# Vinod Kumar Jalaun v. Kailash Jaiswal

- **Citation:** (2025) 8 ILRA 491
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-08-07
- **Case number:** First Appeal No. 237 of 2006
- **Bench:** Shekhar Kumar Yadav
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/vinod-kumar-jalaun-v-kailash-jaiswal-53716
- **Pages:** 13

## Headnote

Rahul Sripat, Abhishek Mishra, Asheesh
Mani Tripathi, Ashok Mani Tripathi, C.K.
Parekh, D.V. Jaiswal, H.P. Dubey, K.N.
Mishra, Manish Goyal, Nipun Singh, Pankaj
Dubey, Pramod Kumar Jain, Rakesh Pande,
Raunak Parekh, Ravindra Kumar Tripathi,
Satish Mandhyan

ISSUE FOR CONSIDERATION
Whether the sale deed was rightly declared
ineffective due to dishonour of the cheque and
the specific clause in the deed?
Whether the sale deed could be considered a
concluded and enforceable contract despite
non-payment of substantial sale consideration?

HEADNOTES
Civil Law - Code of Civil Procedure, 1908 -
Section 96, Order 41 Rule 27 - Transfer of
Property Act, 1882 - Sections 54, 55(4)(b)
492 INDIAN LAW REPORTS ALLAHABAD SERIES
- Indian Contract Act, 1872 - Section 25 -
Negotiable
Instruments
Act,
1881
-
Section 138 - Specific Relief Act, 1963 -
Section 31- Defendant's First Appeal under
Section 96 CPC - Challenging the Trial court's
judgment dated 07.03.2006 in Original Suit -
suit filed questioning validity and enforceability
of a sale deed - allegedly rendered ineffective
due to dishonour of a post-dated cheque
forming part of the sale consideration - Plaintiff
sought declaration that the sale deed was null
and void due to non-payment of Rs. 45,00,000/-
out of Rs. 46,00,000/- consideration, and sought
permanent injunction against the defendant
from interfering with possession - trial court
granted declaratory relief and injunction but
denied cancellation for want of court fees -
defendant filed instant Appeal and applications
under Order 41 Rule 27 CPC to introduce
additional
evidence
-
plaintiff
also
filed
application under same provision to submit a
gift deed executed during appeal - Defendant
challenged the trial court's findings, arguing the
sale deed remained valid despite cheque
dishonour and that he was ready to perform his
part - Court observed that - the sale deed was
rightly declared ineffective due to dishonour of
cheque, as per explicit clause; - Defendant's
failure to pay consideration and attempt to
alienate property showed bad faith; - Possession
was never transferred; - only Rs. 1 lakh paid out
of Rs. 46 lakh - Applications under Order 41
Rule 27 CPC were belated and inadmissible -
Sale deed without consideration is void under
Section 25 of the Indian Contract Act - court
held that no illegality or perversity in trial court's
judgment - parties are bound by contractual
terms - no enforceable contract existed due to
lack of consideration - consequently, Appeal
stands dismissed and trial court's judgment
affirmed. (Para - 26, 27, 31, 32, 34, 36, 38, 39,
44, 51, 54)
Appeal Dismissed. (E-11 )

CASE LAW CITED

Kaliaperumal v. Rajagopal, (2009) 4 SCC 193) -
Motilal Sahu v. Ugrah Narain Sahu, Patna HC,
22 Dec 1949) - Union of India Vs Ibrahim Uddin
and Another, (2012) 8 SCC) - Janak Dulari Devi
& Anr. v. Kapildeo Rai & Anr., (2011) 6 SCC
555) - Anil Kumar Harda v. Smt. Suman Bala
[AIR 1980 Delhi (DB)].
LIST OF ACTS
Code of Civil Procedure, 1908 - Transfer of
Property Act, 1882 - Indian Contract Act, 1872 -
Negotiable Instruments Act, 1881 - Specific
Relief Act, 1963.

LIST OF KEYWORDS
First Appeal - Sale Deed - Specific contractual
condition - Cheque Dishonour - Permanent
Injunction - Additional Evidence - Possession -
insufficient - essential element of Consideration
- Void Contract - contractual consequence -
intention of the parties - illegality - perversity -
misapplication of law.

CASE ARISING FROM
Original Suit No. 570 of 2004, filed by Plaintiff
before
the
Civil
Judge
(Senior
Division),
Gorakhpur - Challenging the validity of the sale
deed dated 16.06.2003 executed in favour of
Defendant.

APPEARANCE OF PARTIES
Counsel for Appellant(s): Shri Anil Tiwari (Sr.
Adv.)
Counsel for Respondent(s): Shri Manish Goyal
(Sr. Adv.) assisted by Mr. Nipun Singh

## Text

_Characters 0–39,883 of 44,042. This is a partial read: ask again with offset=39883 for what follows._

8 All. Vinod Kumar Jalaun Vs. Kailash Jaiswal
491
of the alleged Will of his father and has
also sought that the exparte decree dated
18.02.2010 passed in S.C.C Suit No.48 of
2009 (Akil Ahmad & others Vs. Nora
Fransis) be declared null and void. It is
apparent that the rights of the plaintiff are
to be decided in OS no.74 of 2025, which is
pending for disposal.

