(emphasis supplied)

72. It is thus law of the land that even administrative authorities have inherent powers to recall or revoke their own orders if such order was obtained by playing fraud on such public authority. As a necessary corollary if some thing is done by public authority at the behest of a person who played fraud, the same public authority can nullify that was done as vitiated by fraud. As observed by the Supreme Court in Indian Bank (45 supra), inherent powers spring not from legislation but from the nature and conservation of the authorities, to enable them to maintain their dignity, secure obedience to process and ensure transparency. This Court is able to place its hands on two decisions of the Supreme Court, in which the administrative authorities rectified their earlier orders on the ground of fraud and the same received approval by the Supreme Court. These are District Collector and Chairman, Vizianagaram v. M. Tripurasundari Devi and Union of India v. M. Bhaskaran 1995 Supp. (4) SCC 100.

73. In District Collector and Chairman, Vizianagaram , persons who are not qualified were appointed as clerks in the District Administration ignoring the claims of those who were qualified. The Supreme Court held that appointment of an unqualified person amounts to fraud and therefore, such appointments can be withdrawn. The relevant observations are as under.


Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006

It must further be realized by all concerned that when an advertisement mentions a particular qualification and an appointment is made in disregard to the same, it is not a matter only between the appointing authority and the appointee concerned. The aggrieved are all those who had similar or even better qualifications than the appointee or appointees but who had not applied for the post because they did not possess the qualifications mentioned in the advertisement. It amounts to a fraud on public to appoint persons with inferior qualifications in such circumstances unless it is clearly stated that the qualifications are relaxable. No Court should be a party to the perpetuation of the fraudulent practice.
(emphasis supplied)

74. In M. Bhaskaran (57 supra), the respondents obtained employment in railway service by producing bogus and forged service cards as casual labour. Their appointments were subsequently cancelled, which was set aside by Central Administrative Tribunal, Ernakulam. Before the Supreme Court, however, removal of the railway employees was sustained on the ground that when appointment is obtained by fraud, it was open for the employer to terminate the employee. The law laid down by the Supreme Court is as under.


Therefore, it is too late in the day for the respondents to submit that production of such bogus or forged service cards had not played its role in getting employed in railway service. It was clearly a case of fraud on the appellant-employer. If once such fraud is detected, the appointment orders themselves which were found to be tainted and vitiated by fraud and acts of cheating on the part of employees, were liable to be recalled and were at least voidable at the option of the employer concerned. This is precisely what had happened in the present case. Once the respondents were proceeded against in departmental enquiries and were called upon to have their say and thereafter have been removed from service. Such orders or removal would amount to recalling of fraudulently obtained erroneous appointment orders which were avoided by the employer-appellant after following the due procedure of law and complying with the principles of natural justice. Therefore, even independently of Rule 3(1)(i) and (iii) of the rules, such fraudulently obtained appointment orders could be legitimately treated as voidable at the option of the employer and could be recalled by the employer and in such cases merely because the respondent-employees have continued in service for a number of years on the basis of such fraudulently obtained employment orders cannot create any equity in their favour or any estoppel against the employer.

(emphasis supplied)


(emphasis supplied)

75. It is therefore axiomatic that in India, the judicial, quasi judicial and administrative authorities have inherent powers to recall their orders or proceedings at a latter point of time if it is shown that such order was obtained by playing fraud and misrepresentation. The question of applicability of law of limitation to exercise such inherent power by the administrative authorities does not arise because fraud unravels every thing rendering a fraudulent order void and non-existent. To our mind, this principle in a different manner is also adumbrated in Section 21 of General Clauses Act, 1897 (Central Act No. X of 1897). Under the said provision, an authority who has power to issue, inter alia orders has also power to rescind such order. Further, the Rule 117 of Registration Rules permits the registration of cancellation deed in the same class of register book as that in which original document which it cancels has been registered. It is clearly not possible to accept the submission that registering officer has no power to accept and register a cancellation deed cancelling the earlier sale deed. Such an interpretation would not sub-serve public interest and if the registering officer is not given such power, it would further harm public interest and public policy. Nobody can deny that in a civilized society regulated by rule of law, the person with valid title must have the liberty to enjoy his property and such liberty cannot be deprived of without proper procedure under law.


76. In the considered opinion of this Court if a person sells away the property belonging to other, it would certainly be fraud on the statute. It would be adding insult to injury, if such person is asked to go to civil Court and get the subsequent sale deed cancelled or seek a declaration. Be it also noted that under common law, as discussed supra, the title of a person remains intact even if a stranger conveys that title to another stranger, which is ineffective. In the context of describing 'overriding interest' (interests, rights and powers not entered in the register), in Halsbury's Laws of England (Fourth Edition by Lord Mackay, volume 26 (reissue), the following is elucidated:
Para 786. Entry of existence of overriding interests. Where the existence of any overriding interest is proved to his satisfaction or admitted, the registrar may, subject to prescribed exceptions, enter notice of the interest or of a claim to it on the register. This is a general provision which authorizes entry of notice of, among other things, the burden of an easement, right or privilege (being an overriding interest) acquired in equity by prescription if it be of such an estate and nature as is capable of taking effect at law.


Any person desiring an entry to be made must make a written application giving particulars of the entry required. If the applicant is the proprietor of the land, or the liability, right or interest has been created by the proprietor, and if in either case there is no caution, restriction or inhibition on the register, an entry of the existence of the liability, right or interest may be made accordingly. In other cases evidence satisfactory to the registrar must be produced of the existence of the liability, right or interest. The proprietor of the land, if not the applicant, must have notice of the application; and the matter must be proceeded with as the registrar directs Any entry of the existence of the liability right or interest, if made, must be agains the title in the charges register; and sucl entry must be made so far as practicable and convenient by reference to the instrument creating the right or by setting out an extract from it.

No claim to an easement, right or privilege not created by an instrument may be noted against the title to the servient land if the proprietor of that land (after 14 days' notice or such longer period as the registrar deems advisable) shows sufficient cause to the contrary.

77. The person, who has ex facie right whether such right is registered or not can always approach the registering authority, with a request to cancel a sale deed, which was registered earlier by such registering authority by showing that subsequent registration was obtained by fraud by a person who is not entitled to transfer the property or that such transfer was registered by playing fraud on the owner or on the stranger. In the present statutory dispensation, namely Transfer of Property Act, Contract Act, Specific Relief Act and Registration Act, the Court does not see any prohibition operating on the exercise of inherent power by the registering authority to cancel the sale deed earlier registered, which is likely to cause prejudice to the true owner as well as to the entire public at large.


78. This Court accordingly holds on point No. 1 against the petitioners.

PART - V In Re Point No. 2 Whether a writ petition is maintainable for invalidation of a cancellation deed or for cancellation of an instrument which purports to nullify a sale deed?


79. There are mainly three types of cases before this Court. In the first group of cases being W.P. Nos. 22257, 22298, 23005 and 23008 of 2004, respondents 4 and 5 executed and registered cancellation deeds on the ground that the sale deeds executed by vendors in August, 1994, could not be finalized as sale consideration was not received by the vendors, that physical possession of the property was not delivered to the vendee and that the property was not mutated in the name of the vendee. It is also alleged that the earlier sale deed is sham and nominal. Be that as it is, though the cancellation deeds were executed on 20.08.2003, the writ petitions were filed after a period of one year in November, 2004. In the second group of cases, the sale deeds were cancelled by the vendors alleging that the owners executed general power of attorney in favour of two persons, that subsequently they cancelled the GPA in 1997 and that in spite of cancellation those persons executed sale deeds in the year 2000 without any authority or entitlement to transfer the property. These are Writ Petition Nos. 879 to 882 and 979 to 981 of 2006. In the third category of cases, being W.P. Nos. 25661 to 25666 of 2005, the contesting respondents alleged that the person who executed sale deeds claiming to be GPA holder played fraud and misrepresented, that he has such authority or power to execute sale deeds and that the executant obtained GPA by playing fraud on the real owner.


80. Assuming that the petitioners filed suits before the civil Court for the relief, as is prayed herein before this Court, having regard to the pleadings, the civil Court has to necessarily frame the issues, which would be somewhat like this, namely, (i) whether the sale deeds executed by the vendors in favour of the petitioners are valid and binding on the owners of the property; (ii) whether the GPA executed by the owner in favour of the persons, who executed sale deeds enables such GPA holder to convey or transfer the immovable property; (iii) whether the person who obtained GPA from the real owner has not played fraud and misrepresentation on the real owner; (iv) whether the sale deed executed is void or voidable as vitiated by fraud and misrepresentation; and (v) whether the cancellation deed is liable to be cancelled. There could be other incidental or related issues but mainly these will be issues in case the petitioners go to civil Court. This Court cannot resolve these issues in writ petitions. Each one of the issues requires evidence - both oral and documentary. Such evidence must be relevant and must relate to existence or non-existence of every disputed fact in issue. Mere pleadings either by way of plaint or written statement or for that matter, an affidavit would not be sufficient to decide the issue either way. In such a situation, an assumption that a vendor cannot cancel the sale deed or the registering authority cannot accept and register the cancellation deed would be legally incorrect.


