TMI Blog1991 (6) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... nt possession is restricted only to the portion occupied by the transferor itself. On payment of the second instalment of Rs. 50 lakhs, the transferor has to permit development of the property and grant necessary power of attorney in favour of Shri K. V. Shivakumar, trustee of the transferee. The nomination clause of the agreement states that, on payment of full consideration, the transferor has to execute a sale deed in favour of the transferee or its nominees. The agreement also contemplates payment of liquidated damages and the right of specific performance by the parties to the agreement, in case of breach. The aggrieved party has the option to terminate the agreement and claim and recover liquidated damages of Rs. 15,50,000 being 10% of the consideration from the party committing breach, as an alternative to specific performance. An important stipulation in pages 10 and 11 of the agreement is that, in the event of the schedule property being purchased by the appropriate authority for the Central Government under section 269UD(1) of the Income-tax Act, the agreement of November 28, 1990, for sale of 'Mohan Buildings' between the transferor and the transferee will be treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin one year from the date of the agreement, whichever was earlier. Thus, it will be clear that what the appellant-transferee had paid to the transferor under the terms of the agreement was Rs. 50 lakhs by way of advance. It is the common case before us that the transferor had authorised the Chief Commissioner of Income-tax to pay a sum of Rs. 50 lakhs to the appellant which the transferor had received by way of advance. It is equally the common case before us that this Rs. 50 lakhs paid by the Chief Commissioner of Income-tax was received by the appellant without any demur. The appellant filed W. P. No. 5614 of 1991 praying to quash the order of the appropriate authority dated January 24, 1991, passed under section 269UD(1) of the Act. In that writ petition, an additional prayer was made to direct the respondent to issue a no objection certificate under section 269UL of the Act. The learned single judge, Justice S. R. Rajasekhara Murthy, was of the opinion that, in so far as the appellant before us (the writ petitioner) had received the sum of Rs. 50 lakhs paid by way of advance under the agreement dated November 28, 1990, he had no right to challenge the order of the approp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration does not consent to receive it. Where, therefore, the money was legitimately due to the transferor, the mere fact that the transferee had received the same does not mean that the principle of acquiescence could be applied. Looked at from that point of view, the judgment of the learned judge is incorrect. As a matter of fact, in Writ Appeals Nos. 621 and 622 of 1988, this court has taken a view in favour of the appellant. The same ratio will have to be applied in this case. Mr. Chandra Kumar, learned counsel for the Revenue, who had entered caveat would submit that, first and foremost, a person like the appellant who is no more than the holder of an agreement for the purchase of an immovable property cannot claim any interest in the immovable property. As a matter of fact, section 54 of the Transfer of Property Act puts this matter beyond doubt. It has also been held in Satyabrata Ghose v. Mugneeram Bangur and Co., AIR 1954 SC 44, in paragraph 18, that such a person has a mere right to get a deed of conveyance but, by no stretch of imagination, could it ever be said that the contract of sale of immovable property itself creates any interest in the property. To the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cludes". It is true that the inclusive definition is to be read in an enlarged manner. But, even by so reading, it cannot take in a person like the appellant to whom, under section 269UD, a notice is to be served. Likewise, under section 269UL, he is served, with the copy of the no objection certificate. That is because, under Form No. 37-1, both the transferor and the transferee seek the issue of a no objection certificate under section 269UL. Beyond that, it cannot be said the general law is altered or that the Income-tax Act talks of the transferee differently. In any event, this is case in which the principle of acquiescence must apply squarely. The sale had not been completed. All that the transferee would be entitled to was the repayment of Rs. 50 lakhs paid by way of advance. It is this advance which, when paid, was received without any demur. Under law, no doubt the transferor is entitled to the payment. Where, therefore, the transferee received the benefit consequent to the sale not taking place in accordance with the agreement dated November 28, 1990, he cannot approbate and reprobate. Rightly, therefore, the learned judge had applied this principle. This aspect becomes v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general language which precedes it : to add to the general clause a species which does not naturally belong to it. When the word 'includes' was used in connection with 'income', their Lordships of the Privy Council observed in The King v. The B. C. Fir and Cedar Lumber Co. Ltd., AIR 1932 PC 121, . . . their Lordships cannot doubt that in consequence the word, as used in the statute, includes, unless the context otherwise requires, not only those things which the interpretation clause declares that it shall include, but such things as the word signifies according to its natural import.' The word 'includes' is a word of enlargement rather than of restriction. When it is mentioned that a particular definition 'includes' certain things, it should be taken that the Legislature intended to settle a difference of opinion on the point or wanted to bring in other matters that would not properly come within the ordinary connotation of the word or expression or phrase in question. 