9. It is also pertinent to mention that as
per Section 24 of Provincial Small Cause
Courts Act, 1887 (PSCC Act), only an
order specified in clause (ff) or clause (h)
of Section 104 (1) CPC, 1908 made by
Court of Small Causes, is appealable.

10. Section 25 of the Act, 1887 as
applicable in the State of Uttar Pradesh,
reads as under:-

"25. Revision of decrees and
orders of Courts of Small Causes.- The
District Judge, for the purpose of satisfying
himself that a decree or order made in any
case decided by a Court of Small Causes
was according to law, may of his own
motion, or on the application of an
aggrieved party made within thirty days
from the date of such decree or order, call
for the case and pass such order with
respect thereto as he thinks fit."

"Provided that in relation to any
case decided by a District Judge or
Additional District Judge exercising the
jurisdiction of a Judge of Small Causes, the
power of revision under this section shall
vest in the High Court."

11. It is apparent that the impugned
order is not an appealable order under
Section 24 of the P.S.C.C. Act and is only a
revisable order under Section 25 of the
P.S.C.C. Act, but the objector has filed
First Appeal under Section 96 CPC, which
is clearly not maintainable.

12.
Accordingly,
the
objection
regarding maintainability of the instant
appeal is upheld and consequently, the
instant appeal is dismissed as being not
legally maintainable.
----------
(2025) 8 ILRA 491
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 07.08.2025

BEFORE

THE HON'BLE SHEKHAR KUMAR YADAV, J.

First Appeal No. 237 of 2006

Vinod Kumar Jalaun ...Appellant
Versus
Kailash Jaiswal ...Respondent

Counsel for the Appellant:
Arvind
Srivastava,
Akhilanand
Mishra,
Anand Srivastava

Counsel for the Respondent:
Rahul Sripat, Abhishek Mishra, Asheesh
Mani Tripathi, Ashok Mani Tripathi, C.K.
Parekh, D.V. Jaiswal, H.P. Dubey, K.N.
Mishra, Manish Goyal, Nipun Singh, Pankaj
Dubey, Pramod Kumar Jain, Rakesh Pande,
Raunak Parekh, Ravindra Kumar Tripathi,
Satish Mandhyan

ISSUE FOR CONSIDERATION
Whether the sale deed was rightly declared
ineffective due to dishonour of the cheque and
the specific clause in the deed?
Whether the sale deed could be considered a
concluded and enforceable contract despite
non-payment of substantial sale consideration?

HEADNOTES
Civil Law - Code of Civil Procedure, 1908 -
Section 96, Order 41 Rule 27 - Transfer of
Property Act, 1882 - Sections 54, 55(4)(b)
492 INDIAN LAW REPORTS ALLAHABAD SERIES
- Indian Contract Act, 1872 - Section 25 -
Negotiable
Instruments
Act,
1881
-
Section 138 - Specific Relief Act, 1963 -
Section 31- Defendant's First Appeal under
Section 96 CPC - Challenging the Trial court's
judgment dated 07.03.2006 in Original Suit -
suit filed questioning validity and enforceability
of a sale deed - allegedly rendered ineffective
due to dishonour of a post-dated cheque
forming part of the sale consideration - Plaintiff
sought declaration that the sale deed was null
and void due to non-payment of Rs. 45,00,000/-
out of Rs. 46,00,000/- consideration, and sought
permanent injunction against the defendant
from interfering with possession - trial court
granted declaratory relief and injunction but
denied cancellation for want of court fees -
defendant filed instant Appeal and applications
under Order 41 Rule 27 CPC to introduce
additional
evidence
-
plaintiff
also
filed
application under same provision to submit a
gift deed executed during appeal - Defendant
challenged the trial court's findings, arguing the
sale deed remained valid despite cheque
dishonour and that he was ready to perform his
part - Court observed that - the sale deed was
rightly declared ineffective due to dishonour of
cheque, as per explicit clause; - Defendant's
failure to pay consideration and attempt to
alienate property showed bad faith; - Possession
was never transferred; - only Rs. 1 lakh paid out
of Rs. 46 lakh - Applications under Order 41
Rule 27 CPC were belated and inadmissible -
Sale deed without consideration is void under
Section 25 of the Indian Contract Act - court
held that no illegality or perversity in trial court's
judgment - parties are bound by contractual
terms - no enforceable contract existed due to
lack of consideration - consequently, Appeal
stands dismissed and trial court's judgment
affirmed. (Para - 26, 27, 31, 32, 34, 36, 38, 39,
44, 51, 54)
Appeal Dismissed. (E-11 )

CASE LAW CITED

Kaliaperumal v. Rajagopal, (2009) 4 SCC 193) -
Motilal Sahu v. Ugrah Narain Sahu, Patna HC,
22 Dec 1949) - Union of India Vs Ibrahim Uddin
and Another, (2012) 8 SCC) - Janak Dulari Devi
& Anr. v. Kapildeo Rai & Anr., (2011) 6 SCC
555) - Anil Kumar Harda v. Smt. Suman Bala
[AIR 1980 Delhi (DB)].
LIST OF ACTS
Code of Civil Procedure, 1908 - Transfer of
Property Act, 1882 - Indian Contract Act, 1872 -
Negotiable Instruments Act, 1881 - Specific
Relief Act, 1963.