81. Conceptually, Law broadly consists of private law and public law. All statutes and majority of common law principles regulating inter se human relations are often referred to as private law. The principles of law or statute law governing relations between the individual and public authorities (the State, the Government, quasi-Government, statutory and administrative authorities and bodies), is often referred to as public law. In Common Law jurisdictions in one form or the other, the Courts have developed the principles of public law containing normative standards though not always entrenched. These principles have been evolved to ensure that every public body acts within law in a manner, which is not arbitrary and unreasonable. The power of judicial review, therefore, is the process by which statutory Courts - generally constitutional Courts; review functions and activities of public authorities in the field of public law. What are the authorities and what are the functions of such authorities amenable to the power of judicial review is always a question of great significance, with which the Courts perennially grope with. There could be public authorities with wide variety of private law functions as there could be private persons discharging public functions. In the former case, they cannot be dragged to public law Courts and in the latter case they cannot escape scrutiny by public law Courts.

82. It is misnomer to assume that all statutory authorities like registering authority, always discharge public law functions. Some of the functions like registration of documents/instruments may be in exercise of statutory power but such functions may or may not strictly concern with public law. For instance, a registration of gift deed executed by donor in favour of donee is only pursuant to statutory power but the same does not involve any public law function. Similar is the case in the event of registration of a sale deed, mortgage deed or licence deed, compromise deed and/or cancellation of any of these deeds.


83. Judicial review has its own limitations and all decisions of public bodies are not amenable to this public law power. Nor is it permissible for a reviewing Court to deal with matters which lack adjudicative disposition by reason of prerogative nature of the power exercised by the public authority or exclusive entrustment of powers to a specialized body of the State. As the legislative and executive wings are prohibited from usurping the judicial functions of the State, the judiciary is not expected to discharge legislative and executive functions. The exposition of the principles of judicial review by Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service (1985) AC 374 has attained the classical status of law of judicial review. While grouping the grounds of judicial review into three broad points, namely, illegality, irrationality and impropriety, the noble Lord observed.

 For a decision to be susceptible to judicial review the decision-maker must be empowered by public law (and not merely, as in arbitration, by agreement between private parties) to make decisions that, if validly made, will lead to administrative action or abstention from action by an authority endowed by law with executive powers, which have one or other of the consequences mentioned in the preceding paragraph. The ultimate source of the decision-making power is nearly always nowadays a statute or subordinate legislation made under the statute; but in the absence of any statute regulating the subject matter of the decision the source of the decision-making power may still be the common law itself, i.e., that part of the common law that is given by lawyers the label of 'the prerogative'.

84. In a recent Judgment in State of U.P. v. Johri Mal , the Supreme Court of India reiterated the scope and limitations of judicial review in the following terms.


The scope and extent of power of the judicial review of the High Court contained in Article 226 of the Constitution of India would vary from case to case, the nature of the order, the relevant statute as also the other relevant factors including the nature of power exercised by the public authorities, namely, whether the power is statutory, quasi-judicial or administrative. The power of judicial review is not intended to assume a supervisory role or don the robes of the omnipresent. The power is not intended either to review governance under the rule of law nor do the courts step into the areas exclusively reserved by the suprema lex to the other organs of the State. Decisions and actions which do not have adjudicative disposition may not strictly fall for consideration before a judicial review court. The limited scope of judicial review, succinctly put, is:
(i) Courts, while exercising the power of judicial review, do not sit in appeal over the decisions of administrative bodies.

(ii) A petition for a judicial review would lie only on certain well-defined grounds.

(iii) An order passed by an administrative authority exercising discretion vested in it, cannot be interfered in judicial review unless it is shown that exercise of discretion itself is perverse or illegal.

(iv) A mere wrong decision without anything more is not enough to attract the power of judicial review; the supervisory jurisdiction conferred on a court is limited to seeking that the Tribunal functions within the limits of its authority and that its decisions do not occasion miscarriage of justice.

(v) The courts cannot be called upon to undertake the government duties and functions. The court shall not ordinarily interfere with a policy decision of the State. Social and economic belief of a judge should not be invoked as a substitute for the judgment of the legislative bodies.


85. Apart from the limitations pointed out by the Supreme Court, the power of judicial review is not available when there is an effective alternative remedy to the aggrieved person. When granting redressal involves adjudication of disputed questions of facts, which require adducing of evidence by the parties, then also ordinarily an application for a judicial review is not accepted. See Whirlpool Corporation v. Registrar of Trade Marks . There is justification for the principle. Clive Lewis in 'Judicial Remedies in Public Law' (first edition 1992, Sweet & Maxwell, pp. 229 and 230), explained the rationale for the principle as under.

 The rationale for the exhaustion of remedies principle is relevant to the scope of that principle. A two-fold justification has been put forward. First, that where Parliament has provided for a statutory appeals procedure, it is not for the courts to usurp the functions of the appellate body. The principle applies equally to bodies not created by statute which have their own appellate system. Secondly, the public interest dictates that judicial review should be exercised speedily, and to that end it is necessary to limit the number of case in which judicial review is used. To these reasons can be added the additional expertise that the appellate bodies possess. In tax cases, for example, the appellate body, the General or Special Commissioners, have wide experience of the complex and detailed tax legislation. In employment cases, for example, the system of Industrial and Employment Appeal Tribunals may be better equipped to deal with industrial issues than the High Court.


86. Whether the vendors file suits for cancellation of the instrument under Section 31 or for declaration of title under Section 34 or whether vendees file suits for cancellation of the cancellation deed, there are bound to be allegations of fraud, misrepresentation and illegality by both the parties. An elaborate procedure is available under Code of Civil Procedure, 1908 (CPC), Evidence Act, Specific Relief Act and Transfer of Property Act, which has to be followed by a civil Court. Certain issues cannot be adjudicated by resorting to summary procedure. In a writ petition, this Court decides the issues based on the affidavit evidence. Whenever affidavit evidence is not sufficient and further probe is required in the sense that persons who swear affidavits need to be cross-examined and confronted with documentary evidence, a writ petition is not a proper remedy. In a sale transaction, it is essentially a contract between two persons and if one person after conclusion of the contract goes back and makes attempt or purports to make an attempt to deny the benefit of the contract of the other party, the remedy is only in the civil Court.


87. Registration Act would show that the registering authorities are creations of statutes and they are conferred powers under the statute to enable them to discharge statutory duties. A registering authority has a role of a catalyst in the sense of legitimizing certain transactions by registering as per law. By the action or inaction of registering authority, there is no involvement of the State or the Government as such, except to the extent of charging registration fee for the service of registration as well as keeping the registers. Therefore, any instrument between the two persons, is governed by private law principles and registration thereof does not play any pervading role in rendering the transaction legal or otherwise. For instance, if a contract is prohibited by reason of its being against public policy, the registration of the document evidencing such contract does not render it valid. Similarly, if two joint owners of immovable property decide to exchange properties and do so without going to registering authority, no law prohibits such exchange. However, if either of them wants to produce such deed as evidence, by reason of Section 49(c) of Registration Act, the same cannot be received as evidence of transaction between them. The registration in certain circumstances is notice of a transaction relating to immovable property to a limited extent. Therefore, Registration Act and registering authorities acting thereunder mainly deal and regulate transactions in the realm of private law. For this reason also, the writ petition cannot be entertained.


88. At this stage, cases decided by this Court may be noticed. In these, a view has been taken that when once a document is registered by registering authority, the same can be nullified only by the civil Court and that at the time of registration, the registering authority has no power to make enquiry as to the competence or otherwise of the person presenting the document for registration. In Property Association of Baptist Churches (1 supra), one of us (Justice V.V.S. Rao) was dealing with a case wherein the action of the registering authority was challenged in registering the documents in respect of specified land. The case was founded on an allegation that the land was being alienated by encroachers clandestinely though they have no title to the property. The writ petition was opposed inter alia on the ground that registering authority has no jurisdiction to refuse registration of the documents. This Court referred to Part XI and Section 77 of the Registration Act as well as Rule 58 of the Registration Rules and dismissed the writ petition observing as under.

 A reading of the above provisions would show that the power of the registering officer is limited to enquire into the validity of the document brought to him for registration or to enquiry into any written or verbal protest against the registration of a document based on the ground that the executing party has no right to execute the document. The limited power of the registering officer to enquire into objections that the executing party had no right to execute document get extinguished the moment the document is registered. No such power inheres in the registering officer or the District Registrar to cancel the sale deed, unless another document for cancellation is presented with proper stamp duty and registration charges. A party aggrieved by a registered document on conveyance has to file civil suit seeking appropriate declaration under Section 34 of the Specific Relief Act, read with Article 59 of the Schedule under the Limitation Act, 1963. The writ petition is not a proper remedy.


89. Following the decision in Property Association of Baptist Churches (1 supra), another learned single Judge in Karimnagar Education Society, Karimnagar v. The District Registrar, Registration and Stamps, Karimnagar, an unreported Judgment in W.P. No. 14007 of 2004, dated 18.08.2004, dismissed the writ petition observing as under:
This Court in Property Association of Baptist Churches (1 supra) categorically held that the limited power of the registering officer to enquire into the objections that the executing party had no right to execute document get extinguished the moment the document is registered. No power inheres in the registering officer or the District Registrar to cancel the deeds, unless another document is presented with proper stamp duty and registration purpose. A party aggrieved by a registered document on conveyance has to file a civil suit seeking proper declaration under Section 34 of the Specific Relief Act.

In the present case, earlier Gift Deed, which was registered in favour of the petitioner was cancelled through Cancellation Deed and presented for registration and the same was registered. The moment it is registered, the remedy of the petitioner, if any, is to approach the civil court seeking proper declaration.