'It is well known that the Legislature uses the word "means" where it wants to exhaust the significance of the term defined and the word "includes" where it intends that while the term defined should retain i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the existence of a contract of sale, whether with or without an averment of possession following upon the contract, is not a relevant defence to an action for ejectment in India.' A person who has contracted to buy land is not the owner of any interest in the land and is, therefore, not competent to apply to set aside an execution sale of the same land. Similarly, he is not entitled to mesne profits. It has also been held that even after a decree has been passed in a suit for specific performance, the purchaser has no interest in the property. A contract for sale is, therefore, merely a document creating a right to obtain another document and does not require registration. See Registration Act, section 17(2)(v) and Mulla's Registration Act. Even before the enactment of the Transfer of Property Act, the proceedings of the Legislature, when enacting the Registration Act of 1877, show that the Legislature did not regard an agreement for sale as itself creating an interest in land. This was explained by Birdwood J., in Chunilal Panalal v. Bomanji Mancherji Modi [1883] ILR 7 Bom 310, where an agreement for sale of immovable property was held to be exempt from registration even thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ph 6, this position has been further elucidated and it reads : "We do not wish to go in any detail into the question whether the English equitable doctrine of conversion of realty into personality is applicable in India. However, we do wish to say that the English doctrine of conversion of realty into personality cannot be bodily lifted from its native English soil and transplanted in statute-bound Indian law. But, we have to notice that many of the principles of English equity have taken statutory form in India and have been incorporated in occasional provisions of various Indian statutes such as the Indian Trusts Act, the Specific Relief Act, Transfer of Property Act, etc., and where a question of interpretation of such equity-based statutory provisions arises, we will be well justified in seeking aid from the equity source. The concept of creation of duality of ownership, legal and equitable, on the execution of an agreement to convey immovable property, as understood in England, is alien to Indian law which recognises one owner, i.e., the legal owner : vide Ram Baran Prasad v. Ram Mohit Hazra [1967] 1 SCR 293 ; AIR 1967 SC 744 and Narandas Karsondas v. S. A. Kamtam [1977] 2 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority may, in lieu of the payment of the amount of consideration, set off the amount of consideration or any part thereof against such liability or sum, after giving an intimation in this behalf to the person entitled to the consideration. (2) Notwithstanding anything contained in sub-section (1), if any dispute arises as to the apportionment of the amount of consideration amongst persons claiming to be entitled thereto, the Central Government shall deposit with the appropriate authority the amount of consideration required to be tendered under sub-section (1) within the period specified therein. (3) Notwithstanding anything contained in sub-section (1), if the person entitled to the amount of consideration does not consent to receive it, or if there is any dispute as to the title to receive the amount of consideration, the Central Government shall deposit with the appropriate authority the amount of consideration required to be tendered under subsection (1) within the period specified therein : Provided that nothing herein contained shall affect the liability of any person who may receive the whole or any part of the amount of consideration for any immovable property vested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property, but not amounting to an interest therein or easement thereon, such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby, but not against a transferee for consideration without notice of the right or obligation nor against such property in his hands. The illustration to section 40 reads thus : 'A contracts to sell Sultanpur to B. While the contract is still in force he sells Sultanpur to C, who has notice of the contract. B may enforce the contract against C to the same extent as against A.' In the case of Ram Baran Prasad v. Ram Mohit, AIR 1967 SC 744, the Supreme Court held that it was manifest that a contract for the sale of immovable property did not create any interest in the immovable property. In Soni Lalji Jetha v. Soni Kalidas Devchand, AIR 1967 SC 978, the Supreme Court came to the conclusion that a contract for sale of immovable property, while it did not create interest in immovable property, created a personal obligation of a fiduciary character which could be enforced by a suit for specific performance not only against the vendor but also against a purchaser for considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to obtain a reconveyance, was also a lessee who owed some arrears. It is true that Venkataswami Naidu is not a party to the present action. But, obviously, upon the facts as stated by me, he would be estopped from claiming that his assignee could not enforce the right to reconveyance of which he took the assignment." The learned single judge, Justice Anantanarayanan, as he then was, was dealing with the assignment of right of reconveyance and, in that context, a question arose as to whether it could cause property capable of assignment. That case does not afford any assistance to the appellant. In CIT v. Tata Services Ltd. [1980] 122 ITR 594, 599, a Division Bench of the Bombay High Court held thus: "What is a capital asset is defined in section 2(14) of the Incometax Act, 1961. Under that provision, a capital asset means property of any kind held by an assessee, whether or not connected with his business or profession. The other sub-clauses which deal with what property is not included in the definition of capital asset are not relevant. Under section 2(47), a transfer in relation to a capital asset is defined as including the sale, exchange or relinquishment of the asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 269UD(2) nor section 269UL(3) could a transferee contend that he has secured an interest in the immovable property contrary to the settled law as adumbrated under section 54 of the Transfer of Property Act and various rulings of the Supreme Court. Thus, we conclude that the appellant has no locus standi. We may also add that merely because section 269UD(2) says "every other person whom the appropriate authority knows to be interested in the property", it does not bring a transferee who has no interest in the property in whose favour no interest is created by reason of the contract for sale. In the result, we hold that a transferee had no locus standi to question the order of the appropriate authority made under section 269UD(1). Now, we pass on to the question of the application of the principle of acquiescence. One of the important terms of the agreement dated November 28, 1990, is 10.3. It reads as under : "In the event of the Schedule Property being acquired under the provisions of Chapter XX-C of the Income-tax Act, 1961, then this agreement shall be treated as cancelled without any of the aforementioned penal consequences and the vendors shall refund the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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