LIST OF KEYWORDS
First Appeal - Sale Deed - Specific contractual
condition - Cheque Dishonour - Permanent
Injunction - Additional Evidence - Possession -
insufficient - essential element of Consideration
- Void Contract - contractual consequence -
intention of the parties - illegality - perversity -
misapplication of law.

CASE ARISING FROM
Original Suit No. 570 of 2004, filed by Plaintiff
before
the
Civil
Judge
(Senior
Division),
Gorakhpur - Challenging the validity of the sale
deed dated 16.06.2003 executed in favour of
Defendant.

APPEARANCE OF PARTIES
Counsel for Appellant(s): Shri Anil Tiwari (Sr.
Adv.)
Counsel for Respondent(s): Shri Manish Goyal
(Sr. Adv.) assisted by Mr. Nipun Singh

(Delivered by Hon'ble Shekhar Kumar
Yadav, J.)

1. Heard Sri Anil Tiwari, learned
Senior
Counsel
for
the
defendant/Appellant,
and
Mr.
Manish
Goyal, learned Senior Counsel assisted by
Mr. Nipun Singh, learned counsel for the
plaintiff/Respondent at great at length.

2. This First Appeal under Section 96
of the Code of Civil Procedure has been
filed by the appellant, Vinod Kumar Jalan
(hereinafter "the defendant"), challenging
the judgment and decree dated 07.03.2006
passed by the learned Civil Judge (Senior
Division), Gorakhpur, in Original Suit No.
570 of 2004. By the impugned judgment,
the trial court declared the sale deed dated
16.06.2003 to be ineffective and granted a
permanent
prohibitory
injunction
8 All. Vinod Kumar Jalaun Vs. Kailash Jaiswal
493
restraining the defendant from interfering
with the plaintiff's possession over the
disputed property.

3. During the course of final hearing
of the present appeal, learned counsel for
the defendant/appellant has filed one
application under Order 41 Rule 27 of CPC
seeking some additional documents to be
brought on record, which according to the
appellant
were
necessary
for
the
adjudication of the present controversy,
upon which the matter was adjourned by
giving opportunity to plaintiff/respondent
to file any affidavit, if required. On which
learned counsel for the plaintiff/respondent
submitted that he had already filed reply to
one of the application filed under Order 41,
Rule 27 of CPC and same may be read as
reply to the said application.

4. During argument, this Court was
further informed that another application
under Order 41 Rule 27 of CPC had also
been filed by the defendant/appellant, also
bringing on record certain documents for
the
adjudication
of
the
controversy
involved in the present matter, to which, a
detailed counter affidavit had already been
filed by the plaintiff/respondent, but record
reflects that no rejoinder to the said counter
was filed even despite giving various
opportunities. This Court finds that another
application under Order 41 Rule 27 of CPC
has
also
been
filed
by
the
plaintiff/respondent for bringing on record
the gift deed dated 01.06.2011, which was
executed during the pendency of the
present appeal by the sole defendant in
favour of his son.

5. This Court would deal the merits of
the applications under Order 41 Rule 27 of
CPC filed by the defendant/appellant at the
end of this judgment.

FACTS OF THE CASE

6. The Plaintiff, Kailash Jaiswal,
admittedly,
was
the
owner
and
in
possession of Plot No. 125 area 1084.39 sq.
meters land situated at Mauja Araji
Chhavani, Tappa-Qasba Pargana Haveli,
Tehsil and District Gorakhpur, instituted
Original Suit No. 570 of 2004 for a
declaration that the sale deed executed by
him in favour of the Defendant on
16.06.2003 for a property situated in
Gorakhpur be declared as null, void, and
ineffective, and for a permanent injunction.

7. The Plaintiff's case was that the
property was agreed to be sold for Rs.
46,00,000/-. Out of this, Rs. 1,00,000/- was
paid in cash, and for the balance of Rs.
45,00,000/-, a post-dated cheque (No. SPI
MC BJ A.B. 797760 dated 30.09.2003,
drawn on Oriental Bank of Commerce,
Gorakhpur) was issued by the Defendant. A
crucial condition was incorporated in the
sale deed that if the said cheque was
dishonoured for any reason, the sale deed
would
automatically
be
considered
cancelled ("वाजा हो लक मुस्तरी मजकूर द्वारा लदया गया
उपरोक्त चेक यलद लकन्हीं कारणों से भुगतान नहीं होता तो ऐसी सूरत
में बैनामा लनरस्त समझा जायेगा।"). The Plaintiff
contended that the cheque dated 30.09.2003
was dishonoured due to insufficient funds.
At the Defendant's request, the date on the
cheque was altered by the Defendant to
07.04.2004, and he signed the alteration.
This
re-validated
cheque
was
again
presented and dishonoured on 08.04.2004,
and subsequently again on 08.07.2004, due
to insufficient funds. The Plaintiff asserted
that due to the non-payment of the
consideration as per the agreed terms, and
in light of the specific clause, the sale deed
had
become
automatically
null
and
ineffective, and he continued to be the
owner in possession. The Defendant,
494 INDIAN LAW REPORTS ALLAHABAD SERIES
however, allegedly threatened to alienate or
encumber the property based on the said
sale deed.