90. In K. Gopal Reddy v. Secretary and Ors. , Another learned single Judge allowed the writ petition restraining the vendors from alienating and conveying the immovable property in favour of others. The learned Judge observed as under.


If the cancellation of sale deed is by a private individual, it hardly needs any emphasis that the necessary forum to adjudicate upon it is a Civil Court. However, where such action is resorted to by a State or its agency, the exercise partakes an administrative character. An administrative or state agency is not accorded the same latitude as a private individual in its functioning. Its acts and omissions are required to be in accordance with law, reasonable and not arbitrary.... It hardly needs any emphasis that wherever a transaction of sale, mortgage or other transfer takes place in accordance with law, it can be annulled only with the participation of parties to such transaction. If one of the parties does not co-operate for such annulment or cancellation, the only course open to the party intending such cancellation is to have recourse to an action under Section 39 of the Specific Relief Act. If unilateral cancellation of sale deeds or other instruments is permitted, there is every danger of a party to a transaction becoming an ultimate Judge in his own cause. In such cases, the sales or other transactions brought about in accordance with law, loose their significance and have to depend for their efficacy or enforceability on the mercy of the person who transferred the rights under the documents.


(emphasis supplied) 91 Reading the above observations made by the learned Judge, this Court is not able to countenance the submission of the learned Counsel for the petitioners that the said Judgment is an authority in support of the contention that a cancellation cannot be registered. Indeed as held by learned Judge, if a cancellation deed is executed and registered by private individual, the remedy is only civil Court and a writ petition would not lie. Another aspect of the above decision is that if there is participation by all the parties to the document, there can be a cancellation deed and according to learned Judge, unilateral cancellation cannot be permitted. Be that as it is, the decisions in Karimnagar Education Society (supra) and K. Gopal Reddy (61 supra) were the subject matter of writ appeals. Writ Appeal No. 1486 of 2004 was filed against Karimnagar Education Society (supra) and Writ Appeal No. 972 of 2004 was filed against K. Gopal Reddy (61 supra). The Division Bench, by order dated 11.10.2004, dismissed the Writ Appeal No. 1486 of 2004 laying down as under:


The short question that falls for consideration is whether the registering authority is duty bound to make any enquiry as such before registering the deeds of cancellation. The learned Counsel for the appellant very fairly stated before us that there is no provision, which enables or obligates the registering authority to make any such enquiry before registering the cancellation deed. In such view of the matter, in our considered opinion, the public law remedy invoked by the appellant herein is ill suited to resolve the controversy between the appellant and the third respondent. The dispute essentially is between the appellant and the third respondent. The third respondent having executed the gift deed appears to have cancelled the document and according to the appellant, without any reason or justification. That dispute lies essentially in the realm of private law, which is required to be adjudicated only in a common law proceeding.... It is not as if the appellant is left without any remedy. He is always entitled to seek proper declaration under Section 34 of the Specific Relief Act as has been rightly observed by the learned single Judge. We accordingly find no merit in the appeal and the same shall accordingly stand dismissed.


92. The writ appeal filed against K. Gopal Reddy (61 supra) was allowed by order, dated 11.10.2004, following Writ Appeal No. 1486 of 2004. However, when two writ petitions being W.P. Nos. 23005 and 23008 of 2004 were listed before the learned single Judge, who decided K. Gopal Reddy (61 supra), the matters were referred to Larger Bench observing that so as to protect the interests of both the parties whenever a deed of cancellation is presented, there should be compliance with Section 32A of the Registration Act which mandates compulsory affixing of photographs of the buyer and seller, if the document is a sale deed.

93. After considering the background of these cases, we hold that the decision of the Division Bench in Writ Appeal No. 1486 of 2004, dated 11.10.2004, is correct exposition of law having regard to various provisions of Registration Act and TP Act, which have been analysed while considering point No. 1. We, therefore, hold that whenever a person is aggrieved by a cancellation deed, the remedy is to seek appropriate relief in the civil Court and writ petition is not proper remedy. There are other reasons as well, as discussed below.


94. As seen from the counter affidavits filed by the contesting respondent, extremely serious questions regarding right and entitlement to immovable property have been raised. With the affidavit evidence, which by no means can be treated as elaborate, if this Court decides such serious questions, it would certainly prejudice the rights of the respondents and they would be deprived of the remedy before hierarchy of civil Courts. In the considered opinion of this Court, the jurisdiction under Article 226 of Constitution of India cannot be exercised if the order passed by this Court cannot be carried out without prejudicing the rights of the others. As observed by the Supreme Court in A.R. Antulay v. R.S. Nayak , "it has been said long time ago that "Actus Curiae Neminem Gravabit", the act of the Court shall prejudice no man and that this maxim is founded upon justice and good sense and affords a safe and certain guide for the administration of the law". Be it noted that even according to the petitioners, the sale deed obtained by them is valid till it is cancelled by the civil Court. Therefore, even if the cancellation deed is allowed to remain, no prejudice would be caused to the petitioners. It is also pointed out to us by the learned Government Pleader that as per the instructions issued by the IG under Section 69 of the Registration Act, the registering authority is issuing a notice to the earlier purchasers and also endorsing on the cancellation deed that such cancellation deed does not alter the rights.

95. That disputed questions of fact cannot be gone into in a writ petition is axiomatic. A copious reference to case law is not necessary. As pointed out earlier, among many; it is one of the limitations on the exercise of power of judicial review. A reference may be made to two decisions of the Supreme Court in this context. In State of Bihar v. Jain Plastics and Chemicals Limited , the law was summarized as under.


It is to be reiterated that writ petition under Article 226 is not the proper proceeding for adjudicating such disputes. Under the law, it was open to the respondent to approach the Court of competent jurisdiction for appropriate relief for breach of contract. It is settled law that when an alternative and equally efficacious remedy is open to the litigant, he should be required to pursue that remedy and not invoke the writ jurisdiction of the High Court. Equally, the existence of alternative remedy does not affect the jurisdiction of the Court to issue writ, but ordinarily that would be a good ground in refusing to exercise the discretion under Article 226....It is true that many matters could be decided after referring to the contentions raised in the affidavits and counter-affidavits, but that would hardly be ground for exercise of extraordinary jurisdiction under Article 226 of the Constitution in case of alleged breach of contract. Whether the alleged non-supply of road permits by the appellants would justify breach of contract by the respondent would depend upon facts and evidence and is not required to be decided or dealt with in a writ petition. Such seriously disputed questions or rival claims of the parties with regard to breach of contract are to be investigated and determined on the basis of evidence which may be led by the parties in an properly instituted civil suit rather than by a Court exercising prerogative of issuing writs.


96. In Orissa Agro Industries Corporation Limited v. Bharati Industries , after referring to State Bank of India v. State Bank of India Canteen Employees Union , Chairman, Grid Corporation of Orissa v. Sukamani Das and National Highways Authority of India v. Ganga Enterprises , while reminding that where the dispute involves questions of fact, the matter ought not to be entertained under Article 226 of Constitution of India, the apex Court observed as under:
 Where a complicated question of fact is involved and the matter requires thorough proof on factual aspects, the High Court should not entertain the writ petition. Whether or not the High Court should exercise jurisdiction under Article 226 of the Constitution would largely depend upon the nature of dispute and if the dispute cannot be resolved without going into the factual controversy, the High Court should not entertain the writ petition. As noted above, the writ petition was primarily founded on allegation of breach of contract. Question whether the action of the opposite party in the writ petition amounted to breach of contractual obligation ultimately depends on facts and would require material evidence to be scrutinized and in such a case writ jurisdiction should not be exercised.
(emphasis supplied) PART - VI CONCLUSION:


(emphasis supplied) PART - VI CONCLUSION:
97. As already referred to in these cases, there are serious disputed questions of fact regarding the allegations of fraud and misrepresentation played by the vendors as well as vendees against each other. There are also questions raised regarding the competence and entitlement of a person executing the document. In some cases (W.P. Nos. 22298, 23005 and 23088 of 2004), the sale deeds were cancelled some time in August, 2003, but the writ petitions are filed with considerable delay. In some cases, there are complaints of cancellation of deeds/instruments after lapse of ten years after execution of the original deed. In the opinion of this Court, these are the matters which are to be decided based on evidence and the affidavit evidence available on record is hardly sufficient to decide the issues in such a manner to meet the ends of justice. Indeed, in some of the matters (W.P. Nos. 879, 880, 881, 882, 979, 980 and 981 of 2006), suits are already filed for injunction and the orders of status quo are in force. Therefore, this Court is of considered opinion that the parties should be relegated to the civil Court to file suit either under Section 31 or under Section 34 of Specific Relief Act. Point No. 2 is answered accordingly.


98. In the result, for the above reasons, all the writ petitions are dismissed subject to observations made hereinabove. Be it noted, as and when any suits are filed, the civil Court has to decide the issues regarding disputed questions of facts without in any manner influenced by the observations made in this Judgment. There shall be no order as to costs.

Bilal Nazki, J.

1. This batch of writ petitions raise same question of law and fact. Facts in different writ petitions have been noted in the opinion of my brother Mr. Justice V.V.S. Rao and I will not be dealing with the facts in detail.


