Prahlad Singh vs M/s Sunrise Inframart Pvt. Ltd & Ors

Neena Bansal Krishna, J.

Regular First Appeal under Section 96 read with Order XLI read with Section 151 of the Code of Civil Procedure, 1908 (CPC) has been filed against the Order dated 11.03.2026 whereby the Suit of the Plaintiff for Declaration/Cancellation and Permanent Injunction in respect of Sale Deed dated 19.02.2016, has been rejected under Order VII Rule 11 CPC.

The Plaintiff/Appellant had filed a Civil Suit No. 440/2021 seeking Declaration/Cancellation of the Sale Deed dated 19.02.2016 in respect of land admeasuring 1 Bigha 1 Biswa 9 Biswansi out of Khasra No. 87/1 Min (0-10-14) and 87/10 Min (0-10-14) situated at Village Alipur, Delhi.

The facts in brief as stated by the Plaintiff are that he was the owner of the suit property, it being the ancestral property inherited by the Plaintiff from his father and he was in physical possession thereof. The Plaintiff who had some relations with the Defendants No. 2 and 3, who are the Directors of Defendant No. 1 Company, had incurred some liability, which was treated as a loan given by them to the Plaintiff. In order to secure the said loan liability, on the request of Defendants No. 2 & 3, Plaintiff executed a Sale Deed dated 19.02.2016 in favour of Defendant No. 1 , which was presented for registration. However, the Plaintiff claimed that neither physical possession of the suit property was handed over, nor was any consideration received by him from any of the Defendants, in respect of the suit property.

The details of the amount as mentioned in the Sale Deed were adjusted outside and in fact, the Plaintiff did not pocket any sale consideration in respect of the suit property from the Defendants.

The Plaintiff further asserted that since the execution of the Sale Deed, certain technical difficulties arose, rendering its registration impossible. Consequently, with the mutual consent of the parties, it was decided that the Sale Deed would not be pressed for registration. Since the registration proceedings were not pursued, the Sub-Registrar, vide Letter dated 23.03.2016, refused to register the Sale Deed.

The Plaintiff further claimed that the Defendants had collected the original Sale Deed from the Office of the Sub-Registrar, pursuant to the Letter dated 23.03.2016. None of the Defendants ever raised any issue in respect of the unregistered Sale Deed.

The Plaintiff came to know on 24.03.2021 that some property dealers were negotiating for the sale of the suit property on the basis of the unregistered Sale Deed dated 19.02.2016. Thereafter, upon questioning those persons, the Plaintiff was informed that they had some Power of Attorney in their favour. Immediately thereafter, the Plaintiff issued a Legal Notice dated 05.04.2021 to the three Defendants by separate Notices at the address given by them in the Registrar of Companies, but all the Notices were returned unserved with the remark that "no such person resides at the given address."

The Notices were again sent to the Defendants at their registered email address, as reflected in the master data of the Registrar of Companies. The Notices were duly served, despite which the Defendants failed to respond.

The Plaintiff's case is that in the first week of September 2021, upon the Defendants claiming to be the registered owners of the suit property, the Plaintiff discovered that the Sale Deed dated 19.02.2016, the registration of which had been refused by the Sub-Registrar vide Letter dated 23.03.2016, had been allowed to be registered on 20.11.2018 (Registration No. 5749, Addl. Book No. 1, Vol. No. 3904, Pages 138–144), without any notice having been issued to the Plaintiff.

The Plaintiff thereupon filed Writ Petition (Civil) No. 12435/2021 before this Court, challenging the registration. During the proceedings, it was apprised by the counsel for the Government of NCT of Delhi that the Deputy Commissioner/Registrar (North) had, in the Appeal No. 609/DM/N/2018/908 filed under Section 72 of the Registration Act by Defendant No. 2 Sh. Bharat Gupta, directed the Sub-Registrar to take a decision after following all legal and codal formalities, vide Order dated 26.10.2018, pursuant to which the Sale Deed was registered. The Writ Petition was disposed of vide Order dated 08.11.2021, with liberty to the Plaintiff to assail the Order dated 26.10.2018, on its own merits.

