A Rs 70 land sale from 1937 survives a 40-year fight: unregistered deed no bar when possession was delivered
Justice Ashish Shroti dismissed a Gram Panchayat second appeal pending since 2004, holding that under Section 54 of the Transfer of Property Act a sale of property worth under Rs 100 is complete on delivery of possession, and an unregistered deed written at the time does not take that title away.
In December 1937 a man named Ramratan paid a zamindar Rs 70 for a plot measuring 22 feet by 18 at Veerpur in Sabalgarh tehsil, in what is now Morena district of Madhya Pradesh. Eighty-nine years later, and forty years after his grandsons were forced to sue to keep it, the Gwalior bench of the Madhya Pradesh High Court has confirmed that the plot is theirs. The Gram Panchayat’s last argument, that the unregistered sale deed from 1937 could pass no title, failed on the plain words of Section 54 of the Transfer of Property Act: property worth less than Rs 100 can be sold by simply handing it over, and writing the bargain down does not change that.
Rs 70, a zamindar, and two shops
The plaintiffs, Harishankar and a co-plaintiff, both grandsons of Ramratan, said their grandfather bought the plot, part of Survey No. 686 at Mauja and Kasba Veerpur, Tehsil Sabalgarh, from Zamindar Murli Singh on 14 December 1937 for Rs 70, by delivery of possession. From that day, they said, first Ramratan and then they had been owners in continuous possession. They built two shops and a ghumati, a small hutment, on the land.
The plot had a history of litigation before the suit was ever filed. The Gram Panchayat had earlier taken proceedings against the plaintiffs before the Naib Tehsildar, Veerpur, in Case No. 106/83-A/68, which were dismissed on 3 August 1983; the Panchayat’s revision was dismissed by the Additional Collector on 21 August 1985 in Revision No. 16/84-85. A separate encroachment case under Section 248 of the Madhya Pradesh Land Revenue Code, Case No. 875/84-85/A/68, was pending before the Naib Tehsildar. And in Case No. 72/1985 under Section 145 of the Code of Criminal Procedure, the Sub-Divisional Magistrate, Veerpur found on 28 June 1985 that the plaintiffs were in possession and entitled to remain there until a competent authority ordered otherwise. No such order, the plaintiffs said, was ever passed.
The trigger for the suit was the Public Works Department. The plaintiffs alleged that the PWD, which did not even exist when their grandfather bought the plot, began claiming to own it, and that on 20 August 1986 defendants 2 and 3 denied their title, orally demanded that the shops and hutment be removed, and threatened demolition. The plaintiffs filed Civil Suit No. 251-A/1986 before the Civil Judge, Class I, Sabalgarh the next day, 21 August 1986, seeking a declaration that they owned the plot and had been in possession since 1937, and a permanent injunction against interference. In paragraph 5 of the plaint they also pleaded title by adverse possession in the alternative.
Two governments, one panchayat, and a collapsed club-house
Two different public bodies claimed the plot, and they did not agree with each other.
Defendants 1 and 2, on the PWD side, said Survey No. 686/2, with an area of 2 biswa, belonged to the PWD and was government land. The plaintiffs, they said, had encroached on a 20 by 20 foot patch in 1984 without any right and put up a hutment and a boundary wall. The encroachment case under Section 248 was pending, and on 20 August 1986 the SDO and Tehsildar had already removed the encroachment, so the plaintiffs were no longer in possession. The 1937 sale deed, they said, was forged and fabricated. They added that the Panchayat’s own case, built on a club-house said to have stood on the plot, had been rejected, so the Panchayat had no right either. The PWD’s name, they said, was correctly recorded in the revenue records.
The Gram Panchayat, defendant 4, filed its own written statement and denied the PWD’s title as firmly as the plaintiffs’. Its story was that a club-house was built on the land in 1942. The Panchayat let it to one Badri Prasad Rayaju on 1 May 1957, and after he vacated, issued a public notice on 23 November 1959 and let it to one Bankelal at Rs 21 a month. In 1978 the club-house collapsed, and the Panchayat sold its materials under Resolution No. 5 of 30 November 1978, a resolution to which Harishankar, then an elected panch, had consented. The Panchayat borrowed Rs 2,000 from the State Government to build two shops and invited tenders. The lowest tender, from Harishankar’s brother Munnalal, who lived jointly with him, was accepted. Munnalal laid the foundation and then abandoned the work, refusing the Panchayat’s notice to complete it.