2. The question is, whether a person who sells his property and executes a sale deed and gets it registered in terms of the Registration Act, 1908 (hereinafter referred to as 'the Registration Act'), could unilaterally cancel such sale deed and whether Sub-Registrar was bound to register such a deed. In Writ Petition No. 14007 of 2004, the registration of cancellation of gift deed by Sub-Registrar, Karimnagar was challenged. A learned Single Judge of this Court, relying on an earlier judgment of Single Judge in Property Association of Baptist Churches v. Sub-Registrar, Jangoan , dismissed the writ petition holding that a party aggrieved by registration of a document, had to file a suit. This judgment was challenged in Writ Appeal No. 1486 of 2004. The Division Bench considered the question whether registration of a cancellation deed could be effected by the registering authority. The Division Bench however, by its order dated 11.10.2004, affirmed the order of the learned Single Judge and dismissed the appeal. In that judgment, it was observed that the Registration Act does not enable the registering authority to make an enquiry before registering a cancellation deed. Therefore dispute, if any, between the parties, was a dispute essentially in terms of private law which could only be agitated in common law proceedings by seeking a declaration under the Specific Relief Act. Thereafter, Writ Petition Nos. 23005 and 23088 of 2004 came up before another Judge. In these writ petitions also, registration of cancellation deeds was challenged. The learned Single Judge felt that various legal questions were not brought to the notice of the Division Bench when it decided Writ Appeal No. 972 of 2004 and referred the matters to another Division Bench. The Division Bench referred the matters to the Full Bench. This is the background in which these matters have come up before us.


3. The learned Single Judge in Writ Petition Nos. 23005 and 23088 of 2004, was of the opinion that the law laid down by this Court in Writ Appeal No. 1486 of 2004 was sought to be applied to sale deeds whereas registration of cancellation of gift deed was the subject matter in Writ Appeal No. 1486 of 2004. The learned Single Judge in his reference order, observed-
 In this regard, it needs to be noticed that a gift deed, on the one hand, and a sale deed, on the other, stand on different footing. Under Section 126 of the Transfer of Property Act, it is competent for a Donor, to suspend or revoke a gift deed, executed by him, whereas similar facility is not available, in case of a sale deed. Gift is a transfer, without any monetary consideration, whereas under a sale transaction, mutual rights and obligations exist, as between a Vendor and Vendee. Section 31 of the Specific Relief Act prescribes the manner, in which a document can be cancelled. What is required to be done through the decree of a Court, cannot be permitted to be undertaken by a party by himself.

And finally observed-
 This Court is of the view that, if sale deeds, under which valuable properties are conveyed, are permitted to be cancelled unilaterally, it would not only result in several complications, unnecessary litigations, and hardship to the affected parties, but also bring about situations, having far-reaching implications and unrest in the Society. These aspects do not appear to have been brought to the notice of the Division Bench, which disposed of W.A. No. 972 of 2004. It is felt that the matter needs to be examined either by another Division Bench, or, if necessary, by a Full Bench.


4. When the matter came up before the Division Bench, the Division Bench, by a very short order, referred the matter to the Full Bench as it thought that the questions raised were of public importance and the earlier Division Bench had not discussed all the issues which were involved.

5. My brother Mr. Justice V.V.S. Rao has written a detailed opinion and has come to a conclusion that writ petitions deserve to be dismissed. With due respects to my brother, I venture to draft an opinion which is not in conformity with the views of my brother.


6. M/s. M.R.K. Chowdary and K. Ramakrishna Reddy, senior Advocates and N. Subba Reddy, V. Venkata Ramana, J. Prabhakar and H. Venugopal, learned counsel, have appeared for petitioners. The main thrust of their contentions is on the fact that the Registration Act has been enacted with a view to provide information to people, who may deal with property, as to the nature and extent of the rights, which, persons may have, affecting that property. They further contend that there would have been no need for having an Act like the Registration Act if it was not felt necessary that people should know and people should be able to find out whether any particular property with which they may be concerned, had been subjected to any liability or legal obligation. Therefore, the scheme of the Registration Act provides that one should give importance and solemnity to certain classes of documents by directing that they shall be compulsorily registrable and the general purpose of the Act appears to be to put on record somewhere the particulars of ownership of property where people can examine those particulars if they are interested in such properties. It also appears from the scheme of the Registration Act that the Act reduces the chances of fraud. It is further contended by the learned Counsel for the petitioners that sale is governed by the provisions of Transfer of Property Act, 1882 (hereinafter referred to as 'the TP Act') and 'sale' is defined under Section 54 of the TP Act as, ""Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. "It further lays down that in case of such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, can only be made by a reqistered instrument, and Section 17 of the Registration Act makes a sale deed compulsorily


reqistered instrument, and Section 17 of the Registration Act makes a sale deed compulsorily registerable. Therefore, it is contended on behalf of petitioners that it is not the registration of the document which is sought to be cancelled by preparing cancellation deeds and getting them registered, in effect, what is sought to be done is cancellation of the sale itself, which is not permissible. Sale, by its definition in the TP Act, is a transfer of ownership in exchange of consideration, which means that there cannot be a unilateral sale. A person must be owner of the property and he should sell it to another person in exchange for a price paid or promised or part-paid or part-promised. There is no concept of a unilateral sale. Sale is always bilateral. It is true there can be many owners and many purchasers but sale is incomplete unless the document is registered, which is a requirement under Section 54 of the TP Act and also under Section 17 of the Registration Act. It is well settled that transfer of ownership means a transfer by a person of his rights and interests in the property in full and permanently. A transfer of a part only of such interests or for a particular period reserving the rest for the transferor himself is not a transfer of ownership. It has also been held by Courts that where a transfer is made for a price paid or promised and the deed is registered, a sale is duly effected and the propriety interest in the property passes. In this connection, reference can be made to (1) Sahadeo Singh v. Kuber Nath Lal , and (2) Kalyan v. Mt. Desrani AIR 1927 All. 361. This Court in Kutcherlakota Vijayalakshmi v. Radimeti Rajaratnamba , even went to the extent of saying that purchaser gets title as soon as the sale deed is registered even if the consideration is not paid and it further held that the remedy for


the sale deed is registered even if the consideration is not paid and it further held that the remedy for the vendor was to claim consideration.


7. The learned Counsel for petitioners would further contend that if Section 17 of the Registration Act and Section 54 of the TP Act are read together, then the effect of registration of sale deed would be that the rights of the vendor get extinguished in the property for which he executes a sale deed and if the rights of a person are extinguished and he has no rights whatsoever left in the property, there arises no question of his executing a fresh deed cancelling the sale deed. Sale is not a unilateral act, but is a bilateral act. As a result of this bilateral act, the rights of the vendors in the property get extinguished and get transferred wholly to the vendee. Vendor is left with no rights vis-a-vis the property. Therefore, if any deed styled as 'cancellation of sale deed' is executed or registered, it would amount to fraud because, by such a deed, neither rights are extinguished nor created but has the potential of creating a mischief. The deed of cancellation of sale deed which is duly registered by the Sub-Registrar, does not confer in law any rights to the erstwhile vendors. These documents are only executed for the purpose of creating a mischief and blackmailing the vendees. It was submitted that these documents, after registration, are presented to banking authorities and are given publicity so that the bankers and the prospective purchasers entertain doubts about the title of the land and the vendees-the bona fide purchasers, find difficulty in raising finances, using the property or transfer the property.


8. The argument of the other side is that the registration officer is bound to register any document, which is presented before him. He is not supposed to conduct an enquiry whether the document confers any right on the person who presents the documents for registration or who execute such a document. It is further contended that if the petitioners are aggrieved of registration of any document, the remedy available to them is to go to a civil Court and get a declaration.

9. In the light of these submissions, this Court will have to see whether the registration authorities are duty bound to register such sham documents. Let us now see the provisions of the Registration Act. Section 17 of the Registration Act make certain documents compulsorily registrable. Section 18 of this Act mentions the documents, of which, registration is optional. Section 32 mentions the persons who can present the documents for registration. It lays down-
32. Persons to present documents for registration:- Except in the cases mentioned in Sections 31, 88 and 89, every document to be registered under this Act, whether such registration be compulsory or optional, shall be presented at the proper registration office:
(a) by some person executing or claiming under the same, or, in the case of a copy of a decree or order, claiming under the decree or order, or

(b) by the representative or assign of such person, or

(c) by the agent of such person, representative or assign, duly authorized by power-of-attorney executed and authenticated in manner hereinafter mentioned.

Section 49 lays down-
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], to be registered shall,-
(a) affect any immovable property comprised therein, or

(b) confer any power to adopt, or


(b) confer any power to adopt, or

(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered.

10. After having a glance over these provisions of the Registration Act, a glance at certain sections of the TP Act is also necessary. Section 54 has already been reproduced hereinabove. Section 4 of the TP Act lays down-
4. Enactments relating to contracts to be taken as part of Contract Act - The Chapters and sections of this Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872 (IX of 1872).

[And Section 54, Paragraphs 2 and 3, 59, 107 and 123 shall be read as supplemental to the Indian Registration Act, 1908 (XVI of 1908)] 'Transfer of property' has been defined under Section 5 as under-
 In the following sections "transfer of property" means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, and one or more other living persons and "to transfer property" is to perform such act.

Section 8 of this Act lays down-
8. Operation of transfer - Unless; a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof.


Such incidents include, where the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth;
and, where the property is machinery attached to the earth, the movable parts thereof;
and, where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things provided for permanent use therewith;
and, where the property is a debt or other actionable claim, the securities therefor (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer;
and, where the property is money or other property yielding income, the interest or income thereof accruing after the transfer takes effect.