The Plaintiff accordingly, filed the present Suit seeking Cancellation of the registered Sale Deed dated 19.02.2016, registered on 20.11.2018 as null and void; Declaration that the Order dated 26.10.2018 passed by the Deputy Commissioner/Registrar (North) in Appeal No. 609/DM/N/2018/908 was null and void; and Permanent Injunction for restraining the Defendants from creating third party interest in the suit property.

The Defendants, in the Written Statement, controverted the averments made in the plaint. It was claimed that the Suit was hopelessly barred by limitation as the Plaintiff sought to challenge the Sale Deed dated 19.02.2016, by way of a Suit filed on 01.09.2021. It was further claimed that the Suit was bad for non-joinder of necessary parties, as the suit property already stood sold to the subsequent buyers, information of which had already been conveyed to the Plaintiff.

Moreover, the Defendants claimed that the Plaint did not disclose any cause of action and the Suit was liable to be rejected under Order VII Rule 11 CPC.

It was further claimed that the Sale Deed dated 19.02.2016 had been duly registered in 2018. The Suit of the Plaintiff was based on false and concocted averments. The proceedings under Section 81 of the Delhi Land Reforms Act, 1954 were claimed to have been dropped by the Revenue Assistant, vide Order dated 04.03.2021.

It is further explained that the Sale Deed dated 19.02.2016 was duly executed on 19.02.2016, but the same was kept pending due to the non-issuance of the NOC. The defects were removed and NOC No. 232 dated 09.03.2018 had been obtained, and the Sale Deed was thereafter, registered.

It was denied that the Sale Deed was executed only to secure a loan liability of the Plaintiff. It was further denied that the registration of the Sale Deed was abandoned by the parties and that the Sub-Registrar refused to register the Sale Deed vide Letter dated 23.03.2016. It was further denied that after the refusal of registration of the Sale Deed, the Plaintiff was under a bona fide belief that the original document had been collected by the Defendants from the Office of Sub-Registrar. The Defendants further claimed that the suit property had been sold to Smt. Rekha Jain vide registered Sale Deed dated 25.08.2021.

It was submitted that the Suit of the Plaintiff was liable to be dismissed.

The Application under Order VII Rule 11 CPC was filed by the Defendants/Respondents for rejection of the Suit on the ground that the Sale Deed dated 19.02.2016 was duly registered on 20.11.2018 and there was no cause of action disclosed in the plaint. It was asserted that the relief of Cancellation of Sale Deed dated 19.02.2016 was barred by limitation.

The second ground for seeking rejection was that the Declaration in respect of the Order dated 26.10.2018 passed by the learned Commissioner/Registrar, could not be sought before the Civil Court, as the appropriate Appellate Authority was the Financial Commissioner.

During the pendency of the Suit, the Plaintiff filed an Application under Order I Rule 10 CPC for impleadment of Smt. Rekha Jain as Defendant No. 4. A Notice was served and she appeared on 20.05.2023, but did not appear thereafter. The said Application remained pending and undecided.

On 07.06.2023, Defendants No. 1 to 3 filed an Application under Order VII Rule 11(d) read with Section 151 CPC seeking rejection of the plaint on the ground that the Suit was barred by limitation.

The learned District Judge considered the assertions made in the plaint and concluded that the Plaintiff had admittedly executed the Sale Deed. His claim that the amount mentioned in the Sale Deed was utilized elsewhere, reflected that the Sale Deed had been executed for due consideration. It was also observed that the registration could not be effected and the Letter dated 23.03.2016 was sent by the Sub-Registrar.

However, the copy of the Letter placed on record, did not match the averments in the plaint, as the Letter dated 23.03.2016 recorded that the registration was refused for want of original NOC. Subsequently, on removal of the said defect, the Sale Deed was registered on 20.11.2018. It thus, held that there was no ground for declaring the Sale Deed dated 19.02.2016 as null and void.