8. The Defendant, in his written
statement, admitted the execution of the
sale deed but contended that physical
possession of the property was not
delivered to him. He claimed that the
Plaintiff had assured him that the cheque
would not be presented for payment until
physical possession was handed over and
mutation of names was effected. The
Defendant stated his readiness to pay the
balance
amount
of
Rs.
45,00,000/-
provided the Plaintiff delivered possession
of the suit property.

9. Perusal of written statement shows
the admission of the defendant/appellant,
which is also not disputed by the counsel of
appellant/defendant
that
entire
sale
consideration had not been paid and the
delivery of possession has also not been
given by the plaintiff/respondent to the
defendant/appellant.

10. In order to prove the case, the
plaintiff/respondent himself appeared as
PW-1 and similarly, defendant/appellant
appeared
as
DW-1.
This
court
has
examined the evidence of PW-1, which is
as under:-

Plaintiff-respondent Kailash Jaiswal,
who examined himself as P.W.1 in his oral
evidence, clearly stated that the cheque was
issued by the defendant-appellant towards sale
consideration but the cheque was dishonoured
by the bank when it was tendered for
encashment on the ground that there was
insufficient fund in the account of defendantappellant. It was also stated by the plaintiffrespondent that the defendant-appellant re-
validated the cheque by mentioning new date
and singed the same and was trying to alienate
the property on the basis of sale deed, which
was void ab-initio.

11. The attention of this court was
further invited to the cross examination of
defendant/appellant, which is as under:-

In cross-examination, the question
was put to the P.W.1 on behalf of defendantappellant that whether he was aware of the fact
that the name of defendant-appellant could not
be mutated over the property in Revenue
Record on account of reason that the property
was found to be government property. The P.W.
1 specifically replied that he has got property
freehold in his name and freehold deed
plaintiff- respondent in favour had never been
subjected
to
any
proceeding.
Therefore,
findings the order of the Tehsildar is of no
bearing. The plaintiff- respondent also stated
that he has already filed suit for ejectment
against the sales tax department in the court of
small cause and the order of the ejectment has
already been passed in the year 2003.

12. The learned Civil Judge, Senior
Division, Gorakhpur, after framing issues
and considering the evidence on record,
found, inter alia, that the sale deed dated
16.06.2003 had become ineffective due to
the dishonour of the cheque for Rs.
45,00,000/-,
based
on
the
specific
condition in the sale deed. The Plaintiff
was entitled to an injunction as the sale
deed was ineffective and the Defendant
was not in physical possession. The suit
was maintainable and the court had
jurisdiction. The trial court accordingly
declared the sale deed ineffective and
restrained the Defendant from interfering
with the Plaintiff's possession. However,
the relief of formal "cancellation" of the
sale deed was not granted as the
appropriate court fee for such relief under
Section 31 of the Specific Relief Act had
not been paid by the Plaintiff.
8 All. Vinod Kumar Jalaun Vs. Kailash Jaiswal
495

13. It is an admitted fact that the
physical
possession
of
the
disputed
property was never handed over to the
Defendant/appellant
and
has
always
remained with the Plaintiff/respondent.

14. The trial court had meticulously
examined the entire controversy involved
in the present matter and after considering
the entire circumstances came to a definite
opinion that the recital in the sale deed is
decisive to gather the real intention of the
parties as to whether it was mandatory to
get the sale deed completed once the entire
sale consideration is paid or as to whether
the
plaintiff/respondent
could
have
recovered the sale consideration at later
stage.

15. Heard learned counsel for the
parties and perused the record.

ARGUMENTS IN APPEAL

On behalf of Appellant

16. It is contended by learned
counsel for the defendant/appellant that
the impugned judgment is contrary to the
provisions of the Transfer of Property
Act (TPA) and the Indian Contract Act.
The non-compliance with the condition
in the sale deed regarding cheque
payment did not render the sale deed
void. The Appellant always intended to
comply with the conditions, and the
Trial Court made perverse findings,
ignoring the Plaintiff's conduct in not
delivering
possession.
Material
documents were ignored by the court
below, and there was no demand for the
amount due by the Plaintiff. It is further
submitted that the judgment is contrary
to Section 55(4)(b) and Section 54 of the
Transfer of Property Act, arguing that
the Appellant was always ready and
willing to enter into the sale agreement.

17. The finding that the sale deed is
void upon dishonor of the cheque is
misconceived, as it was open to the
Plaintiff to recover the amount under
Section
138
of
the
Negotiable
Instruments Act, which in fact he had
already filed and the same has also been
dismissed for want of prosecution.
Payment of consideration was complete
upon the Plaintiff's receipt of the cheque.
The judgment was passed on surmises
and conjectures and is perverse, based
on non-application of mind. He further
vehemently relied upon section 55(4)(b)
of the Transfer of Property Act. Section
55(4) of the Transfer of Property Act is
being reproduced hereunder:-

(4) The seller is entitled-

(a) to the rents and profits of the
property till the ownership thereof passes
to the buyer;

(b) where the ownership of the
property has passed to the buyer before
payment of the whole of the purchasemoney, to a charge upon the property in the
hands of the buyer, [any transferee without
consideration or any transferee with notice
of the non-payment,] for the amount of the
purchase-money, or any part thereof
remaining unpaid, and for interest on such
amount or part [from the date on which
possession has been delivered].