Section 53 of TP Act lays down-
53. Fraudulent transfer:
(1) Every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration. Nothing in this sub-section shall affect any law for the time being in force relating to insolvency. A suit instituted by a creditor (which term includes a decree-holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf of, or for the benefit of, all the creditors.


(2) Every transfer of immovable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee. For the purposes of this subsection, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made.

11. The purpose of noting down these provisions of TP Act and the Registration Act is to come to a conclusion as to whether a vendor retains any interest in the property which he sold and of which a sale deed was executed and registered. The answer is emphatic 'no'. Therefore, in my view, when a person transfers all his rights, his rights in the property get extinguished and if he tries to get back the property, it has to be done by challenging the sale deed which he has executed and which is registered by the Sub-Registrar.


12. Section 23 of the Indian Contract Act, 1872 (hereinafter referred to as 'the Contract Act') is applicable to the present controversy. It lays down that an agreement is void if it deviates from the provisions of any law. It further lays down that consideration or object of an agreement is lawful unless it is forbidden by any law or is fraudulent or involves or implies injury to the person or property of another, or the Court regards it as immoral or opposed to public policy. Therefore, such a document, in my view, is a fraudulent document within the meaning of Section 23 of the Contract Act and as such, cannot be registered. It is even against public policy. 'Public policy' was defined by Supreme Court in Murli dhar Agarwal v. State of Uttar Pradesh . In para 28, the Supreme Court discussed public policy vis-a-vis policy of law. Para 28 is reproduced hereunder-
 28. The expression 'public policy' has an entirely different meaning from 'policy of the law' and one much more extensive. Nevertheless, the term 'public policy' is used by the House of Lords itself apparently as synonymous with the policy of the law or the policy of a statute see Hollinshead v. Hazleton 1916 AC 428. Yet it is clearly so used without intent to repudiate or disregard the distinction so clearly drawn in Egerton v. Brownlow, (1853) 4 HLC 1 at p. 105. It seems clear that the conception of public policy is not only now quite distinct from that of the policy of law but has in fact always been so except is some exceptional instances of confusion which have had no substantial effect on the general course of authority. See W.S.M. Knight, "Public Policy in English Law", 38, Law Quarterly Rev., 207, at pp. 217-218.


13. In para 30 of the judgment, it defined 'public policy' on the basis of the definition of Win field as a principle of judicial legislation or interpretation founded on the current needs of the community. Para 30 is reproduced hereunder-


30. "Public policy" has been defined by Winfield as "a principle of judicial legislation or interpretation founded on the current needs of the community". (See Percy H. Winfield, "Public Policy in English Common Law", 42 Harvard Law Rev. 76). Now, this would show that the interests of the whole public must be taken into account; but it leads in practice to the paradox that in many cases what seems to be in contemplation is the interest of one section only of the public, and a small section at that. The explanation of the paradox is that the courts must certainly weigh the interests of the whole community as well as the interests of a considerable section of it, such as tenants, for instance, as a class as in this case. If the decision is in their favour, it means no more than that there is nothing in their conduct which is prejudicial to the nation as a whole. Nor is the benefit of the whole community always a more tacit consideration. The courts may have to strike a balance in express terms between community interests and sectional interests. So here we are concerned with the general freedom of contract which everyone possesses as against the principle that this freedom shall not be used to subject a class, to the harassment of suits without valid or reasonable grounds. Though there is considerable support in judicial dicta for the view that courts cannot create new heads of public policy, see Gherulal Parakh v. Mahadeodas Maiya 1959 Supp (2) SCR 406 at p. 440 : , there is also no lack of judicial authority for the view that the categories of heads of the public policy are not closed and that there remains a broad field within which courts can apply a variable notion of policy as a principle of judicial legislation or interpretation founded on the current needs of the community. See Dennis Lloyd, "Public Policy", (1953), pp. 112-113.


In para 31, the Supreme Court held that public policy does not remain static in any given community. It may vary from generation to generation and even in the same generation. Public policy would be almost useless if it were to remain in fixed moulds for all time.


14. One of the arguments advanced by the respondents in this case, which has found favour with my brother Mr. Justice V.V.S. Rao, is that the remedy available to the petitioners is to go to a civil Court under the provisions of Specific Relief Act. The same argument can be used against the respondents in this case, who, if aggrieved of registration of a sale deed which they had executed, themselves should have gone to the civil Court for such a remedy. I do not agree with my learned brother that the writs are not maintainable, as the remedy to the petitioners is at common law by going to a civil Court. The effect of registration of a cancellation deed is against public policy and it will create a chaos if such deeds are allowed to be registered. The purpose of registration of a document is not only to see that the rights of the vendor are extinguished and rights of the vendee are created, but the purpose is much more than that. It has been consistently held by the Courts that the purpose of registration is to inform and give notice to the world at large that such a document has been executed. Registration of a document is a notice to all the subsequent purchasers or encumbrances of the same property. The doctrine of constructive notice can be extended to others besides subsequent purchasers or encumbrances, as has been held in Tatyarao Venkatrao Vase v. Puttappa Kotrappa 12 Bom. L.R. 940. Therefore, the effect of registration of a sale deed is not effecting the rights of the present petitioners alone, but that registration is a notice to everybody in the world that the property belongs to the petitioners and if such a right is violated by subsequent registration of a cancellation deed by the Sub-Registrar, it cannot be said that writ petitions are not maintainable.


15. If the present practice of cancelling the duly registered sale deeds as prevalent in the State of Andhra Pradesh is approved, then, the whole public policy with regard to registration of documents would get vitiated. Registered sale deeds executed duly, have some sanctity and people at large rely on them to test the title of a particular person to a particular property. If a person executes a sale deed and registers it today and then on the second day gets it cancelled, it will be simply a chaos.


16. The object and purpose of registering the immovable property has been discussed herein above. But we think it appropriate to end this discussion on importance and need of registration of documents relating to immovable property, by referring to a judgment of Supreme Court in State of Himachal Pradesh v. Shivalik Agro Poly Products . In paragraphs 5 and 6 of the judgment, the Supreme Court recorded with approval, the legal position in the United States as is described in Corpus Juris Secundum, Vol. 76, page 525. It also took note of the position in the United Kingdom as is described in Halsbury's Laws of England, Vol. 26, Paras 701 and 705. Paragraphs 5 and 6 of the judgment are reproduced as under-
5. By the very nature of things recognition of rights or title over immovable property and transactions therein give rise to manifold problems. Movable property, depending upon its size or dimension, can be kept in absolute control in possession of its owner and a third party may not be in a position even to know where the same has been kept. But this is not so for an immovable property which lies in the open, attached to the earth at a particular place and the owner may be residing at a faraway place. The owner may give the property on lease or licence to someone else who may get physical possession thereof and enjoy the usufruct thereof. In order to get over this difficulty, a system of registration of title to immovable property has been evolved which is followed in many countries. In the United States the legal position has been described as under in Corpus Juris Secundum, Vol. 76, p. 525:


Systems looking toward the registration of titles to land, as distinguished from the practice under Recording Acts generally of recording or registering the evidence of such title, are in effect by virtue of statute in several of the United States, and the courts are bound by such provisions rather than by any doctrine of the common law which is in contravention thereof. These systems are quite generally known as 'Torrens systems' and the statutes providing therefore as 'Torrens Acts' from the name of the author of the Australian Act of 1857, the underlying principle of which they follow. These systems are limited in their application to titles to lane.


The predominant object of such legislation is the establishment of a method whereby the title to a particular tract or parcel of real estate will always be ascertainable by reference to a register of conclusive veracity, maintained by the designated public official. In other words, the purpose of these laws is to simplify the transfer of real estate, and to render titles thereto safe and indefeasible through the registration of such titles, the bringing together in one place of all of the facts relative to the title to each particular tract which is registered, and the use of certificates which shall conclusively show at all times the state of such title and the person in whom it is vested. The Torrens system serves a broader purpose than merely to notify the record owner of instruments affecting the title; it is notice to all the world of the condition of the title.

6. The position in the United Kingdom has been described in Halsbury's Laws of England, Vol. 26, paras 701 and 705 as under:
701. Legislation referable to centrally maintained register - The legislation relating to registration of the title is directed to the manner in which the law and practice of conveyancing are to be adapted to the use of a centrally maintained register of title to land. As the use of the register has been extended, so the successive statutes mark the historical development of a system of conveyancing, commonly known as registered conveyancing, which approached maturity as part of the real property legislation of 1925.

The result of that legislation, as respects registered land, is to produce on first registration a State-insured record of entitlement to legal estates in land, open to public inspection, which is to be kept up to date in respect of subsequent transactions in accordance with the conveyancing technique for which the legislation provides.


Indirect reference to the earlier legislation is found at the commencement of the Land Registration Act, 1925 in the provision that requires the Chief Land Registrar to continue to keep a register of title to freehold and leasehold land.

705. The Land Registry Act, 1862 - The Land Registry Act, 1862 marked the first attempt to introduce registration of title as distinct from registration of deeds by memorial. Registration was on a voluntary basis and subject to conditions, which included conditions (1) that a marketable title should be shown; (2) that the boundaries of the land should be officially determined and defined as against adjoining owners; and (3) that partial interests should be disclosed and registered. The Act continues to apply to estates registered under it as if the Land Registration Act, 1925 had not been passed, until such time as those estates are registered pursuant to the Act of 1925. The intention that the registration of such estates is to be transferred to the modern register is confirmed by power given to the Lord Chancellor to provide by order that all titles registered under the Land Registry Act, 1862 should be registered under the Land Registration Act, 1925 without cost to the parties interested.

