PROPERTY LAW II – INTERNAL ASSESMENT III

PROPERTY LAW II – INTERNAL ASSESMENT III

CASE COMMENT ON

SHYAM NARAYAN PRASAD v. KRISHNA PRASAD & ORS.

AIR 2018 SC 3152

SUBMITTED BY:

AAKASH BATRA

PRN – 18010125355

DIVISION – D

IIND YEAR

B.A. LL.B. (HONS.)

 PROPERTY LAW II – INTERNAL ASSESMENT III

Respected sir
With due respect I say that I am Aakash Batra of B.A LL.B (Hons.), Second
Year Div D and I was unable to appear for the Second Internal Assesment for
the Course of Property Law II, which was a written test scheduled on 7 th March
2020.

Sir, on 6th evening I was feeling under the weather and I got high fever coupled
with continuous vomiting throughout the night. I knew that this was probably
because of the fact that I had been ordering food from outside since a few days
as I was not having a cook during that time. Considering the fact that I live
alone in a flat, I was not able to manage that whole situation properly and fell
sick due to which I missed the written text on the next day. When I visited
Apollo clinic the next day (i.e 07/03/2020), Dr. Mukesh Budhwani examined
me and I was diagnosed with a bacterial infection and hyper-acidity in my food
pipe. My condition during that time was really bad and I was feeling weak and
queasy due to which I was not able to come for the test. I am hereby attaching
the prescription and clinical diagnosis provided by the doctor for you to verify.

Thanking you for all your considerations.

Thanks and Warm Regards

Aakash Batra
PRN - 18010125355
PROPERTY LAW II – INTERNAL ASSESMENT III
 PROPERTY LAW II – INTERNAL ASSESMENT III

ABOUT THE CASE

Appellants: Shyam Narayan Prasad vs. Respondent: Krishna Prasad and Ors.1
Decided on: 02.07.2018
Court: In The Supreme Court of India
Hon'ble Judges/Coram: Abhay Manohar Sapre and S. Abdul Nazeer, JJ.

FACT MATRIX

Gopal Ji Prasad is the common male ancestor of the parties. Shyam Narayan
Prasad and Laxmi Prasad are sons of Gopal Ji Prasad. Shyam Prasad is the
appellant before the court in the present case. The respondents are the sons
(Respondent no. 1-3) and grandson (Respondent No. 4) of Laxmi Prasad.
According to the respondents, the family property was partitioned on 30.1.1990
between Gopal Ji Prasad and his five sons, including the appellant Shyam
Narayan Prasad as well as Laxmi Prasad. In the partition Gopal ji had retained
some of the properties for his personal use till his death. Laxmi Prasad got his
share of property along with half portion of existing two-storey RCC building
situated at Singtam Bazar, East Sikkim, wherein presently a liquor shop is being
run. Shyam Narayan Prasad was allotted a shoe shop at Manihari which is run
on a rented premises owned by Gouri Shankar Prasad. He was also allotted
other properties in the partition. However, Laxmi Prasad in collusion with his
brother Shyam Narayan Prasad, executed an agreement dated 30.1.1990
exchanging the liquor shop at Singtam Bazar, East Sikkim with the shoe shop at
Manihar. The respondents had challenged this exchange and contended that
since the property is an ancestral property, they also have a share in the property

1
AIR 2018 SC 3152
 PROPERTY LAW II – INTERNAL ASSESMENT III

and that Laxmi prasad has no legal right to exchange the property and they filed
a suit for declaration of the exchange document dated 30.1.1990 as invalid. In
this particular appeal he has questioned the legality and correctness of the
judgment and decree dated 15.5.2006 passed by the High Court of Sikkim in
RSA No. 1 of 2005.

ISSUES

1. Whether the property in question (given to Laxmi Prasad) retained

the character of coparcenary property and whether the suit is
maintainable or not.