18. On the contrary, counsel for the
plaintiff/respondent has vehemently argued
that in the present appeal, only a very
limited and short question has to be
considered for the adjudication of the real
controversy involved between the parties as
496 INDIAN LAW REPORTS ALLAHABAD SERIES
to whether if the sale consideration has not
been passed in toto, the sale deed would be
treated as cancelled or null and void or the
plaintiff would be at liberty to recover the
same by any means or the sale deed would
be treated as concluded.

19.
Learned
counsel
for
the
plaintiff/respondent further submitted that
the sale deed explicitly provides for its
automatic cancellation/ineffectiveness upon
the dishonor of the cheque for the balance
consideration.
The
cheque
for
Rs.
45,00,000/- was repeatedly dishonored due
to
insufficient
funds,
validating
the
condition.
Since
the
entire
sale
consideration was not paid, the sale deed
automatically became null and ineffective
as per its agreed terms stipulated in the sale
deed. It is further submitted that possession
of the property was never transferred and
remains with the Plaintiff. The Defendant's
claim linking payment to possession is
false, and his conduct demonstrates no
bona fide intention to pay the remaining
amount.

20. It is further submitted that the
Plaintiff's applications under Order 41 Rule
27 of CPC to bring on record a subsequent
gift deed dated June 1, 2011, executed by
the Defendant in favor of his son during the
appeal's
pendency,
demonstrates
the
Defendant's ongoing attempts to alienate
the property despite the Trial Court's
declared
the
original
sale
deed
as
ineffective.

21.
This
court
considered
the
arguments raised by both the parties in
detail and also perused the judgment of trial
court in its entirety by further perusing the
evidence of both the parties and after
considering all the above aspect has come
to a definite conclusion that for the purpose
of adjudication of the present appeal,
following point of determination is required
to be formulated for determination:-

i. Whether the sale deed dated
16.06.2003 was rightly declared ineffective
due to the dishonour of the cheque and the
specific clause in the deed?

ii. Whether the trial court rightly
granted a permanent injunction in favour
of the plaintiff?

iii. Whether the sale deed could
be considered a concluded and enforceable
contract
despite
non-payment
of
the
substantial sale consideration?

DISCUSSION
AND
ANALYSIS

Issues I & III: These issues
relate to the effect of the Specific
Contractual Condition and Concluded
Contract, hence they are being decided
together: -

22. On going through the judgement
of the Trial Court, it is abundantly clear
that Trial Court correctly centered its
decision on the explicit condition within
the sale deed dated June 16, 2003. This
clause unequivocally stipulated that if the
cheque for Rs. 45,00,000/- was dishonored,
the
sale
deed
would
be
deemed
automatically cancelled/ineffective.

23. It is a well-settled principle,
affirmed by the Hon'ble Supreme Court on
numerous occasions, that courts must
ordinarily give effect to the terms of a
contract mutually agreed upon by the
parties. Parties possess the autonomy to
define the terms of their agreement and the
consequences of a breach thereof, provided
8 All. Vinod Kumar Jalaun Vs. Kailash Jaiswal
497
such terms are not unlawful or contrary to
public policy. The Hon'ble Supreme Court
has consistently held that the terms of a
contract, when clear and unambiguous,
must be enforced as they reflect the will of
the parties.

24.
In
the
present
case,
the
consequence of the dishonor of the cheque
was unequivocally stated, and the Trial
Court rightly upheld this contractual term.
The transaction, by virtue of this specific
clause, partook the nature of a conditional
sale, where its ultimate efficacy was
dependent on the honouring of the cheque.
The Hon'ble Supreme Court in catena of
decisions has recognized the validity of
contracts
with
conditions
subsequent,
where the failure of a specified condition
can lead to the termination or invalidation
of rights accrued thereunder.

25. It is trite law that the intention of
parties, as reflected in the contractual
document, is decisive in determining
whether a contract is conditional. The
Hon'ble Supreme Court in Kaliaperumal v.
Rajagopal [(2009) 4 SCC 193] affirmed
that title does not pass if the sale deed is
conditional
upon
payment
and
such
payment is not made. Perusal of the record
itself discloses that in the alleged sale deed
at Page 43/44 it has been specifically
mentioned that "यलद चेक का भुगतान लकन्ही कारणों से
नहीं होता है तो ऐसी सूरत में बैनामा स्वतः लनरस्त सम्झा जायेगा".
In the present case, the sale deed contained
an express stipulation that dishonour of the
cheque
would
result
in
automatic
cancellation of the deed. This clause was
clear, unequivocal, and mutually agreed
upon.