The learned District Judge further considered the challenge to the Order dated 26.10.2018. It was noted that an Appeal under Section 72 of the Registration Act had been preferred by Defendant No. 2 Sh. Bharat Gupta (Appeal No. 609/DM/N/2018/908) against the refusal of registration by the Sub-Registrar. The Deputy Commissioner/Registrar, vide Order dated 26.10.2018, noted that the deficiency of the NOC had been removed, set aside the Order dated 23.03.2016, and remanded the matter to the Sub-Registrar with a direction to take a decision after following all legal and codal formalities. The Sale Deed was thereafter, registered on 20.11.2018.

The learned District Judge also referred to Section 73 of the Registration Act, 1908, which provides that in case any person by whom the Sale Deed is purported to be executed, denies such execution before the Sub-Registrar, the procedure for inquiry is envisaged under Section 74 of the Registration Act.

The Appeal against the refusal of registration was filed under Section 72 and not under Section 73 of the Registration Act, which also fortifies that the execution of the Sale Deed was never in dispute. Hence, it was held that the Plaintiff did not disclose any cause of action, and the Suit was rejected.

Aggrieved by the rejection thereof, the Plaintiff/Appellant has filed the present Appeal.

The grounds for challenge are that the registration of the Sale Deed has been done in violation of the provisions of the Registration Act, 1908. Section 71(2) of the Registration Act contemplates that no Registering Officer shall accept a document for registration, until and unless the document is directed to be registered.

The Appellate Authority directed the Sub-Registrar to act in accordance with law and therefore, it was the duty of the Sub-Registrar to comply with Section 72(2) of the Indian Registration Act. Section 72(2) provides the procedure prescribed in Sections 58, 59 and 60 to be followed by the Sub-Registrar while registering the document, after the direction had come from the Appellate Authority. The Sub-Registrar, without noticing that no NOC had been issued by the Department, did he follow the provisions under Sections 58, 59 and 60, but allowed the Sale Deed dated 19.02.2016 to be registered on 20.11.2018.

It is asserted that the bare perusal of the registered Sale Deed reflects that no endorsement has been made by the Sub-Registrar, as provided under Section 58 of the Registration Act because the vendor, i.e., the Appellant, was not called while registering the Sale Deed. The signatures of the person admitting the execution of the document, admission of receipt of consideration made in his presence, and also the opportunity of denying the execution of the document as provided under Section 58 of the Registration Act, have not been followed.

Furthermore, Section 52 of the Registration Act provides for affixation of the photographs and fingerprints to be endorsed on every such document at the time of presentation for registration. However, the registration has been done on 20.11.2018 without following the provisions of Section 52 of the Registration Act. Therefore, it is alleged that the registration is not sustainable and needs to be declared as null and void.

The Order dated 26.10.2018 of the Deputy Commissioner/Registrar directing the Sub-Registrar to consider the registration after complying with legal and codal formalities, is also unsustainable because it was passed on the sole submission of the Defendants that the deficiency of the NOC, had been cured. The Appellate Authority did not attempt to verify the details of the NOC, as alleged by the Defendants. Therefore, the impugned Order has been passed without application of mind.

The Sale Deed registered on 20.11.2018 does not contain the particulars of the NOC, which have been left blank, which also shows that the Registrar did not apply his mind.

During the pendency of the Suit, the Defendants stated that the property had already been sold. An Application under Order I Rule 10 CPC was filed, the notice of which was served upon Respondent No. 4-Smt. Rekha Jain. She appeared once on 20.05.2023, but failed to appear thereafter.

The Application under Order VII Rule 11 CPC filed by the Respondents No. 1 to 3 claiming that the Suit was barred by limitation, was not tenable in law.

It is asserted that the Application under Order VII Rule 11 CPC has not been decided on the grounds taken in the Application, but by the Court on its own. Furthermore, the defence taken by the Respondents could not have been considered while deciding the Application under Order VII Rule 11 CPC; the documents filed by the Respondents along with the Written Statement could not have been considered.

The judgments relied upon by the learned District Judge, are not applicable to the facts of the case. It has not been appreciated that there was no sale consideration, as it has been specifically pleaded by the Plaintiff that the amount so mentioned in the Sale Deed was utilized elsewhere.