17. To the same effect, reference can also be made to the Supreme Court judgments in Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd. and also in State of Rajasthan v. Basant Nahata .


18. Lastly, it was contended by the respondents that under no provision of law the Sub-Registrar is required to register a document after an enquiry as to the ownership of the property with respect to which a document is sought to be registered. It may be true that there is no such provision in the Registration Act, but if strictly interpreted, then the Registration Act would not empower the registering authority to register any document unless it falls within Section 17 or 18 of the Registration Act. Section 17 mentions those documents which are compulsorily registrable and Section 18 mentions those documents, of which, the registration is optional, but, the whole scheme of the Registration Act shows that it is incumbent upon the Registrar not to register documents that are unlawful. Obviously if a person has no right in the property and his interests in the property had extinguished, if he tries to execute any document for the same property, the document would be illegal. If 'A' executes a document with 'B' that he would kill 'C' on payment of a consideration and if such a document is presented before the Sub-Registrar, is the Sub-Registrar duty bound to register such a document? If 'A' executes a sale deed conveying the title of 'Charminar' or High Court for consideration, is the Sub-Registrar bound to register such a document? Besides, in the present case, the documents themselves show that the property had already been conveyed by a registered document, therefore, no enquiry was needed to be conducted. It is only on mere reading of the document that Sub-Registrar would come to a conclusion that the document, which was sought to be registered, was an illegal document and as such could not be registered. Therefore, the argument of the learned Counsel for respondents that the Sub-Registrar has no authority to make enquiries with regard to the title of the parties who executes the documents, would have to be accepted with exceptions. That may be true, but if the document


the documents, would have to be accepted with exceptions. That may be true, but if the document itself shows that the party who executes the document has no title over the property, the Sub-Registrar is not bound to register such a document. The scheme of the Registration Act shows that documents which create interest or extinguish interest are either compulsorily registrable or are to be registered at the option of the executor. Besides this, what is sought to be revoked by this cancellation deed, is the earlier registered sale deed. One of the documents we are taking as an example is the cancellation deed filed in Writ Petition No. 22257 of 2004, which reads as under-


CANCELLATION OF SALE DEED This Cancellation of Sale Deed is made and executed on this the 20th day of August, 2003 at Hyderabad - A.P., by::
1. DR. P.S.N. MURTHI, S/o. Sri P.V. Venkat Rao, aged about 68 years, Both R/o. 8-2-322, Road No. 7, Banjara Hills, Hyderabad-34.


2. SMT. P. NAGESWARAMMA, W/o. Dr. P.S.N. Murthi, aged about 64 years;
Hereinafter called the "First party/party of the first part".

AND SRI CH. SURENDRA REDDY, S/o. Sri Ch. Veera Reddy, aged about 42 years, R/o. Plot No. 385, Road No. 22, Jubilee Hills, Hyderabad - A.P.

Hereinafter called the "Second party/ party of the Second part".

WHEREAS the party of the first part herein has executed a Registered Sale Deed in favour of the party of the Second part in respect of undivided share of the property bearing M.C.H. 8-2-322, admeasuring 100 Sq. yards, out of total land measuring 800 Sq. yards, situated at Road No. 7, Banjara Hills, Hyderabad - A.P., under a Regd. Sale Deed, Regd. As Document No. 3600 of 1994, Book-I, Volume : 1612, pages : 291 to 304, dated : 30th August, 1994, Regd. at the office of the Sub-Registrar, Khairatabad, Hyderabad-A.P.

AND WHEREAS due to some unavoidable circumstances not specific to mention hereunder the Sale Deed mentioned above executed by the Party of the First part in favour of the party of the Second part; could not be finalized forthe reasons mentioned hereunder:
i. That the sale consideration was not received by the first party from the second party though the same was written as received in the principal Sale Deed.


ii. That it is hereby further declared that the physical possession of the Schedule property still vests with the first party and the same was never delivered to the Party of the Second part;
iii. That the property was not mutated in the name of the second party/Vendee and the Municipal taxes still stand in the name of the First Party/Vendors.

NOW THIS DEED OF CANCELLATION WITNESSET HAS UNDER:
1. THAT with the execution of this deed all the rights, titles, and interests vesting with the party of the Second part shall stand REVOKED & TERMINATED and cancelled, and they shall have no claim of any kind and whatsoever nature on the schedule mentioned property.

2. THAT the parties of the first part now with the execution of these presents shall become the absolute owner of the schedule mentioned property and shall be entitled to enjoy, hold, use & possess the schedule mentioned property in any manner they likes.

SCHEDULE OF THE PROPERTY All that the undivided share of the property bearing M.C.H. 8-2-322 admeasuring 100 Sq. yards, out of total land measuring 800 Sq. yards, situated at Road No. 7, Banjara Hills, Hyderabad - A.P., and bounded as under::
NORTH :: Road No. 3.

SOUTH :: Neighbours Property.

EAST :: Road NO. 7.

WEST :: Neighbours Property.

IN WITNESS WHEREOF the party of the part herein have signed on this Deed of Cancellation of Sale deed with their own free will and consent on the day, month and year above mentioned in the presence of the following witnesses.

WITNESSES::
  1. xxxxxxxxx       1. xxxxxx
2. xxxxxxxxx       2. xxxxxx

FIRST PARTY


FIRST PARTY

19. In this document, it has been stated that all rights, titles and interests vesting with the party of the Second part shall stand revoked and terminated. Party of the Second part is not a party to the deed itself, whereas in the preamble of the deed it is stated that the document is executed between Dr. P.S.N. Murthi and Smt. P. Nageswaramma as the first party and Sri Ch. Surendra Reddy as the second party. The second party had not even executed this document and had not signed the document and registration of this document amounts to nullifying of earlier document registered by the Sub-Registrar and the Sub-Registrar does not have any power whatsoever over a document, which is already registered by him. In this connection, we are fortified in our view by a Division Bench judgment of Punjab and Haryana High Court in Ravindra Pharmaceutical Pvt. Ltd. v. State of Haryana . Since this is a small judgment, we are reproducing the whole judgment-
Order (Annexure P-6) issued by Sub-Registrar, Pehowa, on August 10, 1992, is challenged by the petitioner in this writ petition, as having been issued without any authority of law. The petitioner had taken a loan from the bank-respondent No. 4. Subsequently the bank asked the petitioner to furnish additional security that a document was prepared and submitted to the Sub-Registrar, Pehowa, for registration. It was duly registered. Subsequently this notice (Annexure P-6) was issued, calling upon the petitioner to pay deficiency of Rs. 29,000/- on the aforesaid deed.


2. On notice of motion having been issued, written statement was filed on behalf of the official respondents, inter alia, asserting that the said deed was a mortgage-deed and required more stamp duty, for which notice was issued. Maintainability of the writ petition was also disputed.

3. We have heard counsel for the parties and we are of the opinion that after a documentis registered, the Sub-Registrar ceases to have jurisdiction over the matter. It is only before registering the document that for the reasons to be recorded, the Sub-Registrar could refuse to register it under Section 71 of the Registration Act. Such an order could be appealed before the Registrar under Section 72 of the Act.


4. Apart from that, after registration of the document, the Sub-Registrar could not re-open the matter. It is entirely different as to whether the document was deficiently stamped and could be used as an evidence in a court or not. The Additional Advocate General, Haryana, referred to the provisions of Sections. 31 to 35 of Indian Stamp Act to support his contention that the Collector could determine about the exact amount of stamp duty payable on a document. In our view, no help could be sought from provisions of Sections 31, 33 and 25 of the Indian Stamp Act, as the Collector has not so far taken any action under these provisions. We may observe that such an action can only be taken by the Collector if his opinion is sought by any person by producing a document as to how much stamp-duty is payable on such a document. We take it that in the facts of the present case, after registration of the document the same is with the petitioner and he has not approached the Collector for his opinion under Section 31 of the Indian Stamp Act. No provision of law has been cited before us to cho the Sub-Registrar with power to issue notice for recovery of stamp-duty, if any, after registration of the document. While allowing the writ petition, we quash the notice Annexure P-6.


20. To the same effect, there is another judgment of Supreme Court in Komal Chand v. The State of Madhya Pradesh AIR 1996 M.P. 20. In this case, after registration of a document, the registering authority had ordered an enquiry regarding the value of the property covered by the deed. But the Supreme Court found that after registration of a document, the registering authority would become functus officio and held, "After the registration of the 'Takseemnama' on 31st October 1956, the registering authority had no power to hold an enquiry regarding the value of the property covered by the deed and call upon the executant to pay the deficit stamp duty". The Supreme Court was considering this case in the light of the various provisions of Registration Act and also various provisions of the Stamp Act and it held-
 Neither in the Registration Act nor in the Stamp Act is there any provision giving to the registering officer any power to examine whether an instrument already registered was or was not duly stamped and to impound it. As soon as the Registering Officer registers a document presented to him for registration, the function in the performance of which the document was produced before him is over and thereafter, becomes functus officio having no power under Section 33 to impound the instrument.

The Supreme Court, while coming to this conclusion, relied on an earlier judgment in Government of Uttar Pradesh v. Mohammad Amir Ahmad Khan . That was a case where the question arose whether the Collector had any power to impound an instrument sent to him for adjudication under Section 31 of the Stamp Act. The Supreme Court held that under that Section, the Collector had no such power, as under Section 31 of the Stamp Act, the Collector could only give his opinion as regards the duty, with which, in his judgment, the instrument was chargeable and once that duty was performed by the Collector, he would become functus officio.