26. The Trial Court meticulously
analyzed the conduct of the Appellant,
noting that the cheque was repeatedly
dishonoured for "insufficient funds." The
failure to ensure sufficient funds despite the
extension of the cheque's validity, which
was done at the Appellant's instance. The
Appellant's attempt to get the property
mutated in his name vide application dated
June 17, 2003, even before the original due
date of the cheque and without ensuring
payment.
This
application
was
subsequently rejected by the Tehsildar on
October 3, 2003, as "अदम हकीकी का है",
strongly suggesting an intent to secure
rights without fulfilling the corresponding
obligation. The Trial Court pertinently
observed that the Appellant had ample
opportunity to pay the amount, even after
the suit was filed, or could have deposited
the amount with the Registrar or the Court,
but failed to do so. The Trial Court's
conclusion that the Appellant's assertion of
being
ready
to
pay
was
a
"भुलावा"
(deception) is well-founded on the evidence
and
consistent
with
the
Appellant's
conduct, which this Court finds no reason
to interfere with.

27. The Appellant's argument that
non-payment was due to non-delivery of
possession is not convincing in the face of
the specific contractual term. Payment of
consideration, or at least ensuring the
cheque would be honored, was a primary
obligation of the Appellant, the failure of
which directly led to the contractual
consequence of the sale deed becoming
ineffective. The Trial Court rightly noted
that generally, payment is made before or
at the time of registration. The special
arrangement involving a post-dated cheque
was explicitly tied to the validity of the
deed itself. The argument that the mere
receipt of a cheque amounts to complete
payment
of
consideration
is
legally
untenable; a cheque is a conditional
payment, and if dishonored, the underlying
498 INDIAN LAW REPORTS ALLAHABAD SERIES
debt or obligation remains unsatisfied.
While it is true that mere non-payment of
consideration after registration may not
always automatically invalidate a sale, and
the seller may have a charge for unpaid
price under Section 55(4)(b) of the Transfer
of Property Act, this general principle does
not preclude parties from agreeing to a
more stringent consequence, such as the
sale itself becoming ineffective or being
deemed cancelled, if a foundational term
regarding payment is breached. The nonpayment of Rs. 45,00,000/- out of Rs.
46,00,000/- was not a minor part of the
consideration, and its non-payment, linked
to the specific clause, strikes at the root of
the transaction.

28. In Motilal Sahu v. Ugrah Narain
Sahu
and
Others
(decided
on
22
December 1949), the Patna High Court
held that although a sale deed was executed
by the defendant in favour of the plaintiffs,
the transaction did not operate to transfer
title or possession because the stipulated
consideration was never paid. The Court
found that the parties intended the sale to
be conditional upon payment, and in the
absence of such payment, the execution of
the deed alone was insufficient to effect a
transfer of ownership. Consequently, the
High Court restored the trial court's decree
dismissing the suit, holding that no right to
possession or title accrued to the plaintiffs
under the incomplete transaction.

29. In the case of Janak Dulari Devi
& Anr. v. Kapildeo Rai & Anr., (2011) 6
SCC 555, under para 13 it has been held
that a registered sale deed may not transfer
title where full consideration is not paid.
The relevant extract is quoted hereunder:

"... if the sale deed expressly or
by necessary implication provides that title
will not pass until consideration is paid in
full and registration receipt is handed over,
then the title does not pass upon execution
and registration alone."

30. Learned counsel appearing for the
respondent would submit that the sale deed
was registered by the recital of the engrafts
that "यलद चेक का भुगतान लकन्ही कारणों से नहीं होता है तो ऐसी
सूरत में बैनामा स्वतः लनरस्त सम्झा जायेगा" then in case
the cheques are dishonoured the sale deed
would be cancelled, therefore, if the
cheques which were tendered dishonoured
which automatically would cancel the sale
deed as per the intention of the parties.
Learned counsel would place reliance upon
the decision rendered by the Supreme
Court in the matter of Kaliaperumal v
Rajgopal and Another, (2009) 4 SCC 193
to submit that the recital in the sale deed
would be relevant to know the nature of the
transaction. He would further submit that
the learned trial Court has rightly held that
as per the document the possession of the
land is with the seller, therefore, the sale
deed though was executed cannot be given
effect.

31. In order to decide as to whether the
sale deed is concluded or the same is
incomplete, the intention of the parties have
to be gathered from the recital of the sale
deed.
Therefore,
this
Court
has
meticulously read the entire sale deed and
its recital from where this Court has
gathered that the intention of the parties
were mentioned in absolutely unambiguous
and unequivocal terms that in case, the
entire sale consideration is not paid and the
cheque is dishonored, the sale deed would
be declared as null and void.

32. This Court has further considered
one of the important aspects that the total
sale consideration was Rs.46 lacs, but out
8 All. Vinod Kumar Jalaun Vs. Kailash Jaiswal
499
of Rs.46 lacs, only Rs.1 lac was paid,
which was just about 2% of the total sale
consideration of the sale deed, therefore,
even otherwise the equity lies in favour of
plaintiff/respondent
because
the
plaintiff/respondent cannot be directed to
recover 98% balance sale consideration
even if the cheque, which was supposed to
be encashed, has been dishonored by
further directing him to deliver the
possession of the property.

33. This Court further considered that
neither any counter claim was filed nor any
possession
was
ever
asked
by
the
defendant/appellant, therefore, even if the
judgment of the trial court is turned down,
then also the defendant/appellant would not
get anything as any claim for seeking
possession in terms of the sale deed dated
16.06.2003 would be barred by limitation.