The learned District Judge observed that the Respondents could file a Suit for recovery, and that, to recover the loan amount, execution of the Sale Deed would not come in any way. It is asserted that the intention of the Plaintiff was not to sell the land towards repayment of the loan amount and this contention has been wrongly understood by the learned District Judge.

It has also not been rightly understood that the Respondents filed the Appeal before the Registrar against the Order dated 23.03.2016 in May 2018, which was totally barred by time and could not have been entertained by the Registrar, as the same is not tenable in law, since the Order dated 23.03.2016 passed by the Sub-Registrar had clearly directed the Respondents that if they were aggrieved by the Order dated 23.03.2016, they could file an Appeal within the stipulated time.

The learned Trial Court has entered into the merits while deciding the Application under Order VII Rule 11 CPC, which could not have been done. In the present case, the title to the suit property had not passed because neither possession was handed over nor had the Sale Deed been registered. On the basis of an unregistered document, the title to the property cannot be transferred as it is a well-settled principle of law.

The facts have been wrongly interpreted by the learned District Judge in observing that the Appellant had appeared before the Sub-Registrar, while presenting the Sale Deed on 19.02.2016. It has not been appreciated that both the parties had mutually decided not to proceed with the registration of the Sale Deed dated 19.02.2016. The Letter dated 23.03.2016 has been erroneously interpreted.

It was clearly stated in the plaint that the Sub-Registrar had refused to register the Sale Deed, vide Order dated 23.03.2016. The Letter dated 23.03.2016 has been wrongly interpreted by asserting that it was only for want of the NOC, that the registration was denied.

At the time of execution of the Sale Deed dated 19.02.2016, the property vested in the Gaon Sabha, as per Section 81 of the DLR Act and for that reason, the NOC could not be issued for the sale of the suit property. It has been wrongly observed that there was clever drafting in the Suit and the facts stated in the plaint were flimsy and vexatious, while rejecting the plaint by holding that it disclosed no cause of action.

The observations given in the impugned Order that it disclosed no cause of action, are erroneous in the light of the specific averments made in the plaint. The intention of the Appellant was that after passing the Order dated 23.03.2016, neither the Registrar nor the Sub-Registrar had given any opportunity to the Appellant to be heard or allowed him to participate in the proceedings before them, while registering the Sale Deed on 20.11.2018.

It is submitted that the learned District Judge has misconceived the facts of the case in hand and had even overlooked the Order passed in Writ Petition (Civil) No. 12435/2021 wherein it was clearly held that if the Petitioner assails the Order dated 26.10.2018 passed by the Registrar (North), the challenge thereto shall be examined on its own merits.

It has not been considered that the Order dated 26.10.2018 of the Deputy Commissioner against the Order dated 23.03.2016 clearly shows that the specific directions given to the Sub-Registrar to follow the legal and codal formalities, have not been complied with. The registration has been effected without granting any opportunity to the Appellant.

Moreover, there is no compliance with Section 71(2) of the Registration Act. It is, therefore, submitted that the impugned Order be set aside and the Suit be restored for adjudication on merits.

Submissions heard and record perused.

It is the case of the Plaintiff himself that there were some transactions and that some liability was incurred, which was treated as a loan by Defendants No. 2 and 3, to have been advanced to the Plaintiff. In order to secure this loan, Defendants No. 2 and 3 requested the Plaintiff to execute the Sale Deed, which was executed on 19.02.2016. Further, according to the Plaintiff, neither physical possession of the property was handed over to the Defendants, nor was any consideration received by the Plaintiff from any of the Defendants. The details of the amount as mentioned in the Sale Deed were adjusted outside and in fact, the Plaintiff did not pocket any amount as consideration against the suit property from the Defendants.

These assertions of the Plaintiff himself in the plaint reflect that there was a transaction between the parties and that the Sale Deed was duly executed on 19.02.2016. It is also admitted that there was a consideration as mentioned in the Sale Deed, but the Plaintiff has vaguely claimed that it was adjusted elsewhere.

The learned District Judge thus, rightly observed that the Sale Deed dated 19.02.2016 was duly executed for a valid consideration, as mentioned in the Sale Deed. The oral assertion that the sale consideration was adjusted elsewhere was rightly held to be not tenable.