21. By registering so-called 'Cancellation of Sale Deeds', what the Sub-Registrars are doing, in effect, is that they are cancelling the registrations made earlier and once a registration is made, the Sub-Registrar has no power under the Registration Act to cancel such a registration, as he became a functus officio.

22. I am also in agreement with the judgment of a learned Single Judge of this Court in Badugu Venkata Durga Rao v. Surneni Lakshmi that a person who has executed a sale deed and got it registered cannot subsequently execute a document unilaterally cancelling the earlier sale deed.

23. For the reasons stated hereinabove, all the writ petitions are allowed.

G. Chandraiah, J.


G. Chandraiah, J.

1. I am in complete agreement with the detailed judgment prepared by my learned brother Justice V.V.S. Rao. However, I would like to reiterate that there is no specific prohibition under the Registration Act, 1908 (for short 'the Act') to register a deed of cancellation. The registering officer can refuse registration in the situations arising under Sections 19 to 22, 32 and 35 and the relevant rules are Rules 26, 58 and 117. But in all other cases where the conditions under the Act i.e., Sections 17 and 18 of the Act are fulfilled, the registering officer is bound to register the document and it is not in dispute that the cancellation deed fulfills the conditions for the purpose of registration. However, the Act does not permit the registering officer to enquire into the title of the party presenting the document for registration and the situations mentioned in the above said provisions under which the registration can be refused are for different purpose and only under those contingencies he can refuse. This Court cannot enlarge the scope of these provisions under the guise of interpretation of statute. Further when there is no prohibition under the Act the registering officer has to register the documents presented for registration in accordance with law and this Court by judicial interpretation cannot impose the same into the statute. It is well settled that what has not been provided for in a statute cannot be supplied by Courts and to do so will amount to legislating which is not the function of the Courts.


2. The main grievance of the petitioners is that by permitting the registration of cancellation deeds, the vendors of immovable property are misusing the provisions and allowing it would amount to abuse of process of law. This contention cannot be countenanced for the reason that admittedly there is no prohibition under the statute and if there is misuse, it is for the legislators to make necessary amendments and this Court under Article 226 of the Constitution of India cannot step into the shoes of the legislators. At this juncture it is necessary to look into the judgment of the Constitutional Bench of the Apex Court in Padma Sundara Rao v. State of T.N. . The facts in the said case reveal that a notification under Section 4(1) of the Land Acquisition Act, 1894 was issued and a declaration under Section 6(1) of the said Act was made and published in Official Gazettee within the period of three years prescribed under the proviso thereto, which was subsequently substituted by Act 68 of 1984. The notification has been quashed by the High Court. The question that arose for consideration before the Apex Court was whether after quashing of the notification under Section 6 of the said Act, fresh period of limitation was available to the State Government to issue another notification under Section 6. It was contended on behalf of the appellant therein that the declaration under Section 6 has to be issued within the specified time and merely because the court has quashed the declaration concerned, an extended time period is not to be provided. In other words, the controversy was whether the court can extend the period of limitation prescribed by the statute on the ground that the earlier notification was quashed by the Court. The Apex Court answered the issue in the negative and made the following observations with regard to interpretation of statutes:


12. The rival pleas regarding rewriting of statute and casus omissus need careful consideration. It is well settled principle in law that the court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The first and primary rule of construction is that the intention of the legislation must be found in the words used by the legislature itself. The question is not what may be supposed and has been intended but what has been said....


13. In D.R. Venkatchalam v. Dy. Transport Commr (1977) 2 SCC 283 it was observed that courts must avoid the danger of a priori determination of the meaning of a provision based on their own preconceived notions of ideological structure or scheme into which the provision to be interpreted is somewhat fitted. They are not entitled to usurp legislative function under the disguise of interpretation.

14. While interpreting a provision the court only interprets the law and cannot legislate it. If a provision of law is misused and subjected to the abuse of process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary. (See Rishabh Agro Industries Ltd. v. P.N.B. Capital Services Ltd. .).

(Emphasis added)

3. Coming to the present case, as stated above, there is no prohibition under the Act for the vendor to get the cancellation deed registered. Therefore, this Court cannot read the same in the statute. However, the aggrieved party can always approach competent civil court. The learned Government Pleader submitted that even if the cancellation deed is registered, as per the instructions given by I.G. under Section 69 of the Act, the registering officer is issuing notice to the earlier purchaser and also endorsing on the cancellation deed that such cancellation deed does not alter the rights. Further some of the parties filed suits and obtained status quo orders.

4. It is also to be seen that there are many disputed questions of fact, which this Court cannot delve under Article 226 of the Constitution of India. Further it is not as though the petitioners are without any remedy, they have alternative remedy before the competent civil court, which will be in a position to adjudicate based on the evidence both oral and documentary available on record and, therefore, when an alternative and efficacious remedy is available, writ jurisdiction cannot be invoked.


5. For the foregoing reasons, the writ petitions deserve to be dismissed as opined by the learned brother Justice V.V.S. Rao.

JUDGMENT OF THE COURT BY MAJORITY The writ petitions are dismissed with no costs.

Since substantial questions of public importance are raised, leave to file appeal to Supreme Court, is granted.


Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959

JUDGMENT Seshachalapati, J.
 1. This is an appeal against the judgment and decree of the learned 1st Additional Subordinate Judge, Vijayawada, in O. S. No. 86 of 1949. The suit was brought by one Sree Raja Kakarlapudi Venkata Sudarsana Sundara Narasayamma Garu, for a declaration that the sale of 9,100 B-Class shares of the Andhra Cement Company Ltd., Vijayawada (3rd defendant) by the Andhra Bank Ltd., Vijayawada (1st defendant) to the Jaipur Sugar Company Ltd., Rayagaddah (2nd defendant), is contrary to law, void and did not affect her right to redeem the pledge effected by her husband in favour of the 1st defendant-Bank and for an injunction restraining the 3rd defendant from recognising and registering the shares in the name of the 2nd defendant.


The case of the plaintiff is that to secure the due payment of certain advances made by the 1st defendant-Bank to her husband amounting to Rs. 45,000 he pledged 9,100 B-Class shares bearing Nos. 143762 to 152S61 of the 3rd defendant Company, that her husband died on 20-4-1948 at Madras and that she was his widow and nearest heir, that in spite of her intimation that she was making arrangements to pay the amounts due_to the 1st defendant Bank and redeem the pledge, the 1st defendant-Bank without notice to her sold the 9100 B-Class shares to the 2nd defendant-company, and that the sale is illegal and void and would not affect her right to redeem the pledge. She, therefore, prayed for a de deration that her right to redeem the pledge remained unaffected and for an injunction restraining the 3rd defendant company from recognising and registering the shares.


2. The 1st defendant-Bank contended in its written statement; first, that inasmuch as on her own admissions the late R. K. N. G. Raju died leaving a will appointing her as an executrix, she was not entitled to 61e a suit without obtaining a probate or producing a succession Certificate; secondly, that her husband, the late R. K, N. G. Raju, hypothecated the shares in question on 22-9-19-17 along with blank transfers duly signed by him and that in that instrument power had specifically been given to the Bank to sell and dispose of the shares either by public auction or private treaty as the Bank might deem fit without reference to him, and thirdly, that the Bank did demand the repayment of the loans and sold them only when there was no repayment and that even if notice of sab is required, the letters written by the Bank constituted sufficient notice.

It was lastly contended that the suit for a mere declaration with regard to the sale of shares was misconceived and not maintainable in law. The 2nd defendant-company while adopting the main contentions of the 1st defendant pleaded that it is a bona fide purchase for value and that the plaintiff had no cause of action against it. The 3rd defendant Company filed a written statement pleading that it had done nothing to prejudice the interests of the parties concerned, that it was not a necessary party to the suit, that the plaintiff was not entitled to any injunction in the manner prayed for, and that it is in no way concerned with the disputes alleged in the plaint.

 3. On those pleadings, the learned Subordinate Judge framed the following issues :
1. What are the terms of pledge?

2. Whether the sale of shares by the 1st defendant to the 2nd defendant is true, valid and binding on the plaintiff?


3. Whether the plaintiff is entitled to the declaration prayed for?

4. Whether the plaintiff cannot file this suit without obtaining probate?

5. Whether the suit is not maintainable as it is for mere declaration?

6. To what relief is the plaintiff entitled?
 4. On issues, 1, 2 and 3, the learned Subordinate Judge, after a review of the evidence held that the only objection of the plaintiff that there was no notice under Section 176 of the Indian Contract Act was not tenable, as in the circumstances of this case it should be held that the pledger waived the right to receive the notice of sale, and that such a waiver was legal and valid. He also held that the sale by the 1st defendant in favour of the 2nd defendant was at the prevailing market rate and that there was no evidence of any dishonesty or fraud on the part of the 1st defendant. On those findings, the learned Subordinate Judge held that the impugned sale of shares by the 1st defendant to the 2nd defendant was binding on the plaintiff.

 5. On issue 4, the learned Subordinate Judge held that inasmuch as on the admissions of the plaintiff herself, her husband the late R. K. N. G. Raju left a will appointing her as an executrix in the absence of a probate or at least the production at the will, it could not be said that the plaintiff had established her prima facie right to maintain th suit as the heir of her husband.