34. This Court further considered that
once the intentions of the parties were very
clear, there is no scope of interpreting the
said specific clause which says that in case,
the cheque is dishonored, the sale deed
would be declared as null and void.

35. In the case of Kaliaperumal
Versus Rajagopal and Another [Supra],
the question for consideration was whether
title to the disputed properties passed to the
Appellant therein, when the sale deed dated
26/06/1983 was registered on 26/10/1983,
though admittedly no amount was paid
towards consideration to the respondents.
In that case, neither the possession of
properties nor the title deeds were delivered
to the purchaser either on the date of sale or
thereafter and it was held that the parties
intended that title of ownership to the suit
properties would pass to the purchaser,
only after payment of full consideration by
the purchaser to the vendor as a condition
precedent and the parties did not intend that
there should be transfer of ownership
merely on execution and registration of the
deed. It is observed in Paragraph Nos.18
and 19 as follows:-

"18. Normally, ownership and
title to the property will pass to the
purchaser on registration of the sale deed
with effect from the date of execution of
the sale deed. But this is not an invariable
rule, as the true test of passing of property
is
the
intention
of
parties.
Though
registration is prima facie proof of an
intention to transfer the property, it is not
proof of operative transfer if payment of
consideration
(price)
is
a
condition
precedent for passing of the property.

19. The answer to the question
whether the parties intended that transfer of
the ownership should be merely by
execution and registration of the deed or
whether they intended the transfer of the
property to take place, only after receipt of
the entire consideration, would depend on
the intention of the parties. Such intention
is primarily to be gathered and determined
from the recitals of the sale deed. When the
recitals are insufficient or ambiguous the
surrounding circumstances and conduct of
parties can be looked into for ascertaining
the intention, subject to the limitations
placed by Section 92 of Evidence Act. "

36. In the present case, the very sale
deed on which the appellant predicates his
title contains a stipulation that nonrealisation of the cheque would result in the
automatic cancellation of the transaction.
This is not a mere collateral clause but one
that strikes at the root of the contract. The
appellant has, by his own admission, failed
to honour the cheque despite being given
time. His plea that possession was not
500 INDIAN LAW REPORTS ALLAHABAD SERIES
delivered is a red herring, as there is no
convincing evidence that possession was a
pre-condition to payment. The respondent,
on the contrary, has established that
possession was not transferred owing to the
appellant's failure to honour the financial
terms of the deed.

37. The argument that the sale deed,
once registered, could not be declared
ineffective in view of Section 55 of the
Transfer of Property Act is untenable as the
intention and conduct of parties are pivotal
in determining the legal effect of any
transaction. These provisions presume
unconditional sales, whereas the present
sale deed was expressly made conditional.

38. On going through the record of the
case and the evidence on record, this court
found that the intention of the parties was
expressly conditional: the sale was agreed
upon for ₹46,00,000, out of which only
₹1,00,000 was paid in cash at the time of
execution, and the remaining ₹45,00,000
was to be paid via a post-dated cheque.
Crucially, the sale deed itself included a
clear stipulation that if the cheque was not
honoured for any reason, the sale deed
would be deemed null and void, and the
seller (plaintiff) would continue to be the
rightful owner of the disputed land. This
clause was not an afterthought or a separate
agreement-it was incorporated directly
into the deed, reflecting the parties' mutual
understanding and intention.

39. Perusal of the record further would
go to show that the cheque was presented
multiple times but was dishonoured due to
insufficient funds. The buyer (defendant)
even modified the date on the cheque and
re-signed it, yet still failed to ensure
payment. The court observed that such
conduct, along with the defendant's failure
to deposit the balance sale consideration
even
after
repeated
opportunitiesincluding during litigation-demonstrated a
lack of bona fide intention to fulfill the
contractual obligation. Furthermore, the
court emphasized that the buyer's inaction
and
subsequent
attempts
to
assert
ownership without payment reflected a
design
to
take
advantage
of
legal
formalities
while
avoiding
financial
liability. Referring to legal principles and
precedents, the Trial Court reiterated that
"intention" in such matters is to be gathered
not only from the recital of the sale deed
but also from the conduct of the parties and
the evidence on record. Here, the express
clause in the sale deed and the defendant's
actions evidenced a clear conditional
intent-that ownership and effectiveness of
the sale deed were contingent upon actual
payment. Since that condition was not
fulfilled, the court declared the sale deed
ineffective and unenforceable.

40. The appellant's plea of readiness
and willingness is not borne out by
conduct. If he had intended to honour the
consideration, he could have deposited the
amount in the respondent's account or
moved the competent court for appropriate
directions. Instead, he allowed the cheque
to lapse, even after altering the date twice,
and made no substantial effort to discharge
his part of the contract.

41.
As
regards
the
prayer
for
cancellation of the deed, the trial court has
rightly held that the respondent is entitled
to declaratory relief and injunction, but not
to cancellation in absence of requisite court
fee. This is in line with the legal principle
laid down in Anil Kumar Harda v. Smt.
Suman Bala [AIR 1980 Delhi (DB)],
wherein it was held that declaratory relief
cannot be used as a device to evade court
8 All. Vinod Kumar Jalaun Vs. Kailash Jaiswal
501
fee in cases where the real prayer is one of
cancellation.