2. Whether the exchange deed is admissible in evidence or not.

RULES

1. The Transfer of Property Act, 1882, Section 118 - “Exchange” defined.

When two persons mutually transfer the ownership of one thing for the
ownership of another..…….
2. The Transfer of Property Act, 1882, Section 53(a) - Part performance.
Where any person contracts to transfer for consideration any immoveable
property by writing signed by him or on his behalf from which the terms
 PROPERTY LAW II – INTERNAL ASSESMENT III

necessary to constitute the transfer can be ascertained with reasonable

certainty………
3. The Registration Act, 1908, Section 49 - Effect of non-registration of
documents required to be registered. No document required by section 17
[or by any provision of the Transfer of Property Act, 1882 (4 of 1882)], to
be registered shall………..
4. The Registration Act, 1908, Section 17(1) - Documents of which
registration is compulsory. (l) The following documents shall be
registered, if the property to which they relate is situate in a district in
which, and if they have been executed on or after the date on
which………..
5. The Indian Evidence Act, 1872, Section 91 - Evidence of terms of
contracts, grants and other dispositions of property reduced to form of
documents. When the terms of a contract, or of a grant, or of any other
disposition of property………

ANALYSIS AND COMMENTS

It was mainly contended by the respondents that the deed of exchange dated
30.1.1990 entered into between Shyam Prasad and Lakshmi Prasad was in
relation to an immovable property and since the said document has not been
registered, it will have no legal effect. Shyam Narayan Prasad, in the written
statement has filed that the suit properties are not ancestral properties and
denied the contention of the respondents that the document dated 30.1.1990 is
not a valid document. It was further contended that the said document has
already been given effect from the date of its execution. Laxmi Prasad filed that
Shyam Narayan Prasad had approached him for exchanging only the business of
liquor shop at Sikkim with that of shoe shop at Gangtok for convenience and
 PROPERTY LAW II – INTERNAL ASSESMENT III

that he had signed the document in good faith believing that the exchange deed
was only for the two businesses, and further, admitted that exchange deed was
made and executed behind the back of the respondents.

On appreciation of the materials on record, the trial court had come to the
conclusion that the property in question is an ancestral property and that the
Plaintiffs (Respondents in the present appeal), being the sons and grandson of
Laxmi Prasad, also have an equal share in the property allotted to him in the
partition. The suit was accordingly decreed. This decree was challenged by
Shyam Narayan Prasad before the District Judge Sub-Division II, Sikkim at
Ganktok and subsequently, the judgment of trial court was set aside. Now, again
a second appeal was filed by the plaintiffs before the Hon’ble High Court and
the High Court set aside the judgment and decree of the District Judge and
restored the judgment and decree of the trial court.

The learned counsel for the Appellant contended that the entire property of
Gopalji was the self-acquired property and he has divided the property amongst
his five sons by a deed of partition dated 1.3.1988. According to the deed of
settlement dated 30.1.1990 between the Appellant and Laxmi Prasad, only the
businesses were transferred and not the buildings. Therefore, the sons and the
grandson of Laxmi Prasad have no right to seek cancellation of the said deed.
There was no exchange of immovable property as contended by the Plaintiffs.
Therefore, the settlement deed did not require registration. The parties had acted
upon the said agreement and in this case, possession of the Appellant is
protected Under Section 53A of the Transfer of Property Act, 1882. On the
other hand, the advocate on behalf of the respondents submitted that the subject
matter of the deed of settlement dated 30.1.1990 is a joint family property and
that the recital of the deed clearly proves that there was a transfer of immovable
 PROPERTY LAW II – INTERNAL ASSESMENT III

property. They further argued that the benefit of Section 53a of the transfer of
property act 1882 cannot be claimed.

Firstly, to answer the first issue at hand, the Hon’ble Supreme court agreed with
the findings of the High Court and held that the properties are ancestral
properties. The property inherited by a male Hindu from his father, father's
father or father's father's father is an ancestral property. The essential feature of
ancestral property, according to Mitakshara Law, is that the sons, grandsons,
and great grandsons of the person who inherits it, acquire an interest and the
rights attached to such property at the moment of their birth. The share which a
coparcener obtains on partition of ancestral property is ancestral property as
regards his male issue. They take an interest in it by birth, whether they are in
existence at the time of partition or are born subsequently. Such share, however,
is ancestral property only as regards his male issue. 2 As regards other relations,
it is separate property, and if the coparcener dies without leaving male issue, it
passes to his heirs by succession.3

The property which had fallen to the share of Lakshmi Prasad, retained the
character of a coparcenary property and the Plaintiffs being his sons and
grandson have a right4 in the said property. Hence, it cannot be said that the suit
filed by the Plaintiffs was not maintainable.