 6. As regards the form of the suit, the learned Subordinate Judge held that a suit for declaration with an ancillary relief for injunction was maintainable in the circumstances of this case. But in view of his findings on issues 1, 2, 3 and 4, the learned Judge dismissed the suit.


7. The plaintiff, filed the present appeal in the High Court of Madras, which eventually was transferred to this Court. During the pendency of the appeal, the appellant died and the present four appellants have been brought on record as her legal representatives.

 8. In this appeal, it has been contended by Mr. Ramachandra Raju, the learned counsel for the ap* pellants that (i) there is no default in the matter of payment of the debt since neither in the instrument of pledge (Ex. B-1), nor in the subsequent letters of demand written by the 1st defendant-Bank was any specific date for the repayment mentioned; (ii) that in any event the sale is invalid, because there was no notice as required by Section 176 of the Indian Contract Act; (iii) that on tile facts of this case there was no waiver of such a notice by the plaintiff either expressly or by conduct amounting to such waiver; and (iv) that the waiver relied on by the learned Subordinafe Judge is only referable to certain expressions in the contract of pledge (Ex. B-1) which, even on the assumption that they amount to waiver are inoperative in law as they would amount to terms which cannot be legally incorporated in the contract, being manifestly opposed to the mandatory terms of Section 176.


9. On the other hand, it has been contended by the learned counsel for the 1st defendant-Bank that (i) on a proper construction of Ex. B-1 coupled with the execution of blank transfers, the transaction would amount to mortgage of shares and that the legal estate in the shares stood transferred to the 1st defendant-Bank, with the result that when on demand the debt was not discharged, it could foreclose and sell the shares and convey a valid title to the purchaser; (ii) that even on the assumption that Ex. B-1 constitutes a pledge of the shares, the letters written by the Bank (Exs. B-5, 6 and 8) are sufficient notice; (iii) that assuming they do not constitute sufficient notice, the transaction of sale cannot be held to be invalid because in Ex. B-1 there is an express and unambiguous waiver of the right to receive such a notice.

It is also argued that on the footing that the sale in favour of the 2nd defendant is invalid and inoperative, the proper remedy for the plaintiff is to sue for redemption of the shares by tendering the money or for damages on the foot of conversion. Lastly, it is argued that the plaintiff, having been appointed, on her own admissions as an executrix under the will of her husband she cannot file the present suit without obtaining a probate and without any reference to the will whatever.


10. For appreciating the contentions raised and debated before us, it would be necessary to state in brief outline the main facts of this case. The husband of the plaintiff was one R. K. N. G. Raju. He held 9100 B-class shares in the Andhra Cement Company bearing share Nos. 143762 to 152861, stated to have been purchased by him at Rs. 12/-per share. He had an over-draft account with the 1st defendant, Andhra Bank Ltd., both in his personal capacity and as partner of Raja Industrial and Chemical Agencies. On those two accounts the 1st defendant-Bank made several advances to him, on various dates in 1947 totalling upto a sum of Rs. 45,000. In order to secure the due payment of the amounts, R. K. N. G. Raju executed an instrument of security on 22-9-1947.


Along with the said instrument, 9100 B-class shares were delivered to the 1st defendant Bank together with blank share transfer forms duly signed by R. K. N. G. Raju. During his life time certain payments were made to the Bank. R. K. N. G. Raju died at Madras on 20-4-1948. On 25-11-1948, the counsel for the plaintiff wrote to the 1st defendant-bank a communication (Ex. B-2) stating that R. K. N. G. Raju diet! at Madras on 20-4-1948, leaving a will appointing his wife as the executrix, and that he was instructed to take steps to secure adequate iegal representation tp the estate of the deceased. In that connection the counsel requested the 1st defendant-Bank to furnish the particulars of the account of the late R. K. N. G. Raju with the 1st defendant-bank, and also the amount due to the Bank in respect of over-draft transactions covered by tide pledge of 9100 B-class shares in the Andhra Cement Company.


la reply to that communication from the counsel, the 1st defendant-Bank wrote a letter (Ex. B-3) dated 8-12-1948 that all necessary particulars were furnished to the 1st plaintiff and advised the counsel to obtain the information from her. By a letter of even date (Ex. B-4) the Bank wrote to the plaintiff, the widow of R. K. N. G. Raju, that with respect to the over-draft accounts by her husband and the pledge of 9100 B-Class shares in the Andlira Cement Company, a sum of Rs. 37,216-8-0 was due. The Bank requested that arrangements might be made for the payment of the debts and taking the delivery of the said shares.

 11. On 17-12-1948, the Bank wrote a letter (Ex. B-5) to the plaintiff giving particulars of the advances made to her husband and the amounts due and requesting her as the legal heir of the late R. K. N. G. Raju to take immediate steps to repay the outstanding amounts due to the Bank. This letter was addressed to the plaintiff C/o the Andhra Cement Company Ltd. This letter obviously did not reach the plaintiff as it was returned unserved. Thereupon the Bank wrote another letter (Ex. B-61 dated 5-1-1949 to her address at Rajahrnundry, giving the particulars of the loans and the balance due and requiring her to take immediate steps for repayment. It is not in dispute that this letter was Received by the plaintiff.


12. On 7-1-1949, the counsel of the plaintiff from Madras wrote to the Bank asking for the particulars asked for hy him on the assumption that the widow of the deceased would have already authorised the Bank to disclose the information. Accordingly the 1st defendant-Bank wrote to the counsel a letter (Ex. B-8) dated 9-2-1949. There was no reply by the plaintiff to the 1st defendant-Bank's letter dated 5-1-1949.

 13. The 1st defendant-Bank thereupon would seem to have made enquiries with Somayajulu and Co., Slock and Share Brokers, Madras as to the market price of the B-class shares of the Andhra Cement Company. By a letter dated 10-2-1949, the firm advised the 1st-defendant-Bank that it would be possible to sell the Andhra Cement Company Ltd.'s B-class shares round-about Rs. 6-4-0 per share,


14. On 25-3-1949, the 1st defendant-Bank sold the 9198, B-class shares of the Andhra Cement Company Ltd., at Rs. 6-5-0 per share to the 2nd defendant the Jaipur Sugar Company Ltd., and had also forwarded to them 5 transfer deeds signed by R. K. N. G. Raju for their signatures. On the same day the 1st defendant-Bank wrote a letter (Ex. B-12) to the plaintiff informing her that since no arrangements had been made by her for the adjustment of the loans, the Bank decided to realise the amounts due by the sale of the securities pledged and accordingly sold them at Rs. 6-5-0 per share. On 30-3-1949, a telegram (Ex. B-13) was sent by the plaintiff to the 1st defendant-Bank to the effect that the sale of 9100 B-class shares was illegal and that the Bank was liable in damages.

 15. On 5-4-1949, the counsel for the plaintiff sent a registered notice (Ex. B-14) to the 1st defendant-Bank with a copy to the Andhra Cement Company Ltd., (3rd defendant) stating that he confirmed the telegram sent by the plaintiff on 30-4-1949, and that the sale of the shares was without notice to his client and, therefore, invalid and not binding on her.

 16. The present action was then instituted by the plaintiff on or about 20-4-1949 for the reliefs already mentioned.


17. Before dealing with the main case of the appellants, we consider it convenient to deal at the outset with a contention advanced by Mr. Somasundaram, that Ex. B-1 is not an instrument of pledge, hut a mortgage. The relevant portion of the instrument (Ex. B-1) may he extracted :
 "That failing payment on demand to you by us of the amount of such advances you shall be entitled, but not hound to sell or otherwise dispose of all or any of the said moveahle properties, marketable securities and goods by public auction or private contract in such manner and upon such term and subject to such conditions as you may think fit without any reference to us or obtaining our consent and the proceeds of sale or disposal shall be applied first in payment of all costs, charges and expenses of and incidental to such sale or disposal and the enforcement of the pledge and charge in your favour hereby created."
 18. Under the Indian Law, unlike in England a share is not a mere chose in action. Section 137 of the Transfer of Property Act clearly states that Chapter VIII of the Act dealing with transfer of actionable claims will not apply to stocks, shares or debentures, or to instruments which are for the time being by law or custom, negotiable. Or to any mercantile documents of title of goods. Section 2 (7) of the Sale of Goods Act defines goods as meaning 'every kind of moveable property other than shares etc.' With respect, therefore, to this class of moveable property there can be a mortgage or a pledge. This distinction between the two is clearly brought out in the following passage in Halsbury's Laws of England, Hailsham Edn. (2nd Edn.) para 300 page 226 of Vol XXIII.


"A mortgage of personal chattels is essentially different from a pledge or pawn under which money is advanced upon the security of chattels delivered into the possession of the lender, such delivery of possession being on essential element of the transaction. A mortgage conveys the whole legal interest in the chattels; a pledge or pawn conveys only a special properly, leaving the general property in the pledger or pawnor; the pledgee or pawnee never has the absolute ownership of the goods, but has a special property in them coupled with a power of selling and transferring them to a purchaser on default of payment at the stipulated time, if any, or at a reasonable time after demand and non-payment if no time for payment is agreed upon."
 19. The essential distinction, therefore, between a pledge and a mortgage is that unlike a pledgee a mortgagee acquires general property in the thing mortgaged subject to the right of redemption of the mortgagor. In other words, the legal estate in the goods mortgaged passes on to the mortgagee. But a pledgee has only the special property in the goods pledged, namely, the right of retainer of the goods as security, and in case of default he must either bring a suit against the pawnor or sell the goods after giving a reasonable notice.