42. The finding of the trial court that
the sale deed is ineffective and the
respondent continues to be the owner in
possession of the suit property is supported
by the evidence and consistent with legal
principles governing conditional sales.
Thus, there being no perversity or material
illegality in the findings recorded by the
learned trial court, this Court sees no
reason to interfere.

43. Issue No. II relates to grant of a
permanent injunction. The Defendant/Appellant
explicitly admitted in their written statement
and oral testimony that physical possession of
the disputed property was never handed over to
them by the Plaintiff/Respondent.

44. Since the sale deed has been
declared ineffective due to the failure of
consideration as per its own terms, and the
Plaintiff/Respondent has always remained
in physical possession, the Trial Court was
perfectly justified in granting a permanent
prohibitory injunction. This prevents the
Defendant/Appellant from interfering with
the Plaintiff's peaceful possession of the
property. The right to injunction naturally
flows
from
the
Plaintiff's
continued
ownership and possession coupled with the
nullity of the purported transfer.

45. Admittedly, possession is still with
the plaintiff/respondent, therefore, trial
court
has
rightly
granted
permanent
injunction.

APPLICATION
UNDER
ORDER XLI RULE 27 CPC

46. Two applications for taking on
record additional evidence have been filed
on behalf of the defendant appellant. The
first application for bringing on record the
additional evidence was filed by the
defendant appellant on 22.07.2015 and the
second application under Order 41 Rule 27
CPC was filed on 16.07.2025 at the time
when the final argument started in the
matter. The additional evidence sought to
be adduced is unworthy inasmuch as the
additional evidence application was filed in
the year 2015 for an incident which is
alleged to have happened in the year 2010
and almost 5 years have passed before
filing the said application for which no
reason has been brought on record by the
defendant appellant to explain the uncalled
for delay.

47. It has been vehemently argued that
in the application under Order 41 Rule 27
of CPC, the appellant, during the pendency
of appeal, has paid certain amount and in
this regard, he sought to bring on record
one unsigned, undated alleged agreement
having allegedly executed between the
parties, to which the plaintiff/respondent
has vehemently opposed that no document
which is unregistered having no signature
and date, can be accepted as additional
evidence particularly when the same is
inadmissible in evidence as none of the
parameters mentioned under Order 41 Rule
27 of CPC is attracted.

48. The second application that was
filed at the time when hearing of the
present appeal started, to bring on record
the order sheets of plaint case filed by the
plaintiff against the defendant under
Section 138 of NI Act. All proceedings
under Section 138 of NI Act are irrelevant
for adjudication in the present appeal
inasmuch as the cause of action for
institution of the instant suit was to seek
declaration to the effect that the sale deed is
502 INDIAN LAW REPORTS ALLAHABAD SERIES
a nullity. Moreover, the accused namely the
defendant
appellant
passed
away
on
19.01.2022 and as such the proceedings
under Section 138 of NI Act stands abated.
Therefore,
to
bring
on
record
and
considering the proceedings under Section
138 of NI Act particularly in the absence of
pleading to that effect in the written
statement cannot be read as additional
evidence even if admitted when the
defendant
appellant
had
complete
knowledge of those proceedings for past 17
years. Thus, there being no application
seeking
amendment
in
the
written
statement, additional evidence cannot be
adduced.

49. Order 41 Rule 27 of the Code of
Civil Procedure (CPC) allows an appellate
court to take additional evidence at the
appellate stage, but only under specific
conditions. The general principle is that the
appellate court should not deviate from the
record of the lower court, but this rule
provides an exception. The appellate court
can take additional evidence in the
situations, if the trial court refused to admit
evidence that should have been admitted or
if the party appealing can demonstrate that
the
evidence
was
not
within
their
knowledge at the time of the trial or could
not be produced despite due diligence and
further, if the appellate court requires the
evidence to pronounce a judgment or for
any other substantial cause. The party
seeking to adduce additional evidence must
demonstrate that the conditions of Order 41
Rule 27 are met. The purpose of Order 41
Rule 27 is not to fill gaps in the evidence or
patch up a weak case.

50. In the case of Union of India Vs
Ibrahim Uddin and Another, (2012) 8
SCC has held under para 26 as under:

"The
Appellate
Court
should
not,
ordinarily allow new evidence to be adduced in order
to enable a party to raise a new point in appeal.
Similarly, where a party on whom the onus of
proving a certain point lies fails to discharge the
onus, he is not entitled to a fresh opportunity to
produce evidence, as the Court can, in such a case,
pronounce judgment against him and does not
require any additional evidence to enable it to
pronounce judgment."

51.
This
Court
finds
that
the
applications under Order 41 Rule 27 of
CPC filed by the defendant/appellant are
nothing but an abuse of process of law.
Now
the
Court
considers
second
application under Order 41 Rule 27 of
CPC, which is also liable to be rejected as
the same was filed after many rounds of
final hearing that too bringing on record the
order sheet of criminal case filed u/s 138 of
N.I.