Addressing the second issue at hand, the Court confirmed that the exchange
deed clearly shows that the RCC building i.e the property of Laxmi Prasad is
also a subject matter to the deed of exchange. When two persons mutually
transfer the ownership of one thing for the ownership of another, neither thing
or both things being money only, the transaction is called an "exchange”. 5 Also,
2
C. Krishna Prasad v. C.I.T., Bangalore, 1975 (1) SCC 160
3
Mulla's Principles of Hindu Law, 14 th Ed, Pg. No. 272
4
Rohit Chauhan v. Surinder Singh and Ors. 2013 (9) SCC 419
5
The Transfer of Property Act 1882, Section 118.
 PROPERTY LAW II – INTERNAL ASSESMENT III

the value of the RCC building being the subject matter of the exchange deed
was clearly more than 100 INR and in the case of exchange of property of value
of Rs. 100/- and above, it can be made only by a registered instrument. Section
49 of the Registration Act, 1908 provides for the effect of nonregistration of the
document.6 Any document which has the effect of creating and taking away the
rights in respect of an immovable property must be registered. 7 It was held by
the Hon’ble court that since the deed of exchange had not been registered, it
cannot be taken into account to the extent of the transfer of an immovable
property. If it be not registered, Section 49 of the Act will prevent its being
admitted in evidence.8

Registration of a document gives notice to the world that such a document has
been executed. Registration provides safety and security to transactions relating
to immovable property, even if the document is lost or destroyed. It gives
publicity and public exposure to documents thereby preventing forgeries and
frauds in regard to transactions and execution of documents.

Also, as regarding the benefit of Section 53a of the transfer of property act, the
court held that whosoever intends to avail the benefit of this provision must
plead that he has taken possession of the property in part performance of the
contract. Perusal of the written statement of the first Defendant showed that he
had not raised such a plea. Pleadings are meant to give to each side, intimation
of the case of the other, so that, it may be met to enable courts to determine
what is really at issue between the parties. No relief can be granted to a party
without the pleadings. Therefore, benefit was not made available to the
appellant, under Section 53A of the T.P. Act.

6
Registration Act 1908, Section 49.
7
Registration Act 1908, Section 17(i)(b)
8
Roshan Singh and Ors. v. Zile Singh and Ors. 1988 (2) SCR 1106
 PROPERTY LAW II – INTERNAL ASSESMENT III

The best evidence of the contents of the document is the document itself and as
required Under Section 91 of the Evidence Act, the document itself has to be
produced to prove its contents.9 But having regard to Section 49 of the
Registration Act, any document which is not registered as required under law,
would be inadmissible in evidence and cannot, therefore, be produced and
proved Under Section 91 of the Evidence Act. In the present case, since the
exchange deed is an unregistered document, it is inadmissible in evidence and
as such it can neither be proved Under Section 91 of the Evidence Act nor any
oral evidence can be given to prove its contents. Therefore, The Apex Court
held that the High Court was right in holding so and the appeal was dismissed.

CONCLUSION AND SUGGESTIONS

In India, transactions for purchasing/selling/transferring/creating an interest in

immovable property and transmission of title in respect of a property are
governed by several laws, rules and regulations. The Registration Act, 1908,
lays down the procedure for registration of documents related to the transfer of
immovable properties with the designated registration authorities. Registration
provides information to people who may deal with a property, as to the nature
and extent of the rights which persons may have, affecting that property.
Registration of documents makes the process of verification and certification of
title easier and simpler. It reduces disputes and litigations to a large extent. It is
not wrong to say that in our country there are a lot of documents which are
forged and there is very less transparency in the registration process. In the
capacity of a law student, I would like to suggest that this procedure of
registration of documents should be made more transparent and easier so that
people do not avoid it or find shortcuts to get away with it. Also, I feel that the
stamp duty in general should be revised and be nominal so that it is affordable
9
The Evidence Act 1872, Section 91
 PROPERTY LAW II – INTERNAL ASSESMENT III

for everyone. A high rate of stamp duty acts as a damper for execution of deeds
of conveyance for full value, and encourages illegal transfers. People tend to
find ways to save money and it includes forging of documents or problematic
general power of attorney transactions etc. I am sure of the fact that if the fees
and stamp duty is decreased, it will lead to a positive impact with more and
more people opting for registration. For ex- The State of Haryana took a further
positive step by reducing the stamp duty on deeds of conveyance from 12.5% to
5%. Reducing the stamp duty to realistic levels will encourage public to
disclose the maximum sale value and have the deeds registered. Though the
reduction of the stamp duty, may result in an immediate reduction in the
revenue by way of stamp duty, in the long run it will be advantageous as deeds
would be executed without any undervaluation and more and more transactions
will be done by way of duly registered deeds, disclosing the entire
consideration thereby reducing the generation of black money to a large extent.