In 1981, the Panchayat said, Harishankar illegally built a wooden hutment on the land and refused notices to remove it dated 15 March and 24 August 1981. On 7 March 1985, a court holiday, he tried to raise construction, which the Panchayat stopped with the help of the administration. The Panchayat alleged that the plaintiffs had colluded with the patwari to get a wrong survey number recorded in the encroachment report, which is why the Section 248 case was rejected. Ramratan, it said, had never bought the plot at all.
Forty years in three courts
The trial court decreed the suit on 6 February 1995. On the evidence of Radhacharan (PW2), Harishankar (PW3), Prabhudayal (PW4) and Chimanlal (PW6), it held that the plaintiffs had established title since 1937. Radhacharan was the son of an attesting witness to the sale deed and identified his father’s signature on it. In paragraph 9 of its judgment the trial court found that Murli Singh was the earlier owner and had sold the plot to Ramratan in 1937 by delivery of possession. The deed, Exhibit P/1, was more than 30 years old and produced from proper custody, so it was admissible under Section 90 of the Evidence Act. The defendants had failed to prove that the land did not belong to the zamindar, and the Panchayat’s records could not establish that any club-house had stood on the plot. The revenue orders marked Exhibits P/2 to P/4 confirmed the plaintiffs’ long possession. The trial court also accepted the alternative plea of adverse possession against defendants 1 and 2, and held in addition that the plaintiffs had acquired title under Section 5(a) and (b) of the Zamindari Abolition Act, 1951.
The PWD defendants accepted the decree and did not appeal. Only the Gram Panchayat did, in Civil Appeal No. 20-A/2004. The Second Additional District Judge (Fast Track Court), Sabalgarh dismissed it on 3 September 2004, upholding every finding and adding that panchayats were constituted in 1950, whereas the plaintiffs’ title went back to 1937, and the Panchayat had produced no document showing how it ever acquired title.
The Panchayat’s second appeal under Section 100 of the Code of Civil Procedure was admitted on 10 March 2006 on two substantial questions of law: whether a suit based on the unregistered sale deed Exhibit P/1 could be decreed when it was not proved that possession was delivered at the time of execution, and whether the suit could be decreed when the plaintiffs had failed to prove the title of the person from whom the property was bought. The appeal was reserved on 12 October 2026 and decided on 23 October 2026, twenty years after admission.
The registration argument
H.K. Dixit, Senior Advocate, assisted by Nimish Hardeniya, argued for the Panchayat that even though the price was under Rs 100, the plaintiffs had chosen to rely on a written sale deed, and under Section 54 a written instrument of sale is compulsorily registrable. Once a party relies on a written deed, he submitted, it cannot fall back on a sale by delivery of possession. He relied on a coordinate bench decision of the High Court in Smt Yashoda Chaudhary v. Lallu Prasad Chaudhary, S.A. No. 1941/2023. He also argued that the plaintiffs’ possession was not established, that the Panchayat had proved by documents that a club-house stood on the plot and was let to tenants, that the shops now claimed by the plaintiffs were built by the Panchayat after the collapse in 1978, and that the plaintiffs had never proved Murli Singh’s title, so even an accepted sale deed conveyed nothing.
Ankur Maheshwari and F.A. Qureshi, for the plaintiffs, said the plaint pleaded a sale by delivery of possession, not a sale by deed; the unregistered deed was produced in evidence but not relied on in the plaint. Delivery of possession on 14 December 1937 had been established on concurrent findings, and since the price was under Rs 100, title passed. They pointed to the plaintiffs’ witnesses and to the Panchayat’s own witness, Badri Prasad, who accepted in cross-examination that the land originally belonged to Zamindar Murli Singh.
Section 54 has two doors, the court holds
Justice Ashish Shroti began with possession. Both courts below had upheld the plaintiffs’ possession on the oral evidence and on the revenue orders at Exhibits P/2 to P/4. Those were concurrent findings of fact, binding in second appeal, and no substantial question of law had been framed on possession. The court therefore proceeded on the footing that the plaintiffs were in possession.
He then set out Section 54. A sale of tangible immovable property worth Rs 100 or more can be made only by a registered instrument. For property worth less than Rs 100, the transfer may be made either by a registered instrument or by delivery of the property, and delivery takes place when the seller places the buyer in possession. The Supreme Court’s reading in Brijvasilal v. Abdul Haji (2001) 9 SCC 367 confirmed that for property under Rs 100 the sale does not take place until the purchaser is put in possession. The judge added one qualification of his own: “The delivery of possession however has to be actual physical possession.”