It is further the case of the Plaintiff that the Sale Deed was presented for registration on 19.02.2016, but it could not be registered. The Plaintiff has placed reliance on the Letter of the Sub-Registrar dated 23.03.2016 to assert that the Sub-Registrar had refused to register the Sale Deed. The learned District Judge reproduced the Letter dated 23.03.2016, which reads as under:

Therefore, from the aforesaid Letter, it is evident that the Sale Deed could not be registered for want of the NOC which had not been produced, despite time being given to the parties.

While the Plaintiff had claimed in the plaint that the parties, with mutual consent, decided that the Sale Deed presented should not be pressed for registration, but there was no such mutual settlement, which is evident from the Letter of the Sub-Registrar dated 23.03.2016, the contents of which have been reproduced above. It was evident from the Letter that the registration could not be effected for want of the NOC. Therefore, once the NOC was made available, the registration was effected, and it could not be said that the registration had been done, without the consent of the Plaintiff.

There was nothing to show, in the light of the aforesaid Letter, that the parties had either mutually agreed not to press for registration or that the Plaintiff was under the impression that the Sale Deed had been taken back by the Defendant.

The learned District Judge has, therefore, rightly held that the plaint did not disclose any cause of action.

The second ground taken by the Appellant is that the Order of the learned Commissioner/Registrar dated 26.10.2018, be declared null and void. It is pertinent to note that the Appeal No. 609/DM/N/2018/908 under Section 72 of the Registration Act against the Order dated 23.03.2016 of the Sub-Registrar, was preferred not by the Plaintiff, but by Defendant No. 2-Sh. Bharat Gupta. In the said Appeal, it was stated on behalf of the Defendant that though initially the registration of the Sale Deed was refused for want of NOC, the said deficiency had since been cured and the NOC had been obtained and forwarded to the Sub-Registrar. It was further stated that despite compliance, the Sub-Registrar had not proceeded with the registration.

The Deputy Commissioner/Registrar/Appellate Authority, in the Order dated 26.10.2018, noted that the registration could not be effected on account of deficiency in the documents, due to non-availability of the NOC. However, since the NOC had since been issued, the deficiency stood removed. The Order dated 23.03.2016 of the Sub-Registrar was accordingly, set aside and the matter was remanded to the Sub-Registrar to consider the Application and take a decision after following all legal and codal formalities.

It is thus, evident that the registration of the Sale Deed was effected pursuant to the Order dated 26.10.2018 passed by the Appellate Authority in the Appeal preferred by the Defendant, directing registration upon completion of codal formalities after the NOC had been obtained.

The question, therefore, is whether the Plaintiff has disclosed a cause of action in seeking Declaration that the Order dated 26.10.2018 and the consequent registration are null and void. However, since the execution of the Sale Deed was never denied by the Plaintiff, and the refusal of registration by the Sub-Registrar was solely on the ground of want of NOC, which was subsequently obtained, there was no ground for declaring the registration as null and void.

The other significant fact reflecting no grievance or withdrawl of his consent is that the Appeal had been filed by the buyer under Section 72 of the Registration Act and not under Section 73 of the Registration Act which provides “that any person by whom it purports to be executed, or his representative or assign, denies its execution, any person claiming under such document, or his representative, assign or agent authorised as aforesaid, may, within thirty days after the making of the order of refusal, apply to the Registrar to whom such Sub-Registrar is subordinate in order to establish his right to have the document registered”. Had the Plaintiff withdrawn his consent or was not agreeable to the execution of the Sale Deed, he had the option to invoke S.73 to challenge the Sale Deed. However, the Plaintiff did not move any Application under S.73, indicating that he had not withdrawn his consent at any time.

This also answers the compliance of Sections 58, 59 and 60 Registration Act, which was done at the time of initial presentation of the Sale Deed.

The Plaint has thus, been rightly rejected. There is no infirmity in the impugned judgment of the learned District Judge.

Thereby the Appeal is accordingly, dismissed along with the pending Applications.