedule-I. By any interpretation,
such an agreement to sell cannot be termed as conveyance as defined in
Section 2(10) of ISTA. That being so, and the agreement to sell in question
not creating any right, title or interest over the suit property, except that of
the cause of action asking for the execution of the sale deed, Article 23A
was not attracted and thus, the provisions of Sections 33 of ISTA is not
attracted. As there is no Article in Schedule-I specifically providing for
agreement to sell of immovable property, it would come within the ambit of
residuary clause (c) of Article 5 of Schedule 1 of ISTA, which is extended to
union territory of Delhi by Delhi Amendment Act of 2001. The stamp duty
as per residuary clause (c) of Article 5 thereof is Rs.50/-. The agreement to

sell in question being on stamp paper of Rs.10/-, is seen to be deficient of

Rs.40/-only and as per Section 35 proviso (a), the same would become
admissible in evidence on payment of penalty equivalent to 10 times of the
deficient portion of the stamp duty. The deficiency being of Rs.40/- only,
the penalty payable comes to Rs.400/- and thus, this penalty and the
deficiency of Rs.40/- i.e. Rs.440/- would be payable by the plaintiff for
seeking admissibility of this agreement. The plaintiff would be required to
do the needful in this regard.
12. Reliance by the defendant on the aforesaid authorities is
misconceived. In the case of ASAS Investment P. Ltd. (supra) the appellant
had purchased the office space vide office buyers agreement and also got
the possession thereof. In the lease that was executed by it with the tenant,
and which was sought to be registered, it had itself stated that it is the sole,
rightful, legal and absolute owner of the said office unit. Though, the Office
Buyers Agreement was not a conveyance in its literal sense, but it had all
the characteristics of conveyance, whereunder not only possession was
taken, but all the rights and interests therein were also transferred by the
builder in favour of the appellant. It was in these circumstances that it was
held that it was a conveyance requiring stamp duty as per Article 23A. In
the case of Avinash Kumar Chauhan (supra) also an unregistered agreement
to sell was sought to be treated as conveyance and it was in those peculiar
facts and circumstances of the case that Sections 33 and 35 of ISTA were
held to be applicable. It is only when such an agreement to sell is sought to
be treated as deemed sale deed or conveyance that Article 23A with
explanation would apply with its full force and that is not the situation in the
instant case. Similarly, the decision of Government of Andhra Pradesh and
Others (supra) which held mandatory impounding of unstamped documents
does not apply to the instant case.
13. In view of my discussion as above, I do not see any merit in the
instant application. The same is hereby dismissed.

Sd/M.L. MEHTA, J.

OCTOBER 01, 2013