The Panchayat’s authorities did not carry it as far as it needed. In Smt Yashoda Chaudhary the coordinate bench had found that the land was joint and undivided, that the witness called to prove delivery said nothing about actual delivery, and that a recital in an unregistered deed could not be treated as gospel truth about delivery of possession. In Gopal Das Chaubey v. Hari Prasad Chaubey, S.A. No. 351/2001, which Yashoda followed, the plaintiff’s case rested solely on the deed and delivery was never proved. In both cases, the judge said, the claim was built on a written unregistered instrument and delivery of possession was not established; in that context the court had held that registration was compulsory. The ratio could not be disputed, but neither case dealt with a party who, apart from the written instrument, successfully proved delivery of possession.
Section 54, the judge held, prescribes two modes of acquiring title to property worth less than Rs 100, and nowhere says that a party who reduces the sale to writing is precluded from proving a sale by delivery. If a party relies only on an unregistered document without proving delivery, the sale is complete only on registration. But where, independently of the document, the party establishes delivery of possession, title cannot be denied merely because the document was not registered. The submission that a written deed shuts out the delivery route was not, he said, the ratio of Yashoda or Gopal Das Chaubey.
He found direct support in the Allahabad High Court’s decision in Raj Bahadur v. Babu Lal, 2011 SCC OnLine All 2189, which surveyed decisions of the Madras, Rajasthan, Orissa, Hyderabad and Allahabad High Courts going back to 1925, including a Hyderabad division bench ruling on a sale for Rs 75 where the same registration objection was raised. The Allahabad court held that neither Section 54 nor Section 17 of the Registration Act requires registration of a sale deed for property under Rs 100; that under Section 49 of the Registration Act an unregistered deed can still be looked at for the collateral purpose of proving delivery; and that where delivery is proved, the unregistered instrument becomes immaterial. Justice Shroti recorded his complete agreement with that view and answered the first substantial question by holding that the suit had rightly been decreed on the basis of a sale by delivery of possession.
The zamindari abolition fallback
There was a second, independent ground. The trial court had also upheld the plaintiffs’ title under Section 5(a) and (b) of the Madhya Bharat Zamindari Abolition Act, Samvat 2008 (Act 13 of 1951). Clause (a) provides that open enclosures used for agricultural or domestic purposes and in continuous possession for twelve years immediately before 1 January 1951, open house sites purchased for consideration, and buildings and places of worship on such land within a village site continue to belong to the proprietor or other person holding them, with the land to be settled by the Government on such terms as it determines. Clause (b) preserves private wells and buildings on occupied land in the same way.
Both courts had concurrently found that Murli Singh sold the land to Ramratan, who had been in possession since 1937. On the abolition of zamindari, the judge held, Ramratan became the holder of the land under Section 5(a) and (b) by virtue of that possession. The Panchayat had not challenged that finding and no substantial question was framed on it. So even if the 1937 sale were not established, the plaintiffs’ grandfather had acquired title through more than twelve years of possession before the cut-off date.
The second substantial question, on Murli Singh’s title, needed little discussion. The question as framed presupposed that his title was unproved, which the record did not bear out: both courts had held it established on the oral evidence, including the Panchayat’s own witness. The Panchayat, by contrast, had put nothing on record to show how it acquired the plot. Its own witness Badri Prasad said panchayats were constituted after 1950, while the plaintiffs’ title went back to 1937, so it was for the Panchayat to show the source of its title. It had already lost before the Tehsildar, and that result had been upheld up to the Board of Revenue, as Exhibits P/2 to P/4 showed. Weighing the evidence, the judge held that the plaintiffs’ evidence had rightly been found trustworthy, and answered the second question by holding that Murli Singh was the title-holder and competent to sell the plot to Ramratan.
Order
The second appeal was dismissed. The judgment and decree of the Civil Judge, Class I, Sabalgarh dated 6 February 1995 in Civil Suit No. 251-A/1986, and of the Second Additional District Judge (Fast Track Court), Sabalgarh dated 3 September 2004 in Civil Appeal No. 20-A/2004, were upheld as just and proper and based on a proper appreciation of the evidence. The declaration of the plaintiffs’ ownership and possession of the plot since 1937, and the permanent injunction restraining the defendants from interfering with it, stand.